COMMISSIONER OF INCOME TAX-I Vs. S SUMATHI

JUDGEMENT

(1.) THESE appeals are at the instance of the revenue filed against the order of the Income Tax Appellate Tribunal, Madras 'D' Bench, dated 13.02.2004 made in M.P. No.156(Mds)/2003 in ITAs Nos.369 & 370/Mds/2000 for the assessment years 1994-95 and 1995-96.

(2.) THE facts of this case are as follows : THE assessee filed returns for the assessment years 1994-95 and 1995-96 admitting a total loss of Rs.44,650/- and Rs.84,531/-. A notice under section 148 of the Income Tax Act was issued and after hearing the assessee, the assessing officer arrived at the tax due at Rs.960/- and Rs.300/- respectively. Aggrieved by the order of the Assessing Officer, the assessee filed an appeal before the Commissioner of Income Tax (Appeals), who allowed the appeal filed by the assessee. Aggrieved against the order, the revenue carried the matter on appeal to the Income Tax Appellate Tribunal. Without going into the merits of the case, the Tribunal dismissed the departmental appeal in limine on the ground that the tax effect is less than Rs.1.00 lakh by following the decisions in the case of CIT v. Camco Colour Co., 254 ITR 565 and CIT v. S.Annamalai, 258 ITR 675. THE revenue filed a miscellaneous petition to review that order of the Tribunal contending that the decisions relied on by the Tribunal were rendered in the context of appeals actually filed subsequent to the issue of Instruction No.1979. In those two cases, the Courts noticed that when the prescribed limit was Rs.2.00 lakhs for filing appeals to the High Court in tax effect, these appeals involving lower tax effects were filed in disregard to the government instruction. Subsequent increase in limits for filing appeals will not affect appeals which were correctly filed and have been pending for a long time. THE said contention of the revenue was rejected by the Tribunal and the miscellaneous petition was dismissed. THE correctness of the same is put in issue in these appeals.

(3.) AN issue similar to the issue in this case came up for consideration before a Division Bench of this Court in the case of CWT vs. S. ANnamalai, (2002) 258 ITR 675, wherein it was held that in order to reduce the litigation for filing departmental appeals/references before the Income Tax appellate Tribunal, High Courts and the Supreme Court, the Central Board of Direct Taxes, by Circular F. No,279/126/98-IT, dated March 27,2000, refixed the monetary limits, however, casting out certain exceptions. The exceptions stated are (i) where revenue audit objection in the case has been accepted by the department, (ii) where the Board's order, notification, instruction or circular is the subject matter of an adverse order, (iii) where prosecution proceedings are contemplated against the assessee, and (iv) where the constitutional validity of the provisions of the Act are under challenge.