TMI Blog2007 (8) TMI 483X X X X Extracts X X X X X X X X Extracts X X X X ..... l. The learned CIT (Appeals) thus allowed a relief of Rs. 2,00,000 out of the total addition of Rs. 2,51,945. 3. That the order of learned CIT (Appeals) be set aside and that of Assessing Officer be restored." I have considered the contentions of ld. DR and record perused. Brief facts of the case are that Assessing Officer applied the provisions of section 44AD and estimated the income. By the impugned order the CIT(A) found that section 44AD is not applicable even as per the order passed by the Assessing Officer in the assessment year 2001-02. After considering the detailed submissions of AR, the addition was retained to the extent of Rs. 50,000. I have gone through the grounds of appeal filed by the revenue and found that tax effect in the instant appeal is less than Rs. 2 lakhs. In view of CBDT, Instruction No. 2, dated 24-10-2005, the department should not have filed the appeal before the Tribunal. For this purpose reliance may be placed on the decision ITAT Delhi Bench in case of Vikram Bhatnagar ITA No. 60/D/2002, order dated 10-3-2006. 2. Hon ble Bombay High Court in the case of CIT v. Pithwa Engg. Works [2005] 276 ITR 519, have observed as under : "One fails ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cable in the instant case as well. The CBDT has taken a policy decision not to file appeals in such type of cases and the circular is binding on the revenue even to appeals filed before 31-10-2005 and the department would not be justified in proceeding with those appeals within the monetary limit of tax effect prescribed in the circular dated 24-10-2005." 4. As per my considered view the instructions for not filing the appeals with regard to the quantum of revenue effect being less than particular amount have not been issued by the Central Board of Direct Taxes in a light hearted manner. These are issued after a great deal of deliberations and discussion where every aspect of the matter, more particularly the question of loss of revenue is examined in depth. Every officer is enjoined with the duty to advance the policies laid down by the Central Board of Direct Taxes and see that these are not defeated. The instructions are also aimed at reducing arrears of appeals in Courts and Tribunals. The Central Board of Direct Taxes, in the circular dated 27-3-2000, had asked all officers of the Income-tax Department under their control not to file appeals before the Appellate Tribunal i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l earlier instructions stipulating such limit of tax effect. 5. With regard to the binding nature of these instructions issued by the CBDT, on the income-tax authorities, the provisions of section 119 of Income-tax Act are very much clear. On a plain reading of section 119, it is clear that sub-section (1) refers to orders, instructions and directions to the income-tax authorities by the Board. The section itself provides that all such authorities and all other persons employed in the execution of this Act shall observe and follow such orders, instructions and directions of the Board. Only exceptions provided under the proviso are that such instructions cannot interfere with the discretion of the CIT(A) in exercise of appellate functions and also cannot direct any income-tax authority to make a particular assessment or to dispose of a particular case in a particular manner. Otherwise, section 119(1) itself mandates that such instructions shall be binding on the income-tax authorities. Section 119(2) refers to specific orders with reference to any class of income or class of cases either by way of relaxation of any of the provisions of section mentioned therein or with reference ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ded error, it could have been withdrawn and fresh circular/instruction would have been issued, which is within the powers of CBDT under section 119 of the Act. However, in our considered opinion, the CBDT is not justified in interpreting an earlier Circular, issued under section 119 of the Act. As stated earlier, Instruction No. 1979 leaves no room for doubt as to what should be the monetary limit to be taken into consideration while filing an appeal by the revenue. From para 2 of the aforementioned instruction, it could be seen that following three points were stated explicitly i.e. , ( a )The new monetary limit would apply with reference to each case taken singly. ( b )In group cases, each case should individually satisfy that new monetary limits. ( c )The working out of the monetary limits will, therefore, not take into consideration the cumulative revenue effect." Such being the policy decision taken by the revenue, with a view to reduce the litigation and also the cost involved therein, it is duty of the revenue authorities to scrupulously follow the policy decision taken by the CBDT and in cases where tax effect in each case is less than Rs. 1 lakh, the department ..... X X X X Extracts X X X X X X X X Extracts X X X X
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