TMI Blog2015 (6) TMI 167X X X X Extracts X X X X X X X X Extracts X X X X ..... en accepted by the Department and the same is 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. 105/KOL/ 2012, I.T.A. No. 109/KOL/ 2012 - - - Dated:- 14-5-2015 - Shri P.K. Bansal and Shri Mahavir Singh, JJ. For The Department : Shri P.B. Pramanik, JCIT, Sr. D.R., ORDER Per P.K. Bansal: ITA No. 109/Kol./2012 This appeal has been filed by the assessee against the order of ld. Commissioner of Income Tax (Appeals)-XII, Kolkata dated 24.10.2011 for the assessment year 2004-05 by taking the following grounds of appeal:- (1) For that, the additions and disallowances are perverse, rather against evidence and material on record and without an iota of material or evidence to support and sustain the same. (2) For that the addition of ₹ 9,25,000/- gifted by the father-in-law of the appellant by the AO and confirmed by the ld. CIT(A) was devoid of any logic and it was liable to be deleted in full because i t is based on surmises, suspicion and conjectures ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion is prospective and not retrospective. 8. We have heard the ld. D.R. and gone through the facts and circumstances of the case. At the outset, it is seen that Hon ble Delhi High Court in the case of CIT Vs M/s. P. S. Jain Co. in ITA No.179/1991 dated 02.08.2010 has held as under: 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 been increased consequently, the burden on the Department has also increased to a tremendous extent. The corridors of the superior courts are chocked with huge pendency of cases. In this view of the matter, the Board has rightly taken a decision not to file references if the tax effect less than ₹ 2 lakhs. The same policy for old matters needs to be adopted by the Department. In 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 ne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 15th May, 2008 did not preclude the department from continuing with the appeals and/or Petitions filed prior to 15th May, 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 Lacs. It was submitted, such appeals which were filed prior to the issuance of Instruction and where substantial questions of law were raised, were required to be decided on 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 tax effect less than ₹ 4 Lacs notwithstanding the issue being of recurring nature. Relying on the judgement in CIT V/s Polycott Corporation, the Court observed as follows: 6 The aforesaid judicial verdict makes it clear that 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Income Tax V/s Delhi Race Club Ltd. , decided on March 03, 2011, by relying on its earlier Judgement Commissioner Income Tax Delhi-III V/s M/s P.S. Jain and Co. decided on 2nd August, 2010 has held that the CBDT circular raising the monetary limit of the tax effect to ₹ 10 Lacs would be applicable to pending cases also. 17. It is true that this judgement in Chhajer s case (supra) was not brought to the notice of the Division Bench, while deciding either Madhukar s case (supra) or the case of Polycot Corporation (supra). However, the instruction of 2005 which was considered in Chhajer s case has also been interpreted in Polycot Corporation (supra). The consistent view of the Court has been that the CBDT instruction would apply to pending cases as well. The main objective of such instructions is to reduce the pending litigation where the tax 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 Commissi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2 U/s 260A before High Court 10,00,000/- 3 Before Supreme Court 25,00,000/- It is clarified that an appeal should not be filed merely because the tax effect in a case exceeds the monetary limits prescribed above. Filing of appeal in such cases is to be decided on merits of the case. 4. For this purpose, tax effect means the difference between the tax on the total income assessed and the tax that would have been chargeable had such total income been reduced by the amount of income in respect of the issues against which appeal is intended to be filed (hereinafter referred to as disputed issues ). However the tax will not include any interest thereon, except where chargeability 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for any other assessment year or in the case of any other case for the same or any other assessment year, by not filing an appeal on the same disputed issues. The Departmental representatives/counsels must make every effort to bring to the notice of the Tribunal or the Court that the appeal in such cases was not admitted only for the reason of the tax effect being less than the specified monetary limit and, therefore, no inference should be drawn that the decisions rendered therein were acceptable to the Department. Accordingly, they should impress upon the Tribunal or the Court that such cases do not have any precedent value. As the evidence of not filing appeal due to this instruction may have to be produced in courts, the judicial folders in the office of CIT 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, Instr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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