TMI Blog2020 (1) TMI 358X X X X Extracts X X X X X X X X Extracts X X X X ..... Government departments for the guidance of the officers. Such circulars or instructions do bind the department and its officers. But they do not bind the Court in interpretation of statutory provisions. Circulars issued by a Government department cannot have any primacy over the decision of the jurisdictional High Court. Circulars and instructions thus issued will not survive, if they are contrary to the decision of a Constitutional Court. If a circular provides an interpretation of law that runs contrary to the interpretation given by the jurisdictional High Court, it no longer survives. Circulars or instructions given by the department are no doubt binding on the authorities under the Act, but when the Supreme Court or the High Court has declared the law on the question arising for consideration, it will not be open to a party to contend that the circular should be given effect to and not the view expressed in the decision of the Supreme Court or the High Court. Any direction issued by the Government in a circular would be mere expression of its opinion. But, once a provision has been interpreted by the superior court, then it will not be open to the assessee to project an inter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al also relied upon the decision of this Court in Chirakkal Service Co-operative Bank Limited (supra) and dismissed the appeals filed by the revenue. The cross objections filed by the assessees were also dismissed on the ground that they only supported the view taken by the first appellate authority. Though the decision of the Tribunal was in their favour, the assessees have filed these appeals against the orders passed by the Tribunal, raising only the grievance that the Tribunal has not considered the effect of the circular issued by the department in the matter. 4. We have heard learned counsel for the appellants and also the learned Standing Counsel for the Income Tax Department. 5. Section 80P of the Act deals with deduction in respect of income of co-operative societies. Sub-section (1) of that section provides that where, in the case of an assessee being a cooperative society, the gross total income includes any income referred to in sub-section (2) of that section, there shall be deducted, in accordance with and subject to the provisions of Section 80P, the sums specified in sub-section (2) thereof, in computing the total income of the assessee. Sub-sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provisions under sub-section(4) of Section 80P . The Full Bench has further held as follows: Moreover, the law laid down by the Division Bench in Chirakkal is not good law, since, in view of the law laid down by the Apex Court in Citizen Cooperative Society, on a claim for deduction under Section 80P of the Income Tax Act, by reason of sub-section (4) thereof, the Assessing Officer has to conduct an enquiry into the factual situation as to the activities of the assessee society and arrive at a conclusion whether benefits can be extended or not in the light of the provisions under sub-section (4) of Section 80P of the IT Act . 8. The orders passed by the Tribunal, confirming the decision of the first appellate authority merely on the basis of Chirakkal (supra), are erroneous, in the light of the law laid down by the Full Bench of this Court in Mavilayi Service Cooperative Bank (supra). However, the revenue has not filed any appeal or cross objection challenging the orders passed by the Tribunal and we cannot interfere with the decision of the Tribunal in these appeals filed at the instance of the assessees. 9. The grievance of the appellan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ettled proposition of law that Circulars and instructions issued by the Central Board of Excise and Customs are no doubt binding in law on the authorities under the respective Statutes but when this Court or the High Court declares the law on the question arising for consideration, it would not be appropriate for the Courts or the Tribunal, as the case may be, to direct that the Board's Circular should be given effect to and not the view expressed in a decision of this Court or a High Court . 12. In Commissioner of Central Excise v. M/s Ratan Melting Wire Industries: (2008) 13 SCC 1, the Constitution Bench has held as follows: Circulars and instructions issued by the Board are no doubt binding in law on the authorities under the respective statutes, but when the Supreme Court or the High Court declares the law on the question arising for consideration, it would not be appropriate for the Court to direct that the circular should be given effect to and not the view expressed in a decision of this Court or the High Court. So far as the clarifications/circulars issued by the Central Government and of the State Government are concerned they represent merely th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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