Departmental circulars apply only within their stated limits; remand may be refused where tax effect is negligible and no useful purpose remains.

A departmental circular on gifts to political parties was treated as confined to donations made under a specific clause in a company's memorandum and articles of association, so its wider application to general-company donations was doubtful. The Court also noted that, although the circular may not have applied on that broad basis, it did not see any practical reason to remit the reference for reconsideration of exemption under the Gift-tax Act because the tax effect was small, the circular had been withdrawn, and the issue was unlikely to recur. The Tribunal's order was therefore left undisturbed, and the questions were answered against the Revenue only in a technical sense.

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Issues: (i) Whether the Board circular dated 5 January 1960 applied to donations made by a company to political parties under a general clause in its memorandum and articles of association. (ii) Whether the reference should be remitted for consideration of exemption under section 5(1)(xiv) and section 5(1)(v) of the Gift-tax Act, 1958.

Issue (i): Whether the Board circular dated 5 January 1960 applied to donations made by a company to political parties under a general clause in its memorandum and articles of association.

Analysis: The circular was intended to govern only gifts made by a company to a political party under the authority of a specific clause in the memorandum and articles of association. The factual setting did not clearly answer to that requirement, and the Tribunal's reliance on the circular was therefore open to doubt.

Conclusion: The circular was not applicable on the broad basis accepted by the Tribunal.

Issue (ii): Whether the reference should be remitted for consideration of exemption under section 5(1)(xiv) and section 5(1)(v) of the Gift-tax Act, 1958.

Analysis: Even if the circular did not apply, the Court declined to disturb the Tribunal's order because the tax effect was small, the earlier circular had been withdrawn, and the matter was not likely to recur. In these circumstances, remand was considered unnecessary.

Conclusion: The matter was not remitted and the Tribunal's order was left undisturbed.

Final Conclusion: The questions referred were answered against the Revenue, but only technically, and the assessee retained the benefit of the Tribunal's order.

Ratio Decidendi: A benevolent departmental circular can be applied only within the limits of its own terms, but where the tax effect is negligible and no useful purpose would be served by remand, the Court may decline to disturb the existing order notwithstanding reservations on the merits.

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