Circular dated 15.5.2008 laying down monetary limit controls the filing of the appeals and not their hearing. Appeals filed as per applicable limit at the time of filing cannot be governed by circular applicable at the time of hearing. The object of the Circular u/s 268A is only to govern monetary limit for filing of the appeals. There is no scope for reading the circular as being applicable to pending appeals. A contrary view has been taken in CIT vs. Delhi Race Club Ltd(HC New Delhi)
CIT Vs. M/s Varindera Construction Co
ITA No. 209 of 2003 Date of decision: 04.2.2011
HIGH COURT OF PUNJAB AND HARYANA
1. As per office report, file was not available on account of fire in the Court premises. The file has been reconstructed on the basis of paper book furnished by learned counsel for the appellant.
2. The matter has been placed before this bench in pursuance of order of reference dated October 5, 2010 to the following effect:-
“When this appeal was taken up, learned counsel for the assessee raised a preliminary objection relying on a judgment of this Court in CIT v. Abhinash Gupta, (2010) 41 DTR (P&H) 129. He submitted that the tax effect involved in the appeal was below the limit prescribed for filing of appeal by circular issued in the year 2008.
Learned counsel for the revenue submitted that the circular issued in the year 2008 did not have retrospective effect and did not control the appeal already filed which had to be decided according to the policy at the time the appeal was filed.
In the judgment relied upon on behalf of the assessee, after referring to judgment of Bombay High Court in CIT v. Madhukar K.Inamdar (HUF), (2009) 318 ITR 149 (Bom.), it was observed that though the circular was not retrospective, it applied to pending appeals.
We are prima-facie of the view that the circular about filing of appeals cannot apply to appeals already filed prior to the date of the circular. In our opinion, the view already taken in the judgment relied upon by learned counsel for the assessee may require consideration by a larger bench.
Let the matter be placed before Hon’ble the Chief Justice for constituting a larger bench.”
3. We have heard learned counsel for the parties.
4. Question for consideration is whether circular issued in the year 2008 laying down monetary limit for filing of the appeal by the department will govern all pending appeals irrespective of prescribed monetary limit applicable at the time of filing.
5. Learned counsel for the revenue submits that current circular dated 15.5.2008 prescribing monetary limit for filing of appeals cannot apply to appeals filed prior to the date of the said circular. View to the contrary taken in judgment of this Court in Abhinash Gupta following the judgment of Hon’ble the Bombay High Court in Madhukar K.Inamdar needs reconsideration. In Madhukar K.Inamdar, Hon’ble the Bombay High Court wrongly followed the reasoning of circular dated 5.6.2007 without appreciating the distinction in the scheme of the two circulars i.e. circular dated 5.6.2007 and 15.5.2008. Infact, the document referred to as circular dated 5.6.2007 was an office memorandum to comply with direction of Bombay High Court dated 23.4.2007 in ITA(L) No. 118 of 2003 CIT, Mumbai v. M/s Vitessee Trading Limited, requiring review of pending cases to check whether prescribed monetary limit had been followed. From that it was wrongly inferred that all pending appeals must be in conformity with the current monetary limit. A pending appeal could not be governed by a subsequent circular unless it is specifically so provided. The object of circular under section 268A is to regulate filing of appeal and not to regulate appeals already filed. Once an appeal is properly filed, hearing is not in the hands of a party. If such appeal is controlled by new monetary limit applicable at the time of hearing, there will always be uncertainty. Such an interpretation would also be against the accepted principle that act of Court will not prejudice anyone (actus curiae neminen gravabit). A particular case where the Court may not go into merits on account of smallness of the amount may stand on different footing.
6. Learned counsel for the assessee opposed this submission. It is submitted that the view taken in Madhukar K.Inamdar as followed by this Court in Abhinash Gupta should be followed and all pending appeals should be governed by circular dated 15.5.2008. If the tax effect involved is less than the monetary limit now specified, the said appeal should not be considered on merits even if appeal was properly filed as per prescribed monetary limit at appropriate time.
7. To appreciate the rival submissions, it will be appropriate to refer to the relevant provision and circulars:-
“S.268A: Filing of appeal or application for reference by income-tax authority.
The Board may, from time to time, issue orders, instructions or directions to other income-tax authorities, fixing such monetary limits as it may deem fit, for the purpose of regulating filing of appeal or application for reference by any income-tax authority under the provisions of this Chapter.
(2) Where, in pursuance of the orders, instructions or directions issued under sub-section (1), an income-tax authority has not filed any appeal or application for reference on any issue in the case of an assessee for any assessment year, it shall not preclude such authority from filing an appeal or application for reference on the same issue in the case of—
(a) the same assessee for any other assessment year; or
(b) any other assessee for the same or any other assessment year.
(3) Notwithstanding that no appeal or application for reference has been filed by an income-tax authority pursuant to the orders or instructions or directions issued under sub-section (1), it shall not be lawful for an assessee, being a party in any appeal or reference, to contend that the income-tax authority has acquiesced in the decision on the disputed issue by not filing an appeal or application for reference in any case.
(4) The Appellate Tribunal or Court, hearing such appeal or reference, shall have regard to the orders, instructions or directions issued under sub-section (1) and the circumstances under which such appeal or application for reference was filed or not filed in respect of any case.
(5) Every order, instruction or direction which has been issued by the Board fixing monetary limits for filing an appeal or application for reference shall be deemed to have been issued under sub-section (1) and the provisions of sub-sections (2), (3) and (4) shall apply accordingly.”
Circular dated 5.6.2007
“ F.No.279/Misc.56/07-ITJ
Government of India,
Ministry of Finance
Department of Revenue
Central Board of Direct Taxes
New Delhi the June 5th , 2007
Office Memorandum
Sub: Compliance with the Board’s instructions in filing appeals before the ITAT/High Court/Supreme Court-reg.
The undersigned is directed to invite the attention to the Board’s instruction Nos.02/2005 and No.1979 read with instruction No.1985 whereby certain guidelines like monetary limits and other criteria laid down for filing appeals before the ITATs, High Courts and the Supreme Court have come to the notice of the Board that Hon’ble Bombay High Court has observed in the ITA (L) No.118 of 2003 in the case of CIT Mumbai v. M/s Vitessee Trading Limited dated 23.4.2007 that the Department has not been following the instructions issued by the CBDT while filing appeals and has directed that wherever, the appeals already filed fail to meet the criteria of monetary limits the same should be withdrawn unless the question of law involved or raised in appeal or referred to the Court is of a recurring nature required to be settled by the Court.
The undersigned is therefore directed to request that all appeals already filed by the Department before the Bombay High Court should be examined case to case basis by the respective CCsIT/CsIT and in cases where the criteria of monetary limits as per the prevailing instruction is not satisfied, the appeal should be withdrawn unless the question of law involved or raised in appeal or referred to the High Court is of a recurring nature required to be settled by the Court.
(Sanjay K.Bharat)
Under Secretary to the Govt. of India”
Circular dated 15.5.2008
“Revision of monetary limits for filing appeals by the Department before Income Tax Appellate Tribunals, High Courts and Supreme Court, measures for reducing litigation
INSTRUCTION NO.5/2008, DATED 15-5-2008
Reference is invited to Board’s instructions No.1979 dated 27.3.2000, No.1985 dated 29.6.2000, No.6 of 2003 dated 17.7.2003, No.19 of 2003 dated 23.12.2003, No.5/2004 dated 27.5.2004, No.2/2005 dated 24.10.2005 and No.5/2007 dated 16.7.2007, wherein monetary limits for filing departmental appeals (in income Tax matters) and other conditions were specified, for filing appeals before Appellate Tribunals, High Courts and Supreme Court.
2. In super session of the above instructions, it has been decided by the Board that departmental appeals will be filed before Appellate Tribunals, High Courts and Supreme Court as per monetary limits and conditions specified below.
3. Appeals will henceforth be filed only in cases where the tax effect exceeds monetary limits given here under:-
