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TMI Blog2009 (12) TMI 444X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee filed his return declaring his income of Rs. 2,25,710. The Assessing Officer, vide its order dated March 25, 2003, framed the assessment under section 143(3) of the Act at an income of Rs. 7,60,580 while disallowing the claim of exemption of Rs. 4,04,664 under section 54F of the Act. 3. It was held by the Assessing Officer that the assessee was not eligible for the benefit of section 54F of the Act on the amount of repayment of housing loan taken for construction of residential house as the investment on the purchase of new residential house had not been made within the specified time of one year before the date when the long-term capital gains arose. The order of the Assessing Officer was upheld by the Commissioner of Income-tax (Appeals). However, the Income-tax Appellate Tribunal (hereinafter referred to as "the ITAT"), vide its order dated September 7, 2007, has set aside the aforesaid addition while coming to the conclusion that the investment was made by the assessee in the residential house during the period March 1, 1999, to March 26, 1999, i.e., within the period of one year prior to the date of the transfer of long-term capital assets, therefore, he was eligible ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r, therefore, the contention of the learned counsel for the Revenue that since in the case of the assessee the issue is of recurring nature, therefore, it should be separately dealt with on the merits, cannot be accepted. Learned counsel further argued that even if the appeal is filed prior to May 15, 2008, Circular No. 5 of 2008 would be applicable to cases pending before the court either for admission or for final disposal. In support of his contention, learned counsel placed reliance upon the decision of the Bombay High Court in CIT v. Madhukar K. Inamdar (HUF) [2009] 318 ITR 149. 8. After hearing the arguments of the learned counsel for the parties, we find force in the preliminary objection raised by the learned counsel for the assessee with regard to maintainability of the appeal filed by the Department. During the course of arguments, it is not disputed before us that the tax effect in the instant case is less than Rs. 4 lakhs. In the present case, the Assessing Officer disallowed the claim of the assessee of exemption of Rs.4,04,664 under section 54F of the Act on the ground that the investment made by the assessee on construction in a residential house was not made within ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , 2008, needs to be considered in the light of the said Circular. Application of the said Circular to the cases coming on board after May 15, 2008, by no stretch of imagination can be said to be an application of Circular with retrospective effect. 10. In order to consider the issue in its right perspective, it is necessary to refer to the Circular of the Central Board of Direct Taxes dated May 15, 2008, paragraph 5 of which reads as under : '5. The Assessing Officer shall calculate the tax effect separately for every assessment year in respect of the disputed issue in the case of every assessee. If, in the case of an assessee, the disputed issues arise in more than one assessment year, appeal shall be filed in respect of such assessment year or years in which the tax effect in respect of the disputed issue exceeds the monetary limit specified in paragraph 3. No appeal shall be filed in respect of an assessment year or years in which the tax effect is less than the monetary limit specified in paragraph 3. In other words, henceforth, appeals will be filed only with reference to the tax effect in the relevant assessment year. However, in case of a composite order of any High Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iance thereof, they do not file appeals, if the tax effect is less than Rs. 4 lakhs ; but the said circular is not applicable to the cases filed prior to May 15, 2008, i.e., to the old pending appeals ; even if the tax effect is less than Rs. 4 lakhs. In our view, there is no logic behind this belief entertained by the Revenue. 15. This court can very well take judicial notice of the fact that by passage of time money value has gone down, the cost of litigation expenses has gone up, filing of cases at the instance of the Revenue has increased ; consequently, the burden on the Department has also increased to a tremendous extent. The corridors of the superior courts are choked with huge pendency of cases. The litigation expenses have also increased manifold. In this view of the matter, the Board has rightly taken decision not to file appeals if the tax effect is less than Rs. 4 lakhs so as to reduce burden of the Department as well as that of the tribunals and courts. The same policy for old matters needs to be adopted by the Department so as to achieve the object of the policy laid down by the Central Board of Direct Taxes. 16. It would be in the public interest if the Revenue co ..... X X X X Extracts X X X X X X X X Extracts X X X X
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