ACIT, Trichy V. Shri R.Viswanathan, Trichy

ITA 30/CHNY/2011

• Counselvise Citation: [2011] 100 COUNSELVISE.COM (IT) 2677 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-03-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2004-2005
• Appeal Filed On: 10-01-2011

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BENCH A CHENNAI BEFORE SHRI ABRAHAM P.GEORGE, AM AND SHRI GEORGE MATHAN, JM ITA. NO. 30//MDS/2011 A Y: 2004-05 THE A.C.I.T CIRCLE II, RANGE II TRICHY 620 001. VS. SHRI R. VISWANATHAN NO. 35, THANJAVUR ROAD TRICHY 620 008 (PAN NO. AAEPV 8545 M) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI S. SRIVATSAN DEPARTMENT BY : SHRI SHAJI P. JACOB O R D E R PER ABRAHAM P. GEORGE, AM IN THIS APPEAL FILED BY THE REVENUE, IT HAS TAKEN TWO GROUNDS. FIRST IS RELATING TO DELETION OF AN ADDITION OF RS. 2 LAKHS AND SECOND IS REGARDING DELETION OF AN ADDITION OF RS. 7,67,50 0/-. TOTAL ADDITIONS WHICH HAVE BEEN DELETED, THEREFORE, WORKS OUT TO RS. 9,67,500/-. PAGE 2 OF 16 ITA NO. 30/MDS/2011 2. LD. COUNSEL FOR THE ASSESSEE POINTED OUT THAT TA X EFFECT IN THIS CASE WAS LESS THAN RS. 3 LAKHS AND IN VIEW OF CIRCU LAR NO.3 OF 2011 DATED 09-02-2011, APPEAL WAS NOT MAINTAINABLE. 3. PER CONTRA, THE LD. D.R. SUBMITTED THAT THE CIRC ULAR CITED BY THE LD. A.R. WOULD NOT APPLY TO PENDING APPEALS, BU T ONLY EARLIER CIRCULAR NO. 5 OF 2008 DATED 15.5.2008, WOULD APPLY . 4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF THE AUTHORITIES BELOW. NO DOUBT, TAX EFFECT IS BET WEEN RS. 2 AND RS. 3 LAKHS. AS PER CIRCULAR NO.3 OF 2008 DATED 09 .02.2011 MENTIONED ABOVE, APPEALS BEFORE THIS TRIBUNAL CANNO T BE FILED BY REVENUE IF THE TAX EFFECT IS LESS THAN RS. 3 LAKHS. QUESTION WHETHER THIS CIRCULAR CAN BE APPLIED IN PENDING APPEALS HAS ALREADY BEEN CONSIDERED BY THIS TRIBUNAL IN ITA NOS. ITA NO.1707 /MDS/2010 DATED 4.3.2011. NEVERTHELESS, FOR THE SAKE OF CONVENIENCE AND BREVITY, WE ARE CONSIDERING HEREUNDER THE IMPACT OF SUCH CIRCUL ARS ON PENDING PROCEEDINGS ONCE AGAIN. RELEVANT CIRCULARS ARE GIVE N HEREUNDER: PAGE 3 OF 16 ITA NO. 30/MDS/2011 INSTRUCTION NO.5 OF 2008, DT.15 TH MAY,2008. S UBJEC T : REV ISI ON O F MONETARY LIMITS FOR FILING A PP EA LS BY THE D E PARTM E NT BEFORE I N C OME - TAX APP E LLA TE TRIBUNAL S , HIGH COURTS AND SUPREME COURT - MEASURES FOR REDUCING L ITI GATION - REG . R E F E R E N C E I S I NVIT E D TO BO A R D 'S IN S TRU C T I ON S 1\10 . 1 97 9 DT . 2 7 TH MAR C H , 2000 , NO . 1 9 8 5 DT . 2 9 TH J UN E., 2 000, . (' . 6 OF 2 003 , DT . 1 7TH JULY, 2 0 03, O . 1 9 OF 2 00 3, DT . 2 3 RD D EC ., 2 003, O . C; O F 2004, D T. 2 7 TH M A Y , 200 4 , N O . 2 O F 2 0 05 , DT . 24T H OCT., 2005 [( 2005 ) 1 9 8 C TR ( S T ) 4 1] A ND NO . 5 O F 20 0 7, D T . 16TH J U LY, 2 00 7 [( 20 0 7) 21 0 CT R (ST) 76 ] W H E RE I N M O N ETA RY L I MIT S F O R FI L IN G DE PA R T M E NT A L A P P E A L S (I N INCOM E -T AX MATT E R S) AND OTH E R CONDITI O N S WE R E S P E C IFI E D , F OR F IL I NG APPEA L S B E F O R E AP P E LL AT E T RI BUNAL S, H IGH C OU RT S A ND SU P R E M E C O URT. 2 . IN S UP E R S ESS I ON OF TH E A BOV E IN ST RU C TIO N S , I T HA S B EE N D EC ID E D B Y TH E BOAR D THA T D E P A RTM E N TA L AP P EA L S W ILL B E FIL E D B E F O R E APPELLAT E T RIBUN A L S, HIGH C O URT S AND SUPR E M E CO UR T A S P E R M O N E T A R Y L I M IT S A ND C ON DI TI O N S S P E CIFI E D B E L OW : 3. APPEA L S W I LL H E N CEF OR T H B E F I L E D O NL Y I N C A S E S W H E R E TH E TA X E F F E C T EX C EE D S MON E T A R Y LI M IT S G IVEN HERE UN D E R: SL.NO. APPEALS IN INCOME-TAX MATT ERS MONETARY LIMIT (IN RS) 1. APPEAL BEFORE INCOME-TAX TRIBUNAL 2,00,000 2. APPEAL U/S 260A BEFORE HIGH COURT 4,00,00 0 3. APPEAL BEFORE SUPREME COURT 10, 00,000 4. FOR T H I S PUR P OSE , ' TAX E FF EC T ' M EA N S TH E DIFF E R E N C E B E T W EE N TH E T AX ON T H E T O TA L I N C OM E ASSESSE D A N D TH E TA X T H A T W OULD HA V E B EE N CHARG EABLE H A D S UCH TOT A L I NC OM E B EE N R E D U C E D B Y T HE A MO UNT OF INCOM E I N R E S P E C T OF TH E I S S U E AG A IN S T W H I C H APPEAL I S INT E ND E D T O B E FIL E D ( H E R E AF T ER R E FE RR E D T O A S ' D I S PUT E D I SS U ES ' ). HO WEV E R , T H E T AX W IL L 'LO T I N C LUD E A N Y IN T E R ES T TH E R E ON . S IM I LA R L Y, IN L O SS CA SE S NO T I ONAL T A X E F FEC T S HO U LD B E TAK E N I N T O ACCOU N T . IN TH E CA SE OF P E N A L TY O RD E R S , TH E TA X PAGE 4 OF 16 ITA NO. 30/MDS/2011 E F F EC T W ILL M E A N Q UA N TUM O F PE N A L T Y D E L E T E D OR R E DU CE D IN TH E O RD E R T O B E APP EA L E D AG A IN S T . 5. TH E A SSESS IN G O F FI C E R S H A L L CA L CU L A T E TH E T A X E F F E CT S E P AR A TE L Y F O R E V E RY A SSESS M E NT Y E A R IN RE S PEC T O F T H E DI S P U T E D I S S U E I N T HE CA S E O F E V E R Y ASSESSEE. IF, I N T H E CASE O F A N ASSESSEE, TH E DI S P U T E D I SS U E S A R I S E I N MOR E TH A N O N E A SSESS M E NT Y E A R , A PP E A L S HA L L B E F IL E D IN R ES P E C T O F S UCH A SSES S ME NT Y EA R O R Y EA R S I N W H I C H T H E TAX E FF EC T IN R ES P EC T O F TH E D I S P U T E D I SS U E EXCEE D S TH E MO N ETAR Y LIMIT S PEC IFI E D IN PA R A 3 . 'I APP EA L S H A LL B E FIL E D I N R E S P E C T O F A N A SSESS M E N T Y E A R OR YEA R S IN W HI C H T H E T A X EFF E CT I S L ES S TH A N T H E MON E T ARY LIM IT S PECIFI E D IN P A RA 3 . IN O T H E R W ORD S , HE N CE F O RT H , A PP EA L S W ILL B E FIL E D O NLY W I T H R E F E R ENCE T O THE TA X E FF EC T I N TH E R E L E V A N T ASSESS M E NT YEA R . H OW E V E R , I N C ASE OF A C OMP OS I TE OR D E R OF A N Y HIGH COURT OR A PP E LL A T E A UTH OR IT Y, W H I C H I N VO L VES M O RE TH A N O N E Y E A R , A P PE AL S HA L L B E FI L E D I N RE S PE CT OF A LL A SSESS M E NT Y EA R S E V E N IF TH E 'TAX E FF EC T ' I S L ESS T H A N T H E PR E SC R I B E D M O N E T ARY L I M I TS IN A N Y O F T H E Y EA R (S), I F I T I S DEC ID E D TO FI L E A PP E A L IN R ES P E C T O F TH E YEAR( S) IN W H I C H ' TAX E FF ECT ' EX CEE D S T H E MON E T A RY LIM IT PRE SC RIB E D. 6. IN A CASE WHERE APPEAL BEFORE A TRIBUNAL OR COUR T IS NOT FILED ONLY ON ACCOUNT OF THE TAX EFFECT BEING LESS THAN THE MO NETARY LIMIT PRESCRIBED ABOVE, THE CIT SHALL SPECIFICALLY RECORD THAT EVASION THOUGH THE DECISION IS NOT ACCEPTABLE, APPEAL IS NO T BEING FILED ONLY ON THE CONSIDERATION THAT THE TAX EFFECT IS LESS TH AN THE MONETARY LIMIT SPECIFIED IN THIS INSTRUCTION. FURTHER, IN SUCH CA SES, THERE WILL BE NO PRESUMPTION THAT THE INCOME-TAX DEPARTMENT HAS ACQU IESCED IN THE DECISION ON THE DISPUTED ISSUES. THE INCOME-TAX DEP ARTMENT SHALL NOT BE PRECLUDED FROM FILING AN APPEAL AGAINST THE DISPUTED ISSUES IN THE CASE OF THE SAME ASSESSEE FOR ANY OTHER ASSESSM ENT YEAR, OR IN THE CASE OF ANY OTHER ASSESSEE FOR THE SAME OR ANY OTHER ASSESSMENT YEAR, IF THE TAX EFFECT EXCEEDS THE SPEC IFIED MONETARY LIMITS. 7 . I N T H E P AS T , A NUM B E R OF I N S T A NC E S H A V E C OM E T O TH E NOT I CE OF TH E BO A RD, W H E R E B Y A S A SSESSEE H AS C L A I M E D R E LI E F FR O M T H E T RIBUN A L O R TH E C OURT ON L Y O N TH E G R O UND TH A T TH E D E P A RTM E NT HA S I MP LI C I T L Y ACCE PT E D T H E D EC I S I O N O F T H E T RI BU N A L OR CO URT IN TH E CAS E O F T H E AS S ESSE E F O R ANY O TH E R A SS ESS M E N T YEA R O R IN T H E C A SE OF ANY OTH E R A SS E SS EE FOR T H E S A M E OR A NY O TH E R A SSESS M E N T Y EA R, BY T F IL I NG A N A PP E A L O N TH E SA M E DI S P U T E D I SS U ES. T H E PAGE 5 OF 16 ITA NO. 30/MDS/2011 D EPA RTM E N TA L R EP R ESE NT A T I V ES/CO U N SE L M U S T MAKE E V ER Y E FF O RT TO BRING T O TH E NOTICE O F TH E T RI B U NA L O R T H E CO UR T TH A T TH E A PP EA L I N S U C H C A SES WAS NOT F IL E D O R NOT A DM I TT E D ON L Y BY R EASON OF T H E TA X E F FEC T B E ING L ESS THAN T H E S P E C IF I E D M O N E T ARY LI M I T A ND T H E R E FOR E , I NF E R E N CE S H O UL D B E D RAWN TH A T T H E D EC I S I O N S R E N DE R E D TH E R E I N WE R E ACCE P T AB L E T O TH E D E P A RTM E NT . A CCO RDI NGLY , TH E Y S H O UL D IMP R ESS U PO N T H E T R I B U N A L O R TH E CO UR T T HA T S U C H CA SE S D O NOT HAV E ANY P R ECEDE N T VA LU E . 8. ADVERSE JUDGMENTS RELATING TO THE FOLLOWING SHOU LD BE CONTESTED IRRESPECTIVE OF THE TAX EFFECT: (A) WHERE THE CONSTITUTIONAL VALIDITY OF THE PROVI SION OF AN ACT OR RULE ARE ;UNDER CHALLENGE. ( B) W H E R E BOA RD ' S OR D E R , NO T IFIC A TIO N , I N S T R U C TION O F CIRCULAR H A S B EE N H E LD TO B E I LL E G A L O F U LTR A VI R ES. (C) WHERE REVENUE AUDIT OBJECTION IN THE CASE HAS B EEN ACCEPTED BY THE DEPARTMENT. 9. THE P R O P OSA L F O R FI L I N G S P E C I A L L EA V E P E T I T I O N UN D E R A RTI C L E 1 36 OF T H E C ON S TI T U T I O N B E F O R E T H E SUPREME CO U R T S HO ULD IN A L L CASES , B E SE N T T O T H E D I R E CTO R A T E O F IN CO M E - TA X ( L E GA L & R ESEA R C H ) N E W DEL HI AND TH E D EC I S I O N TO F I L E S P E C I A L L EAVE P E TITION S H A L L B E I N C ON S ULTATI ON W I TH T H E MI NI S T RY OF L AW A N D J U S TI CE . 10. THE MONETARY LIMITS SPECIFIED IN PARA 3 ABOVE W ILL NOT APPLY TO WRIT MATTERS. 1 1 . T HI S IN S T R U C T I O N W IL L A PP L Y TO A PP E A L S F I L E D ON O R A FT E R 1 5 T H O F M A Y , 2 00 8. HO WEVE R , T HE CASES WHERE A PP EA L S H AV E B EE N F IL E D BE FO R E 1 5 T H O F M AY, 200 8 W I LL B E G OV E RN E D B Y T H E I N S TR U C T I O N S ON TH I S S U B J E CT, OP E R A TIV E A T T HE TIM E W H E N S U C H A P P E AL WA S F IL E D . 12. THIS ISSUES UNDER SECTION 268A(1) OF THE INCOME -TAX ACT, 1961. PAGE 6 OF 16 ITA NO. 30/MDS/2011 INSTRUCTION NO.3/2011[F.NO.279/MISC.142/2007-ITJ], DATED 9-2-2011. R E F E R E N CE I S IN V IT E D TO B OA RD' S IN ST RU C TI O N NO. 5 / 2 008 D A T E D 1 5 - 5 - 2 00 8 W H E R EI N M O N ETA R Y LIMIT S A ND O TH E R CO NDITION S FO R F ILIN G D E P A RTM E NT A L A PP EA L S ( IN IN CO M E -TA X M A T TE R S) B EFO R E A PP E LL A T E T RIBUN A L , HI G H CO URT S A ND S UPR E M E CO URT WE R E S P EC I F I E D. 2. IN S UP ERSESS I O N OF TH E A B OVE I N S TRU C TI O N , IT H AS B EE N D EC ID E D BY TH E B OA RD T H A T D E P A R T M E N TA L A PP E AL S M AY B E F IL E D O N M E RIT S BEF O R E A PP E LL ATE T RIBUN A L , HI G H CO UR TS A ND S UPR E M E CO URT KE E PIN G IN V I EW TH E M O NETAR Y LIMIT S A ND CO NDITI O N S S P EC IFI E D B E L OW . 3 . H E N CE F O RTH A PPEA L S S H A LL N O T B E FIL E D IN C AS E S W HER E THE T AX EF F EC T D OES N O T E XCEE D TH E M O N E T A R Y LIMIT S G IVEN H E R E UND E R :- S. A PP EA L S IN IN CO M E - T AX M A TT E R S M O NET A R Y LIMIT ( IN R S. ) I . A PP E AL B E FOR E APPELL A T E TRIBUNAL 3, 00 , 000 2 . A PP EA L U /S 260A B E FOR E HI G H COURT 10 , 00 , 000 3. A PP EA L BEF O RE S UP RE M E CO URT 2 5 , 00 , 000 PAGE 7 OF 16 ITA NO. 30/MDS/2011 IT I S C L A R IF I E D T H AT AN A PP EA L S H O ULD N O T B E FIL E D M E R E L Y B ECA U SE TH E T AX EFFEC T IN A CASE EXCEE D S T H E M O N E T ARY LI M I TS P R ESC RI BE D A B OVE . F ILIN G OF A PP EA L IN S U C H CASES IS TO BE D EC I DE D O N MER I TS OF TH E CASE. 4. FO R T HI S PUR POSE, 'TAX EFFEC T ' M EA N S TH E DI F F E R E N CE B E T WEE N TH E TAX O N TH E T O T A L IN CO M E ASSESSE D A ND TH E T AX TH A T WO ULD H AVE B EE N C H A R G E A BL E H A D S U C H T O T A L IN CO M E B EE N RED U CED BY T H E A M O UNT OF IN CO M E IN R ES P EC T OF TH E I SS U ES AGAI N ST W HI C H A PP EA L I S IN TE ND E D TO BE F IL E D ( H ERE IN AF T E R R EFE RR E D T O AS ' DI S PUT E D I SS U ES ' ). H OWEVE R TH E TAX W ILL N O T IN C LUD E A N Y INT E R ES T TH EREO N , EXCE PT W H E R E C H A R GEA B I LIT Y O F INT E R ES T I T SE L F I S IN DI S PUT E. IN CASE TH E C H A R GEA BILIT Y OF INT E RE S T I S TH E I SS U E UND E R DI S PUTE , TH E A M O UNT OF INT E R ES T S H A LL B E TH E T AX EF F ECT . IN CASES W H E RE R E TURN E D L OSS I S R E DU CE D OR ASS E SSE D AS IN CO M E, TH E T AX EFFEC T WO ULD IN C LUD E N O TI O N A L T AX ON DI S PUT E D A DDITI O N S. IN C AS E OF P E N A LT Y O RD E R S, TH E T AX EFFEC T W ILL M EA N QU A NTUM O F PEN A LT Y D E L E T E D O R R E DU C ED IN TH E ORD E R T O B E A PP EA L E D A G AIN S T . 5. T H E ASSESS IN G OFFIC E R S H A LL CA LCUL A T E TH E T AX E FF E CT SE P A R A T E L Y F O R E V E R Y ASSESS M E NT YEA R IN R ES P EC T O F THE DI S PUT E D I SS U ES IN TH E C ASE O F E V E R Y ASSESSEE . IF , IN TH E CASE OF A N ASSESSEE, TH E DI S PUTED I SS U ES A RI SE IN M O R E THAN O N E ASSESS M E NT YEA R , A PPE A L , CA N B E F IL E D IN R ES P EC T OF S U C H ASSESS M E NT YEA R O R YEA R S IN W HI C H T H E T AX EF F EC T IN R ES P EC T OF T H E D I SP U TE D ISS U ES EXCE ED S TH E M O N E T A R Y LIMIT S P EC IFI E D IN P A R A 3 . NO A PP EA L S H A LL B E F IL E D IN R ES P ECT OF AN ASSESS M E NT YEAR OR YEA R S I N W HI C H TH E T AX EF F EC T I S L ESS TH A N TH E PAGE 8 OF 16 ITA NO. 30/MDS/2011 M O N ETA R Y LIMI T S P EC I F I E D IN P A R A 3. IN O TH E R WO RD S, H E N CE F ORT H , A PP EA L S CA N B E FIL E D O NL Y WIT H R EFE R E N CE T O TH E T A X EFFEC T IN T H E R E L EVA NT ASSESS M E NT YEA R . HOWEVER, I N CASE OF A CO MP OSI T E OR D E R OF AN Y HI G H CO UR T OR A PP E LL ATE A U T H O RI TY, W HI C H I N VO L VES M ORE TH A N O N E ASSESS M E N T YEA R A ND CO MM O N ISS U ES I N M O R E TH A N O N E ASSESS M E NT YEA R , A PP EA L S H A LL BE F IL ED IN R ES P ECT OF A LL S U C H ASSESS M E N T YEA R S EVE N IF T H E 'TAX EFFECT' I S L ESS TH A N T H E P RESC RIB E D M O N E T A R Y LIM I T S IN A N Y OF TH E YEA R (S), I F IT I S D ECI D E D TO F IL E A PP EA L I N R ES P EC T OF T H E YEA R (S) IN W HI C H ' T AX EFFEC T ' EXCEE D S TH E M O N E T A R Y LIM I T PR ESC RIB E D . IN CASE W H ERE A CO MP OS IT E O RD E R / J UD G M E NT IN VO L VES M O R E TH A N O N E A SSESSEE, EAC H ASSESSEE S H A LL B E DEA L T W ITH SE P A R A T E L Y. 6 . IN A CASE W H E R E A PP EA L B E F O R E A T RIBUN AL O R A CO URT I S N O T F IL E D O NL Y O N ACCO UN T OF TH E TAX EFFEC T BE IN G L ESS TH AN TH E M O N E T ARY LIM I T S P EC I F I E D A B OVE , T H E CO MMI SSIO N E R OF I NCO M E -T AX S HALL S P EC IFI C ALL Y R ECO RD TH AT 'E V E N TH O U G H TH E D EC I S I O N I S N O T ACCE PT A BL E, AP P EA L I S N O T B E IN G FI L E D O NL Y O N THE CO N S ID E R A TI O N TH AT T H E TAX EFFEC T I S L ESS TH A N TH E MO N E T ARY LIMIT S P EC IFI E D IN THI S IN S TRU C TI O N '. F URTH E R , IN S U C H C ASES, TH E R E W ILL B E N O PR ES UMP T I O N TH A T TH E IN CO M E -T AX D E PARTM E NT H AS AC QUI ESCE D IN TH E D EC I S I O N O N TH E D IS PU TE D ISS U ES . T H E IN CO M E - T AX D E P A RTM E NT S H A LL N O T B E P REC LUD E D FR O M FI LIN G A N A PP EA L AGAI N S T T H E DI SP U TE D I SS U ES IN TH E CASE OF TH E SA M E ASSESSEE FO R A N Y O TH E R ASSESS M E NT YEA R , O R I N TH E CASE OF A N Y O TH E R ASSESSEE F O R TH E SA M E O R A N Y O TH E R ASSESS M E N T YEA R , IF TH E T AX EFFECT EXCEE D S T H E S P ECI FI E D M O N E T A R Y LIMIT S. PAGE 9 OF 16 ITA NO. 30/MDS/2011 7. IN T H E PAST , A NUM BER OF IN S T A N CES H AVE CO M E T O TH E N O TI CE OF TH E B OA R D, W H EREBY A N ASSESSEE H AS C L A IM E D R E LI E F FR O M TH E TRIBUN A L O R TH E CO UR T O NL Y O N THE G R O UND TH AT T H E DE P AR TM E NT H AS IMPLI C ITL Y A C C EPTED TH E D EC I S I O N OF TH E T RIBUN A L O R CO UR T IN TH E CASE OF T H E ASSESSEE FO R A N Y O TH E R ASSESS M E NT YEA R O R I N TH E CASE O F A N Y O TH ER ASSESSEE FOR T H E SA M E O R A N Y O TH E R ASSESS M E N T YEA R , B Y N O T FILIN G A N A PP EA L O N TH E SA M E DI S PUT E D I SS U ES . T H E D E P AR TM E N TA L RE PR ES ENT A TI V E S / CO UN SE L S MU S T M A K E EVE R Y EFFO RT T O B R IN G TO T H E N O TI CE OF TH E T RIBUN A L OR TH E CO U R T TH AT TH E A PP EA L IN S U C H CAS E S WAS N O T FIL E D O R N O T A DMITT E D O NL Y F O R TH E R EASO N OF TH E T AX EF F ECT BE IN G L ESS TH A N TH E S P EC IFI E D M O N E T A R Y LIMI T A ND , T H E R EFORE, N O IN FE R E N CE S H O ULD BE DR AW N TH A T TH E D EC I S I O N S R E N DE R E D TH E R E IN WE R E ACCEPTA BL E T O TH E D E P AR TM E NT. ACCOR DIN G L Y, TH EY S H O ULD IMP RESS UP O N TH E T RIBUN A L O R TH E CO U R T T H A T S U C H CASES D O N O T H AVE A N Y PR ECE D E NT V A LU E . AS TH E EV ID E N CE OF N OT FI LIN G A PP EA L D U E T O THI S I N S T R U C TI O N M AY H AVE T O B E PR O DU CE D IN CO URT S, T H E J UDI C I A L FO LD E R S IN T H E OFFICE OF C I T MU S T B E M A INTAIN E D IN A SYS T E MI C M A NN E R FO R E ASY R E TRI EVA L. 8. A D VE R SE J UD G M E NT S R E L A TIN G TO TH E FO LL OW IN G I SS U ES S H O ULD B E CO NT ES T E D O N M ER IT S N OTW ITH S T A NDIN G TH A T TH E T AX EFFEC T E NT A IL E D I S L ESS THAN TH E M O N E T A R Y LIMIT S S P ECIFIE D IN PA R A 3 A B OVE O R TH E R E I S N O T AX EFFE CT. (A) W H E R E TH E CO N S TITUT IO N A L VA LIDIT Y OF TH E PR OV I S I O N S OF A N AC T O R RUL E A R E UND ER C H A LL E N GE , O R PAGE 10 OF 16 ITA NO. 30/MDS/2011 (B) W H ERE BOAR D 'S O RD E R , NO TIFI C ATI O N , IN S TRUCTI O N O R C IR C UL A R H AS B EE N H E LD T O BE ILL EGA L O R U LTR A VI R ES, OR (C) W H E R E R EVE NU E A UDIT O BJ EC TI O N I N TH E CASE H AS B EE N ACCE PT E D B Y TH E D EPAR TM E N T . 9. T H E PR OPOSA L FO R FILIN G S P ECIA L LEAVE PE TITI O N UND ER A RTICLE 13 6 OF TH E CO N S TI T UT ION BEFO R E T H E S U P R E M E CO UR T S H O ULD , I N A LL C A SES , B E SE NT T O THE DIR EC T ORA T E OF IN CO M E -T A X (LEGA L & R ESEARC H ), NEW D E LHI AND THE D EC I S I O N T O FIL E S P EC I A L L EAVE P E TITI O N S H A LL B E IN CO N S U L T AT I O N W ITH TH E MIN IST R Y OF LAW AND JU S TI CE . 10. T H E M O N E T ARY LIMIT S S P ECIF I E D IN P A R A 3 A B OVE S H A LL N OT A PPL Y TO W RIT M AT T E R S A ND D I REC T T AX M A TT E R S O TH E R TH A N IN CO M E -T AX, FILIN G O F A PP EA L S I N O TH E R DIR EC T T AX M A TT ERS S H A LL CO NTINU E T O B E GOVER N E D B Y R E L EVA NT PR OV I S I O N S OF S T A TUT E A ND RUL ES. F UR T H E R , F ILIN G OF A PP EA L IN CASES O F IN CO M E -TA X , W H E R E T H E T AX EF F ECT I S N OT QU A NTIFI A BL E OR N O T INVO L VE D , S U C H AS TH E CASE OF R EG I S TR AT I O N OF T RU S T S O R IN S TITUTI O N S UND E R SEC TI O N 1 2A OF TH E I T ACT , 1 96 1 , S H A LL N O T B E GOVE RN E D B Y TH E LIM I T S S P EC I FIE D IN P A R A 3 A B OVE A ND D ECISIO N TO F IL E APPEA L IN S U C H CASES M AY B E T AKE N O N M E R I T S OF A P ART I C UL A R CASE. 11. T HI S IN S TRU CT I O N W IL L A PPL Y T O A PP E AL S FIL E D O N O R A FTE R 9 TH FEBRUARY, 2011. H OWEVER, T H E CASES W H E R E A PP EA L S HA VE B EE N FIL E D BEF O R E 9 TH JANUARY 2011 I W ILL B E GO V E RN E D B Y TH E IN S TRU C TI O N S O N THI S S UBJ EC T , O P E R A TI VE A T TH E TIM E W H E N S U C H APP E AL WAS F IL E D . 12. THIS ISSUES UNDER SEC. 268A(1) OF THE INCOME-TA X ACT, 11961. PAGE 11 OF 16 ITA NO. 30/MDS/2011 5. IT CAN BE SEEN THAT BOTH THE ABOVE SAID INSTRUCT IONS CARRIED SIMILAR CLAUSE NO.11. THE WORDINGS BEING SAME EXCEP T FOR THE DATES. WHEREAS IN INSTRUCTION NO.5 OF 2008 THE DATE MENTIO NED WAS 15-05- 2008, IN INSTRUCTION NO.3 OF 2011 DATE MENTIONED IS 09-02-2011. ADMITTEDLY, APPEAL HERE HAS BEEN FILED BY THE REVEN UE 09-02-2011 AND AFTER 15-05-2008. THE QUESTION AS TO WHICH INST RUCTION WOULD APPLY IS AN ISSUE WHICH IN OUR OPINION RESOLVED BY THE DECISION OF THE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS . S. SUMATHI (317 ITR 422). ONE OF THE QUESTIONS RAISED BY THE REVENU E IN THE SAID APPEAL IS REPRODUCED HEREUNDER: WHETHER, ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE TRIBUNAL WAS RIGHT IN REJECTING ;THE REVENUES APPLICATION FOR RECTIFICATION OF ITS APPELLATE ORDER FOR THE ASST. YR. 1994-95 ( IN RESPECT OF TAX CASE NO.258 OF 2005) 1995-96 (IN RES PECT OF TAX CASE NO.259 OF 2005) IN THE ASSESSEES OWN CASE WHEREIN THE TRIBUNAL HAS SUMMARILY DISMISSED THE REVENUES APPEAL ON THE GROUND THAT THE MONETARY LIMIT WAS LESS THAN `1 ,00,000 WHEREAS AT THE TIME OF FILING APPEAL ON 3 RD MARCH, 2000, THE MONETARY LIMIT WAS ONLY `25,000 AS PER INSTRUCTION NO.1777 OF THE BOARD DT. 4TH NOV. 1987? PAGE 12 OF 16 ITA NO. 30/MDS/2011 6. IT WAS HELD BY THE HONBLE JURISDICTIONAL HIGH C OURT IN PARAS 5 TO 8 AS UNDER: 5 . A I SS U E S IMI L AR T O TH E I S S U E I N T HI S CA S E CAM E UP FOR CONSI D E RA T I ON B E FOR E A D I V I S I ON BE N C H O F THI S CO U R T IN TH E C A S E O F CWT VS . S. A NN A M A LAI (S UPR A ) W H E R E IN I T WAS H E L D TH A T IN O RD E R T O R E DU CE T H E LITIGATION F O R F ILING D E PARTM E NTAL A P P EA L S/ R E F E R E NC ES B E FOR E T H E T RIBUNA L , H I G H C OURT S A ND T H E S UPR E M E COURT , TH E CB DT , BY C I R CULAR F . N O . 2 7 9/1 2 6/ 1 9 9 8 -IT , DT. 2 7T H M A R C H , 2 0 00 , R EF I XE D T H E R RY IRS , H OWEVE R , CAS T I NG OUT CE RT AI N EXCEP TI O N S. T H E EXCEP TI ONS S TAT E D AR E ( I ) WH E RE THE REVE NU E A UDI T O BJ EC T I O N IN T H E CA SE HA S B EE N A C CE P TE D B Y T H E D E PAR T M E N T, ( II ) W H ER E T HE BOAR D 'S O R DE R , NOT I FI C AT I O N , I N STRUC TI O N O R CI R CU L A R IS T H E SUBJ E CT - MATT E R O F AN ADV E R SE ORD E R, (III ) WH E RE PROSEC UT I O N PROCEED IN G S A R E C O N TE M P L AT E D AG A I N S T TH E A S SES SEE , A N D ( IV) W H E R E TH E C O N ST I TUT I O N A L VA LID I TY OF TH E PRO V I S ION S O F TH E A C T A R E UND E R C H A L L E N GE . 6 . TH E REVENU E H AD NOT MADE O U T A CA S E T HAT T H E I SS U E I NVO L VE D IN TH E APP EA L B E FOR E T H E T R I B U NA L FA LL S WI THIN THE E XCEPTIONS PRO VI DE D I N T HE C IR C UL AR . 7. I T MAY B E NOTED T H A T T HIS CO UR T CO N SI D E R ED A PAGE 13 OF 16 ITA NO. 30/MDS/2011 S IMI L A R I SS U E I N T H E CA S E O F C I T V S . AS S OCIAT E D E L EC TR I C A L AG E N C I ES ( 200 8) 214 CT R ( M A D ) 5 1 8 : (2 00 7 ) 29 5 I T R 4 96 ( M AD) W H E R E IN THI S C OURT H E L D AS FO LL OW S ( P . 5 0 0) : 'WE A R E O F T H E CO N S I D E R E D VIEW T H A T N ONE OF TH E EX C E PTION S S T A T E D I N T H E CIRCU L AR ARE APPL I CABL E TO TH E F AC T S OF T H E PR ESE NT C ASE. T H E C IR C U LA R WAS S T A T E D TO B E I SS U ED BY I N VOK I NG THE STATUTORY P OW ER UND E R S. 1 1 9 O F T H E I T AC T. T H E APPEAL I S FIL E D UND E R SECTION . 2 60 A OF THE IT A C T. I T I S W E L L SE TTL E D PRINC IPL E OF LA W THAT EAC H A N D E V E R Y PR OV I SI ON OF A ST ATUT E H A S T O B E GIV E N TH E S A M E IM P O R TANCE. ON E P R OV I S ION CA NN OT B E E L E V ATE D T O A HI G H E R P E D ES T A L T H AN TH E OTH E R P R OV I S I ON, O F CO UR SE , UNL ESS OR O TH E RW I SE S P ECI F I CA LL Y S T A T E D E ITH E R IN T H E SC H E M E, TH E AC T O R IN TH E P R OV I S I O N I T SE LF TH A T A P A R T I C UL A R P R OV I S ION I S S UB JECT E D TO OR Q U A L IF I ED BY ANY O T HE R P R OV I S ION OR T H E P ROV I S I O N CA N B E GIV E N EFF E CT T O NO T W ITH S TANDING A N YTHING C O NT A I N E D I N A NY OTHE R P R OV I S I O N S BY ASS I GNI N G OV E R R I D IN G E F F E C T . H E NC E, T HE C ONT E NT I ON THAT NOT W I TH S T A ND ING T H E CIRC U LAR, W H I C H W A S I SS U ED UND ER S . 119 OF T H E I T A CT , TH E A PP EA L COULD B E F I L E D B Y T H E REVE NU E U ND ER S. 2 6 0 A H A S TO BE R E J EC T E D F OR T H E R E A S ON TH AT I F THE CO NT E NTIO N I S A CC E P TE D , O N E O F T HE S E CT I O N S WO ULD B EC OM E V IRTU A LL Y OTIO SE A N D TH AT CA N NO T B E T H E I NT E N TI O N O F TH E L AW MAK E R S . ' PAGE 14 OF 16 ITA NO. 30/MDS/2011 8. THU S, FO LL OWI N G TH E L O NG L I N E OF CA S E LA W R EP ORT ED IN CI T V S . RAJA S T H A N PATR I KA LTD. (2 00 2) 1 7 8 C T R ( RAJ) 4 1 4 : (2 0 0 2 ) 2 58 I T R 3 0 0 ( RAJ ), P . S .T.S . THI RU VIRATHNAM & SO N S ( 2 00 4 ) 1 8 6 C T R ( MAD ) 400 : ( 200 3) 2 6 1 I T R 4 06 ( M AD), T O W H IC H ONE O F US IS A P A RTY (K . RA V I R A J A PA N D I A N J .) , CI T VS . DIG V IJAY S INGH (2 007) 2 13 C T R (M P ) 4 90 : ( 2 007 ) 2 9 2 IT R 3 14 ( MP ) AND C IT V S. C AM CO CO L O U R C O. (2 00 2 ) 173 C T R ( BOM ) 2 5 5 : ( 2 00 2) 2 5 4 I T R 5 6 5 ( 80M ), THI S C OU R T H E LD TH A T TH E UNI FO R M LIN E OF J UDI C I A L OPI NI O N I S T H A T IF T HE T AX E FF EC T I S L ESS THAN WH A T I S ST A T E D IN TH E C IRCUL A R , T H E R E VE NU E N EE D NOT AGITA T E TH E I SS U E O N A PP EA L AND T HAT TH E C IR C U LAR I S BI N DING ON TH E REVE NU E . 7. IN VIEW OF THE ABOVE REFERRED DECISION OF THE JU RISDICTIONAL HIGH COURT, INSTRUCTIONS PRESCRIBING THE MONETARY L IMIT OF TAX EFFECT FOR FILING APPEALS WOULD APPLY FOR ALL PENDING APPE ALS AS WELL. WE ARE FORTIFIED IN TAKING THIS VIEW BY THE DECISION O F HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT VS. ABHINASH GUPTA (327 ITR 61). THERE CONTENTION RAISED BY THE REVENUE IS THAT CIRCULAR NO.5 OF 2008 DATED 15-05-2008 WAS NOT APPLICABLE TO APPEALS FILED PRIOR TO PAGE 15 OF 16 ITA NO. 30/MDS/2011 THAT DATE. IT WAS HELD BY THEIR LORDSHIPS THAT THE CIRCULAR WAS APPLICABLE TO APPEALS WHICH WERE PENDING BEFORE THE COURT EITHER FOR ADMISSION OR FOR FINAL DISPOSAL, ON THE DATE OF THE CIRCULAR AND THE SAME WAS BINDING ON THE REVENUE. IN TAKING THIS VIEW, HONBLE P&B HIGH COURT RELIED ON THE DECISION OF HONBLE BO MBAY HIGH COURT IN THE CASE OF CIT VS. MADHUKAR K. INAMDAR (318 ITR 141), WHERE ALSO THE SAME ISSUE WAS AGITATED BY THE REVENUE. W E ARE, THEREFORE, OF THE OPINION THAT INSTRUCTION NO.3/201 1 DATED 09-02- 2011 WOULD ALSO APPLY FOR PENDING APPEALS BEFORE TH IS TRIBUNAL. MONETARY LIMIT FOR FILING APPEAL BEFORE THIS TRIBUN AL AS PER INSTRUCTION NO.3/2011 DATED 09-02-2011 IS RS. 3 LAK HS. HERE, AS ALREADY NOTED BY US, THE TAX EFFECT IS LESS THAN RS . 3 LAKHS. THERE IS NO CASE FOR THE REVENUE THAT THIS APPEAL FELL IN AN Y OF THE EXCEPTIONS MENTIONED IN THE CIRCULAR. THEREFORE, TH E APPEAL IS NOT MAINTAINABLE. SINCE THE APPEAL HAS BEEN DISMISSED F OR MONETARY LIMITS, BEING LESS THAN STIPULATED TAX EFFECT, WE A RE NOT GOING INTO THE MERITS. PAGE 16 OF 16 ITA NO. 30/MDS/2011 8. IN THE RESULT, THIS APPEAL OF THE REVENUE STANDS DISMISSED. PRONOUNCED IN THE OPEN COURT ON 30 TH MARCH 2011. (GEORGE MATHAN ) (ABRAHAM P. GEORGE) JUDICIAL MEMBER ACCOUNTANT MEMBER CHENNAI, DATED THE 30 TH MARCH, 2011. VL/ COPY TO: ASSESSEE/AO/CIT (A)/CIT/D.R./GUARD FILE