2017 (11) TMI 919 - RAJASTHAN HIGH COURT

Monetary limit for filing an appeal - power of CBDT u/s 119 - retrospective effect - Department acted contrary to the Circular issued by CBDT in pursuance of Section 268A - scope of amendment - Held that:- From the policy which has been referred by different High Courts and the intention of the legislation to reduce the pendency of the tax appeal and to have a uniform policy for the department through-out the Country, therefore, the direction issued by the CBDT is binding on all subordinate officers and Section 268A(4) which has been amended with retrospective effect is applicable with all force in pending matters.The intention of the legislation is very clear to prohibit the appeal analogous to the provisions of Code of Civil Procedure where there is a prohibition that appeal upto the value will not be entertained by the Court.

The Circular issued by the CBDT under Section 268A of the Act of 1961 is binding on the Department thus the appeal cannot be preferred contrary to the instructions given therein. This Court, however, cannot lose sight of the only issue raised by the Department in reference to Article 141 of the Constitution of India. If an issue has been decided by the Apex Court then the ratio propounded therein is to be applied as a precedence. If the Tribunal or the CIT (Appeals) takes a view contrary to the settled law then rider imposed by the CBDT on filing of appeal cannot be applied. If we hold that appeal would not be maintainable even if the Tribunal or the CIT (Appeals) has taken view contrary to the judgment of the Supreme Court then Article 141 of the Constitution of India would be violated. No statutory provision can stand or be read contrary to the constitutional provision.

In view of the above, theory of reading down needs to be applied for making Circular of the CBDT in consonance to the provisions of the Constitution of India otherwise it would not only cause judicial indiscipline but give rise to the anarchy, leading to serious consequences.

Accordingly, the Circular issued by the CBDT under Section 268A of the Act of 1961 is held binding on the Department thus appeal cannot be filed, if it is barred. It is, however, with a clarification that if the issue decided by the CIT (Appeals) or Tribunal is contrary to the judgments of the Supreme Court, the Department can prefer an appeal, however, care would be taken to file it only in those cases where the order passed by the CIT (Appeals) or the Tribunal is contrary to the ratio propounded by the Supreme Court on the same issue. In doing so, sanctity of Article 141 of the Constitution of India would be maintained, thereby, serious consequences of taking different view would also be avoided. The Department may incorporate it in the Circular to avoid further controversy. - Decided in favour of assessee.