CASE LAW DETAILS
Decided by: Mumbai High Court
In The case of: CIT v Polycott Corporation
Appeal No. : ITA No. 1241 of 2008
Decided on: January 23, 2009
SUMMARY OF CASE LAW:
The instructions of CBDT cannot be interpreted as a statute though it is pursuant to the power conferred under section 268A of the Income-tax Act; what the Court has to consider is the plain language of the instructions and the object behind the same.
9. Having considered the contentions, in our opinion, the instructions cannot be interpreted as a Statute though it is pursuant to the power conferred under Section 268-A of the Income Tax Act. What the Court has to consider is the plain language of the paragraph and the object behind the said provisions. The object appears to be not to burden courts and Tribunals in respect of matters where the tax effect is less than the limit prescribed. Even before this instruction CBDT has been issuing instruction, the last one being on 24th October, 2005 where the monetary limit has been fixed. In those instructions the only exception had been that in cases involving substantial question of law of importance as well as in cases where the same question of law will repeatedly arise, either in the case concerned or in similar case, appeal should be filed without being hindered by the monetary limits. The present instructions seems even to limit the issues in so far as the same question of law or recurring issue except to the extent provided in para.5. On a proper reading of para.5 of the instructions it would be clear that a duty is cast on the Assessing Officer that even if the disputed questions arise for more than one assessment year then an appeal should be filed only in respect of those years where the monetary limit as specified in para.3 of the instructions. The exception, however, is carved out in respect of a composite order of the High Court or appellate authority. In other words where the High Court or Tribunal has passed a composite order in respect of the same assessee on the same question and/or on different question and for one of the assessment years, the tax effect is more than the monetary limit then the appeal shall also be filed in respect of all the assessment years. The submission on behalf of the assessee is that the composite order must relate to a common issue. We beg to disagree on a plain and literal construction of the instruction. The expression “which involves more than one year” would have no meaning if it was restricted only to the expression “common issues”. The expression, therefore, of a composite order will have to be read to mean an order in respect of the same assessee for more than one year. An disposing of several appeals on a common question of law by appellate authority, cannot be said to be a composite order as the order involves appeals by different persons, which appeals for the sake of convenience have been only clubbed together for the purpose of disposal on that issue. In our opinion, this would be the correct reading of para.5 of the instruction.