TMI Blog2013 (2) TMI 451X X X X Extracts X X X X X X X X Extracts X X X X ..... nding cases also – Therefore circulars or instructions issued under section 268A of the Income-tax Act by the CBDT are applicable not only to new cases but to pending cases as well. Such circulars have been issued under section 268A of the Income-tax Act, which is an exception to the provisions of section 260 of the Act. The CBDT being mindful of this position has issued the aforesaid instructions - The main objective of such instructions is to reduce the pending litigations where the tax effect is considerably small – Therefore tax appeals are required to be dismissed. - TAX APPEAL NO. 76 OF 2007, TAX APPEAL NO. 78 OF 2007 - - - Dated:- 29-7-2011 - NISHITA MHATRE SMT., JOSHI M. T. JJ Shri Alok Sharma, Advocate for appellant. Shri R.R. Chandak with Shri M.K. Kulkarni, Advocate for the respondent JUDGMENT Smt. Nishita Mhatre J.- Both these tax appeals are being heard together, as a common question arises in these appeals. The Revenue has filed these appeals against the orders passed by the Income-tax Appellate Tribunal. The appeals have been filed for various assessment years against the same assessee. A contention is raised on behalf of the assessee i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 256(2) before the High Court should be filed only when the tax effect was less than ₹ 2 lakhs. In clause 3 of that Instruction, the Revenue was directed to contest or appeal against the orders irrespective of the tax effect where (i) the Revenue audit objection in the case has been accepted by the Department ; (ii) the Board's order, notiication, instruction or circular is the subject-matter of an adverse order ; (iii) prosecution proceedings are contemplated against the assessee ; and (iv) the constitutional validity of the provisions of the Act are under chal-lenge. Clause 7 mentions that this instruction would come into effect from April 1, 2000. This instruction was interpreted by the Division Bench of this court in the case of CIT v. Pithwa Engg. Works reported in [2005] 276 ITR 519 (Bom) ; [2005] 197 CTR (Bom) 655. The contention of the learned counsel for the Revenue in that case was that the instructions would be applicable only with respect to new cases and not pending ones, which is the same argument advanced by the learned counsel for the Revenue in the present appeals. The court noted that the corridors of the superior courts were choked with a huge ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to burden courts and tribunals in respect of matters where the tax effect is less than the limit prescribed. Even before this Instruction, the Central Board of Direct Taxes has been issuing instructions, the last one being on October 24, 2005, where the monetary limit has been fixed. In those instructions the only exception had been that in cases involving substantial question of law of importance as well as in cases where the same question of law will repeatedly arise, either in the case concerned or in similar case, appeal should be filed without being hin-dered by the monetary limits. The present instructions seem even to limit the issues in so far as the same question of law or recurring issue except to the extent provided in para. 5. On a proper reading of para. 5 of the instructions it would be clear that a duty is cast on the Assessing Officer that even if the disputed questions arise for more than one assessment year then an appeal should be filed only in respect of those years where the monetary limit as specified in para. 3 of the instructions. The exception, how-ever, is carved out in respect of a composite order of the High Court or the appellate authority. In other ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... time when such appeals were filed. The instruction was issued under section 268A(1) of the Act. The argument of the learned counsel for the Revenue in that case was, that the instruction issued on May 15, 2008, did not preclude the Department from continuing with the appeals and/or petitions filed prior to May 15, 2008, if they involved a substantial question of law of a recurring nature, notwithstanding the fact that the total cumulative tax effect involved in the appeals was less than ₹ 4 lakhs. It was submitted, such appeals which were filed prior to the issuance of the Instruction and where substantial questions of law were raised, were required to be decided on the merits. The court, while considering the issue observed that paragraph 5 of the Circular made it clear that no appeals would be filed in the cases involving the tax effect less than ₹ 4 lakhs notwithstanding the issue being of recurring nature. Relying on the judgment in CIT v. Polycott Corporation [2009] 318 ITR 144 (Bom), the court observed as follows: The aforesaid judicial verdict makes it clear that the circular dated May 15, 2008, in general and para. (5) thereof in particular lay down that ev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n a similar clause has been interpreted by the Divi-sion Bench of this court in CIT v. Madhukar K. Inamdar (HUF) [2009] 318 ITR 149 (Bom), the same principles must apply in the present cases also, as we have found that Instruction of May 15, 2008, is in pari materia with the instruction of February 9, 2011. In the case of CIT v. Ashok Kumar Manibhai Patel and Co. reported in [2008] 214 CTR (MP) 344 ; [2009] 317 ITR 386 (MP), the Madhya Pradesh High Court considered the Central Board of Direct Taxes Instruction No. 2 of 2000 and relying on the judgment in the case of CIT v. Pithwa Engg. Works held that the circular would apply to pending cases also. In the case of CIT v. Kironmoy Roy Choudhury reported in [2011] 330 ITR 316 (Gauhati) ; [2011] 53 DTR (Gauhati) 143, the Gauhati High Court has also interpreted the Central Board of Direct Taxes Instruction No. 5 of 2008, dated May 15, 2008, and has observed as thus (page 319) : We have extended our anxious consideration to the rival submis-sions made by the parties. Instruction No. 5 of 2008, dated May 15, 2008, is not in dispute. Thereby the monetary limit of ₹ 4,00,000 has been prescribed vis-a-vis appeals under secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lars have been issued under section 268A of the Income-tax Act, which is an exception to the provisions of section 260 of the Act. The Central Board of Direct Taxes being mindful of this position has issued the aforesaid instructions. In our opinion, there-fore, the instructions would be applicable to pending cases as well. We have already found that Instruction No. 5 of 2008 and Instruction No. 3 of 2011 are in pari materia. Instruction No. 5 of 2008 has already been interpreted by this court in CIT v. Madhukar K. Inamdar (HUF) [2009] 318 ITR 149 (Bom). It is not disputed that this judgment has not been challenged by the Revenue and, therefore, still holds the field. The learned counsel, Mr. Sharma for the Revenue has tried to distinguish these cases by relying on the judgment in the case of CIT v. Chhajer Packaging and Plastics Pvt. Ltd. [2008] 300 ITR 180 (Bom). In that case, a substantial question of law of importance was raised and since the circular itself provided that such tax appeals were maintainable, despite the monetary limit on the tax effect imposed by that circular it was held that the appeal was required to be decided on the merits. It is true that this judgme ..... X X X X Extracts X X X X X X X X Extracts X X X X
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