2015 (5) TMI 179 - AT - Income Tax

Tribunal dismisses Revenue's appeal for not meeting tax threshold, citing CBDT instructions.

The Tribunal dismissed the Revenue's appeal, emphasizing the binding nature of CBDT instructions and Section 268A of the Income Tax Act, 1961. It held ... Maintainability of appeal - Monetary limit - Applicability to pending cases - Held that:- Board's instruction or directions issued to the income-tax authorities are binding on those authorities, therefore, the department ought not to have filed the appeal in view of the above said provisions mentioned in section 268A of the Act since the tax effect in the instant case is less than the amount prescribed for not filing the appeal. - It is noticed that the CBDT has issued Instruction No.5 of 2014 dated 10.07.2014, by which the CBDT has revised the monetary limit to ₹ 4,00,000/- for filing the appeal before the Tribunal. - CBDT Instruction No.5 of 2014 dated 10.07.2014 and also the provisions of Section 268A of Income Tax Act, 1961, we are of the view that the Revenue should not have filed the instant appeal before the Tribunal - instructions issued in the Circulars by CBDT are applicable for pending cases also. Therefore, by keeping in view the ratio laid down in the aforesaid referred to cases [2011 (3) TMI 1488 - High Court of Delhi], we are of the considered view that Instruction No.5/14 dated 10.07.2014 issued by the CBDT are applicable for the pending cases also and in the said instructions, monetary tax limit for not filing the appeal before the ITAT is ₹ 4.00 lakhs. - Decided against Revenue. Issues:1. Interpretation of Section 268A of the Income Tax Act, 1961 regarding monetary limits for filing appeals.2. Applicability of CBDT Instruction No.5 of 2014 dated 10.07.2014 on filing appeals before the Tribunal.3. Whether the Revenue should have filed the appeal before the Tribunal considering the tax effect.Analysis:Issue 1: Interpretation of Section 268AThe judgment discusses Section 268A of the Income Tax Act, 1961, which empowers the Board to issue orders fixing monetary limits for filing appeals by income-tax authorities. It is highlighted that the Board's instructions are binding on the authorities, and failure to comply precludes authorities from filing appeals where the tax effect is below the prescribed limit. The judgment emphasizes the retrospective effect of this provision from 01/04/99.Issue 2: Applicability of CBDT Instruction No.5 of 2014The judgment notes the issuance of CBDT Instruction No.5 of 2014 dated 10.07.2014, which revised the monetary limit for filing appeals before the Tribunal to Rs. 4,00,000. It emphasizes that such instructions, along with Section 268A, dictate that the Revenue should not have filed the appeal in question due to the tax effect falling below the prescribed threshold.Issue 3: Filing of Appeal by the RevenueConsidering the provisions of Section 268A and the CBDT Instruction, the judgment concludes that the Revenue should not have pursued the appeal before the Tribunal. It cites decisions from the Hon'ble Punjab & Haryana High Court and the Hon'ble Delhi High Court to support this stance. The judgment highlights that circulars issued by the CBDT are applicable to pending cases as well, reinforcing the dismissal of the Revenue's appeal without delving into the case's merits.In summary, the judgment interprets Section 268A, emphasizes the applicability of CBDT instructions, and concludes that the Revenue erred in filing the appeal due to the tax effect being below the prescribed limit. Citing relevant legal precedents, the Tribunal dismisses the appeal, aligning with the directives outlined in the statutory provisions and circulars issued by the CBDT.