TMI Blog2014 (12) TMI 425X X X X Extracts X X X X X X X X Extracts X X X X ..... ructions fixing the monetary limit for the tax effect would hold good even for pending cases – revenue could not point out any of the exceptions - this being a low tax effect case, the appeal cannot be admitted – Decided against revenue. - ITA No. 190/PNJ/2014 - - - Dated:- 17-11-2014 - Shri P. K. Bansal And Shri D. T. Garasia,JJ. For the Petitioner : None For the Respondent : B. Barthakur, DR ORDER Per P. K. Bansal 1. This appeal has been filed by the Revenue against the order of CIT(A) dt. 1.4.2014 by taking the following grounds of appeal in which the tax involved is less than ₹ 4 lacs. (1) The order passed by the CIT(A) is against the order/Instruction of the Board in F.No. 200/34/2009-IT.I dated 6.10.2009 and as such, covered by the exceptions at Para-8(b) of Instruction No. 3/2011 dated 09.02.2011 in regard to monetary limit for filing of appeal and therefore, it is prayed that the appeal on the issue be admitted in law. (2) The CIT(A) erred in ignoring e-circular on EXIT OPTION Scheme issued by the State Bank of India, Corporate Centre, Mumbai, wherein, as per Para-10, it is clearly mentioned that no exemption of ex-gratia from income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... our view, the Board s circular dated March 27, 2000 is very much applicable even to the old references which are still undecided. The Department is not justified in proceeding with the old references wherein the tax impact is minimal. Thus, there is no justification to proceeds with decades old references having negligible tax effect. Similarly, Hon'ble Gujarat High Court in the case of CIT v. Sureshchandra Durgaprasad Khatod (HUF) (2012) 253 CTR 492 (Guj) has specifically considered instruction No. 3/2011 and held that the same would apply to pending cases as well even though there was a specific condition in that instruction also that the same would apply to appeals filed on or after February, 2011. Hon'ble High Court has considered this issue as under:- 6. The question about applicability of Instruction No.3 of 2011 had been considered and decided by the Aurangabad Bench of the Bombay High Court in Tax Appeal No. 78 of 2007, The Commissioner of Income Tax v. Smt. Vijaya V. Kavekar decided on 29.7.2011. The Division Bench, after considering earlier Instructions and various decisions of the Courts on Instructions, relying on the decision in Commissioner of Income T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the circular dt. 15th may, 2008 in general and para (5) thereof in particular lay down that even if the same issue, in respect of same assessee, for other assessment years is involved, even then the Department should not file appeal, if the tax effect is less than ₹ 4 Lakhs. In other words, even if the question of law is of recurring nature even then, the revenue is not expected to file appeals in such cases, if the tax impact is less than the monetary limit fixed by the CBDT. 7. One fails to understand how the Revenue, on the face of the above clear instructions of the CBDT, can contend that the circular dt. 15th May, 2008 issued by the CBDT is applicable to the cases filed after 15th May, 2008 and in compliance thereof, they do not file appeals, if the tax effect is less than ₹ 4 Lakhs; but the said circular is not applicable to the cases filed prior to 15th May, 2008 i.e. to the old pending appeals, even if the tax effect is less than ₹ 4 Lakhs. In our view, there is no logic behind this belief entertained by the Revenue. The Court has further held that the prevailing instructions fixing the monetary limit for the tax effect would hold good even for pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ax effect is considerably small. Therefore, in our opinion, the tax appeals are required to be dismissed, as they are not maintainable in view of the provisions of Section 268A of the Income Tax, and the CBDT Instruction No. 3 of 2011. 7. The same view has been taken by the Karnataka High Court in ITA No.3191 of 2005 in The Commissioner of Income- Tax vs. M/s. Ranka Ranka decided on 2.11.2011, wherein the Division Bench has considered Instruction No.3 and the National Litigation, Policy, had held as under: (i) Instruction No.3/11 is also applicable to the pending appeals. (ii) As the tax effect in the instant case is less than ₹ 10 lakhs, the appeal stands dismissed on the ground of monetary limit, without expressing any opinion on the merits of the claim, making it clear that the Department is at liberty to proceed against the assessee in future, if there any amount due from the assessee, on similar issue and if it is above the monetary limit prescribed. 4. We find from the above case law of Hon'ble Gujarat High Court in the case of Sureshchandra Durgaprasad Khatod (HUF) (supra) that in the similar situation and exactly identical instructions were applie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erest is the issue under dispute, the amount of interest shall be the tax effect. In cases where returned loss is reduced or assessed as income, the tax effect would include notional tax on disputed additions. In case of penalty orders, the tax effect will mean quantum of penalty deleted or reduced in the order to be appealed against. 5. The Assessing Officer shall calculate the tax effect separately for every assessment year in respect of the disputed issues in the case of every assessee. If, in the case of an assessee, the disputed issues arise in more than one assessment year, appeal, can be filed in respect of such assessment year or years in which the tax effect in respect of the disputed issues exceeds the monetary limit specified in para 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 para 3. In other words, henceforth, appeals can 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 or appellate authority, which involves more than one assessment year and common issues in more than one assessment year ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ollowing issues should be contested on merits notwithstanding that the tax effect entailed is less than the monetary limits specified in para 3 above or there is no tax effect. (a) Where the Constitutional validity of the provisions of an Act or Rule are under challenge, or (b) Where Board s order, Notification, Instruction or Circular has been held to be illegal or ultra vires, or (c) Where Revenue Audit objection in the case has been accepted by the Department. 9. The proposal for filing Special Leave Petition under Article 136 of the Constitution before the Supreme Court should, in all cases, be sent to the Directorate of Income-tax (Legal Research), New Delhi and the decision to file Special Leave Petition shall be in consultation with the Ministry of Law and Justice. 10. The monetary limits specified in para 3 above shall not apply to writ matters and direct tax matters other than Income tax. Filing of appeals in other Direct tax matters shall continue to be governed by the relevant provisions of statute rules. Further filing of appeal in cases of Income Tax, where the tax effect is not quantifiable or not involved, such as the case of registration of trusts ..... X X X X Extracts X X X X X X X X Extracts X X X X
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