TMI Blog2018 (4) TMI 1740X X X X Extracts X X X X X X X X Extracts X X X X ..... y applying the law laid down by the Hon'ble Supreme Court, in Surya Herbal Ltd., case (supra), as the two caveats mentioned thereunder does not arise in the instant case. - T.C.(A).No.901 of 2008 - - - Dated:- 18-4-2018 - Mr. T.S.Sivagnanam And Mr. N.Seshasayee, JJ. For Appellant: Mr.M.Swaminathan and Mr. T.Ravikumar Senior Standing Counsel For Respondent: Mr.M.P.Senthil Kumar JUDGEMENT T.S.Sivagnanam, This Tax Case Appeal filed by the Revenue is directed against the order passed by the Income Tax Appellate Tribunal, ''B'' Bench, Chennai, (ITAT, for brevity) dated 31.12.2007, in I.T.A.No.2116/Mds/2006. 2. The Appeal has been admitted on the following substantial question of law:- Whether in the facts and circumstances of the case, the Income Tax Appellate Tribunal was right in law, in holding that the assessee is entitled to deduction under Section 80-O of the Act is valid law? 3. At the time, when the Appeal was taken up for hearing, the learned counsel for the respondent/assessee raised an objection to the hearing of this Appeal by placing reliance on Circular No.21 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... struction No.1979, dated 27.03.2000 and stated that, the subsequent Instruction No.1985, dated 29.06.2000 and Instruction No.2 of 2005, dated 24.10.2005, will continue to govern the decision for filing of Departmental Appeals. The said Instruction No.5 of 2007, dated 16.07.2007 will come into effect from 16.07.2007. 4.3) The learned Senior Standing Counsel referred to the Circular, dated 02.09.2011, for the purpose that, Appeals filed on or after 09.02.2011, would be governed by the old instructions operative at the time of filing of Appeal. It is further submitted that, in Instruction No.3 of 2011, dated 09.02.2011, the monetary limit for filing Appeals under Section 260A was increased to ₹ 10,00,000/-, however, it was made applicable only prospective and the earlier Instruction would govern the Appeals filed on or after 2011. The learned Senior Standing Counsel also invited the attention of this Court to Instruction No.5 of 2014, dated 10.07.2014, where, the monetary limit, while being retained at ₹ 10,00,000/-, held that, it will be applicable to the Appeals filed on or after 10.07.2014. 4.4) After referring to the above Circulars, the learned Seni ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r a large number of matters. With these two caveats, the Hon'ble Supreme Court observed that, in such cases, the attention of the High Court would be drawn and the Department was even given liberty to move the High Court within a time frame. 5. Thus, it is submitted that the Circular cannot have retrospective effect and can only be prospective and the Circulars only speak about the filing of Appeals and not hearing of Appeals. 6. Mr.M.P.Senthilkumar, the learned counsel appearing for the respondent/assessee has drawn the attention of the Court to the decision of the Hon'ble Supreme Court, in the case of S.R.M.B.Diary Farming (P) Ltd.,(supra) which has dealt with the effect of Circular No.3 of 2011, dated 09.02.2011, and after taking note of the certain decisions on the point has held that the Circulars/Instructions would apply to appeals to be filed as well as pending appeals and the judgment puts at rest all controversies on the issue and the judgment is a straight answer to the contentions advanced by the learned Senior Standing Counsel for the Revenue. 7. To decide the point in issue, we wish to first take note of the decision of the Apex Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppeals and the Appeals to be filed henceforth before the High Courts and the Tribunals. We wish to add that, this condition contained in the Circular, dated 10.12.2015, was not contained in the earlier Circulars, which stated that the circulars were prospective in operation and the Appeals filed earlier were to be governed by respective instructions, which were holding the field at the time of filing of Appeals. 10. An argument was advanced by the learned Senior Standing Counsel for the Revenue that the circular can have effect only, while filing the appeal and not while hearing of the appeal and would have no impact on the appeals, which are admitted and pending. However, in the Circular issued in the year, 2015, it has been made clear that, it will apply to pending appeals as well. In respect of the earlier circulars, it would be relevant to take note of the decision of the Hon'ble Supreme Court in Mathew M. Thomas Vs Commissioner Of Income-Tax [(1999) (III) ELT 4 SC] wherein, the Hon'ble Supreme Court, while considering the effect of Circular No.445, dated 16.05.1986, pointed out that Circular No. 455 dated 16.5.1986 issued by the C.B.D.T. is applicable to all ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to prosecute the matters when the tax effect is less than the threshold limit prescribed in the respective Circulars. If this interpretation is given, much of the confusion, which has revolved around the interpretation of the Circular would stand effaced. 14. Therefore, the Circular has to be understood as part of the litigation policy of the Government of India to reduce the litigation and to bring down the number of Appeals, which are pending before the Court and also ensure that the Appeals are not preferred by the Department without proper examination of the case on merits. Having held so, we will have to examine as to whether, in the instant case, any of the two caveats, which were pointed by the Hon'ble Supreme Court, in Surya Herbal Ltd., case (supra) would apply, viz., the circular, if applied, would have a cascading effect and where common principles may be involved in subsequent group of matters or a large number of matters. Mr. M.Swaminathan, the learned Senior Standing Counsel for the Revenue does not dispute that none of the two caveats would stand attracted to the facts of the case on hand. Thus, the circular issued by the CBDT would apply to the presen ..... X X X X Extracts X X X X X X X X Extracts X X X X
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