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2013 (10) TMI 984 - HC - Income TaxMonetary limits for filing an appeal before High court by the department - Whether penalty can be imposed on the assessee under section 271B of the Income-tax Act, 1961, when it was mandatory to get the accounts audited under section 44AB of the said Act, even if the books of account have not been properly maintained – Held that:- There is no dispute that Instruction No. 5 of 2008, dated May 15, 2008, imposes a monetary limit of Rs. 4,00,000 for preferring an appeal under section 260A of the Act nor is it in dispute before us that the net tax effect in the case at hand, is less than Rs. 4,00,000 - Instructions issued by the Central Board of Direct Taxes, are binding on the Revenue except where (a) the constitutional validity of the provisions of an Act or Rule is under challenge ; (b) the Board's order, notification, instruction or circular has been held to be illegal or ultra vires ; and (c) a Revenue audit objection in the case has been accepted by the Department. The Memorandum Explaining the Provisions of the Finance Bill, 2008, while highlighting the underlying object of section 268A, clearly reflected the anxiety of Parliament to reduce the litigation in small cases and regulate the right of the Revenue to file or not to file an appeal under section 260A. Consequently, there is an inherent limitation on the Revenue's right to file appeal under section 260A inasmuch as the condition precedent for preferring an appeal is existence of a substantial question of law. Section 260A does not, however, contemplate any monetary limit. This monetary limit has been imposed a indicated above by the Central Board of Direct Taxes in exercise of its power under section 268A - Parliament has nevertheless deemed it necessary to vest in the Central Board of Direct Taxes, by enacting section 268A, the power to regulate appeal by prescribing the monetary limit – Decided against the revenue.
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