COMMISSIONER OF INCOME TAX Vs. VITESSEE TRADING LTD

JUDGEMENT

(1.) Heard the learned Counsel for the Appellant. Perused the petition.

(2.) We, during the course of exercising our appellate jurisdiction under Section 260A of the Income Tax Act, 1961, (for short "the Act") noticed that in a quite few matters in spite of the circulars of the Central Board of Direct Taxes (Ministry of Finance Department), one of them being dated October 24, 2005, (which clearly stipulates that the Income Tax Department should not file appeals under Section 260A of the Act, wherein the tax effect is less than Rs. 4 lakhs), the Department is filing appeals without following the guidelines laid down in the said circular.

(3.) At this juncture, it will also be relevant to note that through our two judgments in the case of CIT v. Cameo Colour Co., 2002 254 ITR 565 and another in the case of CIT v. Pithwa Engg. Works, 2005 276 ITR 519 it is categorically ruled that the circulars issued by the Central Board of Direct Taxes, from time to time, are binding on the Income Tax Department, since they have a statutory force. The said judgments clearly lay down that the Department is not expected to file appeals wherein the tax effect is less than Rs. 2 lakhs, now revised to Rs. 4 lakhs.