TMI Blog2002 (9) TMI 287X X X X Extracts X X X X X X X X Extracts X X X X ..... s. 1,00,000 and, therefore, the case is not covered by the CBDT Instruction No. 1979 dt. 27th March, 2000. The contention of the learned counsel for the assessee, on the other hand, was that the tax effect alone has to be considered for deciding the applicability of the Board instruction and the quantum of interest which may or may not be payable by the assessee in case the Revenue succeeds in its appeal is not to be taken into consideration. Keeping in view this contradictory stand taken by the learned representatives of both the sides, it was thought fit by the Bench to hear the arguments of both the sides on this preliminary issue in order to render the verdict on the same. 3. The learned Departmental Representative at the outset referred to the decision of Chandigarh Bench of Tribunal in the case of ITO vs. Dharmvir (2002) 253 ITR 1 (Chd)(AT) to explain the object behind the instructions issued by the CBDT from time to time in the present context (hereinafter referred to as the "said instruction"). He submitted that the said instructions have been issued by the CBDT to avoid unnecessary litigation in small cases so as to help the small assessees who might find it difficult to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sued by the CBDT on 20th May, 1970, 5th April, 1980, 7th Dec., 1984, 6th April, 1985, 4th Nov., 1987, 28th Oct., 1992 and 27th March, 2000, placed in his paper book and pointed out that the expression "tax effect" has been specifically used in the said circulars issued by the Board. Relying on the decision of Chandigarh Bench of Tribunal in the case of ITO vs. Dharmvir, he submitted that the instructions are issued by the CBDT after a great deal of deliberation and discussion where every aspect of the matter more particularly the question of loss of revenue is examined in depth and these instructions under consideration in the present case cannot be an exception. He also contended that such instructions are not issued by the CBDT in a light-hearted manner and it was well aware of the definition of the word "tax" when it was used in the impugned instructions. In this regard, he invited our attention to the Board Circular F. No. l6/87/67-IT(B) dt. 10th July, 1967, in which a reference was made to the definition of the word "tax" expressly given in s. 2(43) of the IT Act, 1961, with an observation recorded by the Board that the said definition is exhaustive and does not include within ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st being automatic and mandatory, no specific ground is required to be raised in the appeal and this issue being a consequential one, the interest is generally levied automatically consequent to the decision on main issue. He also submitted that even the assessees never raise a ground claiming interest payable to them on the amount of refund granted as a result of appellate order but still such interest is paid to the assessees as a consequence of the appellate decision on the main issue. 7. We have considered the rival submissions and also perused the relevant material on record. It is observed that a policy decision adopting a selective approach in filing or recommending appeals and references to the Tribunal, High Courts and Supreme Court was taken by the Board way back in 1968 and guidelines were laid down for this purpose vide it s Circular No. 91/47/68-ITJ(38) issued on 14th Oct., 1968. Subsequently Instruction No. 173 was issued by the Board on 20th May, 1970, in which a monetary limit for filing a reference application against a Tribunal s order was specified for the first time. The relevant para No. 3 of the said Instruction is reproduced below: "While considering the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... filed reference applications on the same issue in all cases from the charge; the board s approval is not required to be taken afresh for every case. If the CIT does not propose to file a reference in such a case for reasons other than of low tax effect, he is effected to send a report in the matter for obtaining the board s approval." 3.1. The present monetary limits of Rs. 10,000 for reference to the High Court and of Rs. 30,000 for appeal to the Supreme Court laid down in Instruction No. 284, dt. 10th Jan., 1975, will continue. The limit of Rs. l0,000 for reference to the High Court, however, shall be relaxed where the question of law is repetitive and the cumulative tax effect in a number of cases is bound to be substantial. In such cases whereas the first reference to the High Court may be filed howsoever low the tax effect may be subsequent references should be filed only if the tax effect in each reference is more than Rs. 5,000. 4. The Board has further decided that no Departmental appeal on questions of fact need be filed against the order of the AACs/CITs if the tax effect/reduction in penalty is Rs. 5,000 or less in respect of an IT appeal and Rs. 2,000 or less in re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ect of consequential addition/deletions in other years should be kept in view. In cases of firms/AOP the revenue effect in cases of partners/members be also taken into account." 11. In the aforesaid instruction, the expression "revenue effect" was used by the CBDT for the first time while revising the monetary limits. As already discussed, the specific expression "tax effect" was invariably used by the CBDT in the earlier instructions, but the reference made in the Instruction No. 1777, dt. 4th Nov., 1987, to the expression "revenue effect" gave rise to the controversy as raised by the learned Departmental Representative in the present case. It is worthwhile to note here that in the said instruction issued on 4th Nov., 1987, a reference was made by the Board to the earlier instructions No. 1573, dt. 7th Dec., 1984 and No. 1612, dt. 6th April, 1985, and it was categorically stated therein that the guidelines issued in the said instructions should be strictly adhered to subject only to the exceptions given in the instruction issued on 4th Nov., 1987. It, therefore, appears that the expression "revenue effect" in the said Instruction was used by the Board synonymously with the expre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the earlier instructions in the present context were issued wherein the expression "tax effect" was specifically used. In these circumstances, the contention of the learned Departmental Representative merely relying on the expression used in the Circular dt. 4th Nov., 1987, that the revenue effect of the appeal inclusive of tax and interest has to be considered, appears to be far fetched and we find it difficult to accept the same. 14. In any case, the Instruction which is applicable to the present appeal is the one bearing No. 1979 issued on 27th March, 2000, para No. 2 of which being relevant in the present contexts, is reproduced below: "In supercession of the above instruction, it has now been decided by the Board that appeals will be filed only in cases where the tax effect exceeds the revised monetary limits given hereunder" (Tax effect) (i) Appeal before the Tribunal (in income-tax matters) Rs. 1,00,000 (ii) Appeal under s. 260A/Reference under s. 256(2) Before the High Court Rs. 2,00,000 (iii) Appeal in the Supreme Court Rs. 5,00,000 The new monetary limits would apply with reference to each case taken ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... consideration the exhaustive definition of the word "tax" given in s. 2(43), the Board has made it clear that the same does not include within its connotation concepts of penalty and interest leviable under the other provisions of the Act. Keeping in view this undisputed position and considering the specific expression "tax effect" used in the latest Board Instruction No. 1979, issued on 27th March, 2000, we are of the considered opinion that what is to be taken into consideration for working out the monetary limit of the appeals filed by the Revenue after 1st April, 2000, is the tax effect alone and the interest which may or may not be payable by the assessee in case the Revenue succeeds in its appeal is not to be taken into consideration for the purpose of working out the monetary limit. 17. In the present case, the tax effect of the Departmental appeal is admittedly less than Rs. 1,00,000 and thus it is clearly filed by the Revenue in contravention of the aforesaid Instruction No. 1979, dt. 27th March, 2000, issued by the CBDT which is binding on the Department. In the case of CIT vs. Camco Colour Co. (2002) 173 CTR (Bom) 255 : (2002) 254 ITR 565 (Bom), the Hon ble Bombay High ..... 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