TMI Blog2015 (5) TMI 672X X X X Extracts X X X X X X X X Extracts X X X X ..... under challenge. The Ld. DR could not point out any of the exceptions as provided above. Accordingly, this being a low tax effect case, the appeal of the revenue dismissed in limine without going into merits. - Decided against revenue - I.T.A. No. 1154/KOL/ 2011 - - - Dated:- 6-1-2015 - Shri Shamim Yahya and Shri George Mathan, JJ. For the Appellant : Shri K.L. Kanak, JCIT ORDER George Mathan (Judicial Member).- This is an appeal filed by the Revenue against the order of the learned Commissioner of Income-tax (Appeals)-XX, Kolkata in Appeal No. 120/CIT(A)-XX/Wd-36(3)/09-10/Kol dated June 1, 2011 for the assessment year 2007-08. 2. Shri K. L. Kanak, Joint Commissioner of Income-tax, represented on behalf of the Revenue and none represented on behalf of the assessee. 3. At the outset, it was found that tax effect in this appeal of the Revenue is below the prescribed monetary limits for filing of the appeal before the Income-tax Appellate Tribunal. The appeal relates to the assessment year 2007-08 and filed before the Tribunal on September 8, 2011 and in view of the recent Instruction No. 5 of 2014 issued by the Central Board of Direct Taxes on July 10 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere was a specific condition in that instruction also that the same would apply to appeals file on or after February, 2011. The hon'ble High Court has considered this issue as under (page 461) : 6. The question about the applicability of Instruction No. 3 of 2011 had been considered and decided by the Aurangabad Bench of the Bombay High Court in CIT v. Smt. Vijaya V. Kavekar (Tax Appeal No. 78 of 2007, decided on July 29, 2011) [2013] 350 ITR 237 (Bom- Aura). The Division Bench, after considering earlier instructions and various decisions of the courts on instructions, relying on the decision in CIT v. Madhukar K. Inamdar (HUF) [2009] 318 ITR 149 (Bom), has held in paragraphs 9, 10, 11, 14 and 17 as under (page 241 of 350 ITR) : '9. As stated earlier, the Income-tax Act was amended and section 268A has been introduced on the statute book with retrospective effect. Section 268A carves out an exception for filing of appeals and references under section 260A of the Act. The Legislature has prescribed that the Central Board of Direct Taxes is empowered to issue circulars and instructions from time to time, with regard to filing of appeals depe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Central Board of Direct Taxes. 7. One fails to understand how the Revenue, on the face of the above clear instructions of the Central Board of Direct Taxes, can con tend that the circular dated May 15, 2008 issued by the Central Board of Direct Taxes is applicable to the cases filed after May 15, 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 May 15, 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 pending cases. Accordingly, the court dismissed all the appeals having a tax effect of less than ₹ 4 lakhs.' 10. The new Central Board of Direct Taxes instructions have been issued on February 9, 2011, being Instruction No. 3 of 2011. The monetary limit has been raised again and clause 3 of the instructions provides that appeals shall not be filed in cases where th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the provisions of section 268A of the Income-tax Act and the CBDT Instruction No. 3 of 2011. 7. The same view has been taken by the Karnataka High Court in I. T. A. No. 3191 of 2005 in CIT v. Ranka and Ranka [2013] 352 ITR 121 (Karn) decided on November 2, 2011, wherein the Division Bench has considered Instruction No. 3 and the National Litigation Policy, had held as under (page 143) : '(i) Instruction No. 3 of 2011 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.' 5. We find from the above case law of the hon'ble Gujarat High Court in the case of CIT v. Sureshchandra Durgaprasad Khatod (HUF) [2014] 363 ITR 556 (Guj) that in the similar situation and exactly identical instructions were applied to the appeal filed retrospectively. The hon'ble Gujarat High Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bility of interest itself is in dispute. In case the chargeability of interest 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 i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urts, the judicial folders in the office of Commissioners of Income- tax must be maintained in a systemic manner for easy retrieval. 8. Adverse judgments relating to the following 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 and 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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