Case Law Details

Case Name : CIT Vs. M/s Ranka & Ranka (Karnataka High Court)
Appeal Number : ITA 3191/2005
Date of Judgement/Order : 02/11/2011
Related Assessment Year :
Courts : All High Courts (4419) Karnataka High Court (216)

CIT Vs. M/s Ranka & Ranka (Karnataka High Court)

In this judgment HC held that CBDT’s Instruction No. 3 of 2011 dated 9.2.2011 applies to appeal filed before the issue of instruction also and all appeal pending on the date of instruction before High Court in which tax effect does not exceed the monetary limits of Rs. 10 Lakh for  filing appeal by Income Tax Department can be held as non Maintainable.  High Court has held as follows:-

Though paragraph 11 of Instruction No. 3/2011 provides that the revised tax limits will apply only to fresh appeals, the same has to be held to be applicable to pending appeals as well because

(i) the Department has not kept in mind the object with which such Instructions have been issued from time to time;

(ii) the object of Section 268A which empowers the CBDT to issue such instructions & under the National Litigation Policy,  2011 the Government has to be an “efficient & responsible” litigant and not a “compulsive” litigant and appeals should not be pursued in low-tax matters,

(iii) a beneficial circular has to be applied retrospectively

(iv) extending the benefit of the Instruction to pending matters will be only in the nature of a one-time settlement akin to the KVSS & VDIS,

(v) by experience it is seen that tax is levied by defeating Parliament’s intention to grant incentives to trade and industry & where the Tribunal has come to the rescue of the assessees, appeals are filed mechanically & compulsively with the approach of “let the Court decide” & to “save their skin”;

(vi) there would be an anomaly in confining the Instruction to fresh appeals because if the Tribunal has decided a case expeditiously, such matters will be denied the benefit of the bar on filing appeals while if there is no disposal by the Tribunal owing to pendency etc, the benefit accrues to the assessee. The benefit to which the assessee is entitled cannot depend on the date of the decision over which neither the assessee nor revenue has any control;

(vii) the Instruction would be discriminatory, if held to be prospective only. It can be saved from the vice of discrimination by holding it as retrospective.


Case Number: ITA 3191/2005
Respondents: M/S RANKA & RANKA
Date of Judgment: 2-Nov-2011
Download Judgment/Order

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Category : Income Tax (28348)
Type : Judiciary (12658)
Tags : high court judgments (4735)

0 responses to “CBDT’s Low Tax Effect Circular discriminatory”

  1. R. Ramamurthy says:

    Lot of litigation between the revenue and small and medium scale assessees is solved with this judgment. The Hon’ble High Court has rightly held it is retrospective in nature and unless such interpretation is given, the benefit goes only to a sect, though the litigation amount involved in appeals filed earlier and now are the same. With this the pend ency will be reduced and fresh filing will also gets diluted at the earliest state.

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