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I.T.O., Ward-35 (4) , Kolkata Versus Mrs. Manjula Devi Dugar Kolkata

2015 (6) TMI 452 - ITAT KOLKATA

Prescribed monetary limits for filing of appeal before ITAT - Whether, this appeal of revenue, which is below the prescribed limit of tax effect in view of the Board’s Instruction No.5/2014 issued on 10.07.2014 revising the monetary limits for filing of appeals by the Department before ITAT is maintainable or not? - Held that:- On query from the Bench, the Ld. DR could not point out any of the exceptions as provided in the Circular as that this is a loss case having tax effect more than the pres .....

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se has been 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.1895/Kol/2013 - Dated:- 1-6-2015 - Hon ble Shri B.P.Jain,JJ. For thePetitioner: Shri Sanjay, Sr.DR, Addl. C.I.T. For the Respondent : None ORDER Per Shri B.P.Jain, AM : This appeal of the .....

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al before ITAT fixing the tax effect limit of ₹ 4 lacs, the same is not maintainable and liable to be dismissed in limine. The only issue now remains before me is, whether, this appeal of revenue, which is below the prescribed limit of tax effect in view of the Board s Instruction No.5/2014 issued on 10.07.2014 revising the monetary limits for filing of appeal by the Department before ITAT is maintainable or not. Ld. CIT-DR has drawn our attention to para-11 of the Instruction and argued t .....

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assage 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 is less than ₹ 2 lakhs. The same policy for old matters needs to be ad .....

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ally 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 .....

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t an exception for filing of appeals and References under Section 260 A of the Act. The legislature has prescribed that the CBDT is empowered to issue circulars and instructions from time to time, with regard to filing of appeals depending on the tax effect involved. Thereafter, in 2008, CBDT Instruction No. 5 of 2008 dated 15th May, 2008 was issued. This Court in the case of "Commissioner of Income Tax V/s Madhukar K. Inamdar (HUF) reported in (2010) 229 CTR (Bom) 77, interpreted the afore .....

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on this subject which were operative at the 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 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 .....

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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 is of recurring nature even then, the revenue is not expe .....

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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 pending cases. Accordingly, the Court dismissed all the appeals having a tax effect of less than ₹ 4 Lacs. 10. The new CBDT instructions have been issued on 9th February, 2011, .....

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not apply to writ matters and direct tax matters other than income tax. It further provides that where the tax effect is not quantifiable, the Department should take a decision to file appeals on merits of each case. Clause 11, again provides that the instruction would apply to appeals filed on or after ....2011 and appeals filed before ...... 2011 would be governed by the instructions on this subject, operative at the time when such appeals were filed. 11. In our opinion, when a similar clause .....

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in 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 Polyc .....

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rnataka 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 .....

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ssed that almost all High Courts are of the unanimous view, considering the main objective of such instructions that to reduce the pending litigation, where the tax effect is considerable low or small, the appeal is not maintainable. The recent instruction revising the monetary limit to ₹ 4 lakh for filing appeal before ITAT on income tax matters, as issued vide Instruction No.5/2014 FNo279/Misc.142/2007-ITJ(Pt) dated 10th July, 2014 will apply to pending appeals also for the reason that t .....

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unal, High Courts and Supreme Court keeping in view the monetary limits and conditions specified below. 3. Henceforth appeals shall not be filed in cases where the tax effect does not exceed the monetary limits given hereunder:- S No. Appeals in Income-tax matters Monetary Limits (in Rs) 1 Before Appellate Tribunal 4,00,000/- 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 excee .....

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argeability 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 assessme .....

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eforth, 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, which involves more than one assessment year and common issues in more than one year, appeal shall be filed in respect of all such assessment years even if the tax effect is less than the prescribed monetary limits in any of the year(s), if it is decided to filed appeal in respect of the year(s) in which tax effect exceeds the m .....

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etary limit specified in this instruction . Further, in such cases, there will be no presumption that the Income-tax Department has acquiesced in the decision on the disputed issues. The Income-tax shall not be precluded from filing an appeal against the disputed issues in the case of the same assessee for any other assessment year, or in the case of any other assessee for the same or any other assessment year, if the tax effect exceeds the specified monetary limits. 7. In the past, a number of .....

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Tribunal or the Court that the appeal in such cases was not filed or 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 judic .....

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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 matte .....

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