TMI Blog2016 (5) TMI 112X X X X Extracts X X X X X X X X Extracts X X X X ..... 7; 20 lacs as the objective of the Circular would stand fulfilled on its application even to pending References more particularly bearing in mind that there are 1149 number of References still awaiting disposal by this Court and a large number of them would have tax effect of less than ₹ 20Lakhs. In the above view, we hold that as admittedly, the tax effect is less than ₹ 20 lacs in the present Reference Application at the instance of the Revenue, the same is being returned unanswered. However, we make it clear that the question of law as raised for our opinion is left open be considered in an appropriate case. - INCOME TAX REFERENCE NO. 213 OF 1997 - - - Dated:- 8-1-2016 - M.S.SANKLECHA, AND B.P.COLABAWALLA, JJ. For The Appellant : Mr. Suresh Kumar For The Respondent : Mr. Mihir Naniwadekar ORAL ORDER Per M. S. Sanklecha, J. This Reference under Section 256(1) of the Income Tax Act, 1961 (the Act) is Income Tax Appellate Tribunal at the instance of the Revenue, seeks our opinion on the following question of law: Whether on the facts and in the circumstances of the case, the Tribunal was right in law in upholding the order of the CIT( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is in spite of our having kept back the Reference only to enable Mr. Suresh Kumar to obtain instructions on the department's view on the appropriate interpretation of the Circular. It may be pointed out that in December 2015, while dealing with appeals filed by the Revenue, having tax effect of less than ₹ 20 lacs were being considered, we had specifically asked the learned Counsel for the Revenue including Mr. Suresh Kumar on the department's view of the applicability of the Circular to pending References and we were informed (one of us was a member of that bench) that due instructions on that account would be obtained and communicated to the Court at the hearing of the References. It is pertinent to note that this Reference was listed for today almost a week in advance. However no assistance is forthcoming. No attempt is also being made to obtain necessary clarification from the CBDT nor is a statement being made that according to them the Circular has no application and they want to pursue this Reference. Therefore though it is for the Revenue to take a decision on wanting to pursue this Reference or not, in this case it seems that the the Commiserate is not wantin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red 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 to be appealed against. 5 The Assessing Officer shall circulate 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 wit reference to the tax effect in the relevant assessment y ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uction may have to be produced in Courts, the judicial folders in the office of CsIT 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, or (d) Where the addition relates to undisclosed foreign assets/ bank accounts. 9 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 relevant provisions of statute and rules. Further, filing of appeal in cases of Income Tax, where the tax effect is not quantifiable or not involved or not involved, such as the case of registration of trusts or institutions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ruction No.5 dated 10 July, 2014 read with decision of this Court in Commissioner of Income Tax v/s. Madhukar Inamdar (HUF) 318 ITR 149; Commissioner of Income Tax v/s. Pithwa Engineering Works 276 ITR 598 and Commissioner of Income Tax v/s. Vijaya Kawekar 380 ITR 237 (dealing with earlier Circulars/ Instructions) the instructions of 2014 issued by CBDT would also be applicable to pending appeals and reference. 5 In fact this Court in Madhukar Inamdar (HUF) has while dealing with Circular dated 15 May 2008 observed as under: 8: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, filing of cases at the instance of the Revenue has increased; consequently, the burden on the department has also increased to a tremendous extent. The corridors of superior courts are choked with huge pendency of cases. ........ In this view the Board has rightly taken a decision not to file appeals, if the tax effect is less than ₹ 4 lakhs so as to reduce the burden of the Department as well of the Tribunals and courts. The same policy for old matters needs to be adopted by the department, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rty but only if the court to which the appeal is preferred is satisfied that a substantial question of law arises and admits the appeal for further consideration. Therefore a pending appeal under Section 260A of the Act is no different from a pending Reference in as much as in the case of a Reference the Tribunal is of the view that a substantial question of law arises either on its own (Section 256(1) of the Act) or as directed by Court (Section 256(2) of the Act) which requires the opinion of the Court, while in a pending appeal under Section 260A of the Act which has been admitted, the Court is of the view that a substantial question of law arises which requires due consideration by the Court. Therefore we construe the Circular dated 10th December 2015 as applicable even to pending References in the same manner they apply to pending appeals. 8 The need for the CBDT to issue the 15th December 2015 Circular and to clarify that it would apply retrospectively to govern even pending appeals arose on account of the enormous increase in the number of appeals being filed by the Revenue over the years. To give figures of this Court in the year 1995, the total number of References file ..... X X X X Extracts X X X X X X X X Extracts X X X X
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