COMMISSIONER OF INCOME TAX Vs. VIJAYA

JUDGEMENT

(1.) Both these tax appeals are being heard together, as a common question arises in these appeals. The Revenue has filed these appeals against the orders passed by the Tribunal. The appeals have been filed for various assessment years against the same assessee. A contention is raised on behalf of the assessee in these appeals that since the tax effect in each appeal is less than the monetary limit of Rs. 10 lacs prescribed in the Instruction No. 3 of 2011 dt. 9th Feb., 2011 by the CBDT, the appeals are not maintainable. According to the assessee, there is a specific bar on the Revenue to file appeals in view of the CBDT instructions.

(2.) Shri Kulkarni, the learned advocate appearing for the assessee in these tax appeals has submitted before us that the CBDT instructions, fixing the monetary limits for the Revenue to file appeals before the High Court have been issued in consonance with the provisions of s. 268A(1) of the IT Act, 1961 (hereinafter referred to as "the Act"). According to him, similar instructions had been issued by the CBDT at various points of time even prior to the insertion of s. 268A(1) in the Act. He submitted that these CBDT instructions have been interpreted by this Court in various decisions and it has been held that they are applicable not only to new cases, which may be filed by the Revenue but also to the pending appeals. He submits, therefore, that since the tax effect in both these appeals is less than Rs. 10 lacs, the appeals are not maintainable. The tax effect in Tax Appeal No. 76 of 2007 for the asst. yr. 1989-90 is Rs. 5,29,625 whereas the tax effect in Tax Appeal No. 78 of 2007 in respect of the asst. yr. 1988-89 is Rs. 2,28.040. He, therefore, submits that the appeals should be dismissed as the issue whether such appeals which are pending and are within the monetary limits set by the CBDT, is covered by the latest CBDT instructions, is no longer res integra.

(3.) Prior to the amendment of the IT Act, whereby s. 268A has been inserted with retrospective effect on 1st April, 1999, the CBDT issued instructions from time to time, revising the monetary limits for filing Departmental appeals/references before the Tribunal, the High Courts and the Supreme Court as a measure of reducing litigation. For that purpose, the CBDT issued instructions on 27th March, 2000 that appeals under s. 260A or references under s. 256(2) before the High Court should be filed only when the tax effect was less than Rs. 2 lacs. In cl. 3 of that instruction, the Revenue was directed to contest or appeal against the orders irrespective of the tax effect where (i) the revenue audit objection in the case has been accepted by the Department; (ii) the Board's order, notification. Instruction or circular is the subject-matter of an adverse eorder; (iii) prosecution proceedings are contemplated against the assessee; and (iv) the Constitutional validity of the provisions of the Act is under challenge. Clause 7 mentions that this instruction would come into effect from 1st April, 2000.