TMI Blog2007 (8) TMI 498X X X X Extracts X X X X X X X X Extracts X X X X ..... 24-10-2005, the department should not have filed the appeal before the Tribunal. For this purpose reliance may be placed on the decision of ITAT Delhi Bench in case of Shri Vikram Bhatnagar [IT Appeal No. 60/D/2002, order dated 10-3-2006]. Hon ble Bombay High Court in the case of CIT v. Pithwa Engg. Works [2005] 276 ITR 519 , have observed as under : "One fails to understand how the revenue can contend that so far as new cases are concerned, the circular issued by the Board is binding on them and in compliance with the said instructions, they do not file references if the tax effect is less than Rs. 2 lakhs. But the same approach is not adopted with respect to the old referred cases even if the tax effect is less than Rs. 2 lakhs. In our view, there is no logic behind this approach. 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, the assessees on the file of the Departments have increased; consequently, the burden on the department also increased to a tremendous extent. The corridors of the superior courts are choked with huge pendency of cases. In this view of the m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cies 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 in cases where the tax effect involved in appeal did not exceed Rs. 1 lakh. These instructions in question are binding on all departmental authorities and they could not be by passed and treated as of no consequence on the pretext that these were private only, and the authorities are bound to follow, comply with and see that the policies laid down by the Board achieve their objectives. These instructions had been issued to avoid unnecessary litigation in small cases particularly, it was very difficult for a small assessee to come from a remote and distant place to defend an appeal filed against him in the Tribunal. The legal fees payable to the lawyer, travelling and other incidental expenses involved, were likely to be more than the tax effect in the appeal and the financial loss to such an assessee would be more, even i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 to class of income or class of cases. These instructions could be in the form of guidelines, principles or procedure to be followed by the Income-tax authorities in the work relating to assessment, collection of revenue or the initiation of proceedings for the imposition of penalties. Here also the Board may, if it is of the opinion that it is necessary in the public interest to do so, publish and circulate such instructions. Therefore, it is not in all cases that instructions/circulars issued by the Board under section 119(2) are published by the Board. Thus, the only difference between sub-section (1) and sub-section (2) of section 119 is that while sub-section (2) is more specific with reference to particular class of income or class of cases. The contention of the revenue could not be accepted that instructions issued un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 departmental authorities should not prefer appeals before the Appellate Tribunal. The ITAT Hyderabad Benches had consistently taken this view, which is in consonance with the view taken by the Hon ble Bombay High Court in the case of CIT v. Camco Colour Co. [2002] 254 ITR 565 and the judgment of the Hon ble Madras High Court in the case of S. Annamalai ( supra ). No doubt the Circulars issued by the CBDT are not binding on the Courts and Tribunals but it is the duty of the Court to see to it that the instructions, which are binding upon the revenue authorities, being issued in exercise of their powers under section 119 of the Act, are followed by them. In this connection, it would be relevant to extract the observations of Hon ble Supreme Court in the case of Union of India v. Azadi Bachao Andolan [2003] 263 ITR 706. "If, in t ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
