TaxTMI 
TaxTMI 
2001 (12) TMI 209
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....v) CIT v. Jain Construction Co. [2000] 245 ITR 527 (Raj.) (vi) CST v. Indra Industries [2001] 248 ITR 338 (SC) (vii) Gujarat Gas Co. Ltd. v. Joint CIT [2000] 245 ITR 84 (Guj.) (viii) UTI v. P.K. Unny [2001] 249 ITR 612 (Bom.) (ix) WTO v. Sardar Shivaji Rao Angre 29 ITC 76 (Ind.) (x) Aradhana Oil Mills v. Asstt. CIT [IT Appeal Nos. 439 to 441 (Ind.) of 1996] (xi) WTO v.Prakash Rani Agrawal 29 ITC 344 (xii) Jaikishan Gopikishan & Sons v. CIT[1989] 178 ITR 481 (MP) (xiii) Y.P. Chawla v. M.P. Tiwari [1992] 195 ITR 607 (SC) (xiv) CIT v. T.V. Ramanaiah & Sons [1986] 157 ITR 300 (AP) and (xv) Collector, Central Excise v. Usha Martin Industries [1977] 7 SCC 47. 3. In opposition, the learned DR submits that instruction No. 1903 has been issued under sub-section (1) of section 119 of the Act which is administrative in nature. Therefore, the assessee cannot be allowed to get it enforced. He submits further that at the most the instructions issued under sub-section (1) of section 119 is the guideline for the officials of the department. The learned DR draws our attention to the provisions laid down under sub-sections (1) and (2) of section 119 of the Act. 3.....
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....lso incorrectly called "circulars" in the Bombay High Court judgment in the case Executors of Late Shri D.T. Udeshi are not at all public circulars meant and notified to the public at large but only instructions for departmental use alone. In a judgment of the Delhi High Court in the case of CIT v. ITAT [1998] 232 ITR 207, it was held that the Tribunal is required to examine if the case is one which does not attract the applicability of the CBDT instructions or is one covered by anyone of the exceptions carved out in the circular itself. The relevant statutory provisions which specifically use the words "orders, instructions and directions" are contained in both sub-sections (1) and (2) of section 119 as comprised in Chapter XIII of the Income-tax Act, 1961, which chapter is titled as 'Income-tax Authorities'. The said section 119 is grouped in Part-A of the said Chapter of which the sub-title is "Appointment and Control" and the title of section 119 itself is "Instructions to subordinate authorities". In sub-section (1) power and jurisdiction is vested in both to issue such orders, instructions and directions to other income-tax authorities as it may deem fit for proper administra....
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....n of penalties. Sub-section (2), however, does not empower the Board expressly in the matter of appeals and revisions as in Chapter XX of the Act or in the matter of appeals to the Appellate Tribunal as in sections 252 to 255 Part-B of the said chapter. Hence, it is very clear that the orders, etc. of the Board cover & the entire Act while section 119(2) does not expressly cover Chapter XX-B containing sections 252 to 255. One more vital difference, as mentioned earlier between sub-sections (1) and (2) of section 119 is that if the Board is of the opinion that it is necessary in the public interest so to do, such order under section 119(2) could be published and circulated in the prescribed manner for general information. In other words, words and expressions like "public circular", "publishing", "Circulars", "general information", "public interest" etc. are within the exclusive domain of section 119(2)(a). Such words are frequently used in judicial pronouncements as "administrative instructions" referable to sub-section (1) on the one hand and "public circulars" referable to subsection (2)(a) on the other. Thus, "publication", "circulation", "in the prescribed manner", "for genera....
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....o distinguish the judgments relied upon by the learned AR and submits that these judgments mainly involve the matters specifically mentioned in section 1 19(2) of the Act and so far as the orders of this Bench are concerned in the case of Sardar Shivaji Rao Angre; in the case of Prakash Rani Agrawal and in the case of Aradhana Oil Mills are of no help as therein the relevant facts and circumstances of the cases have not been examined. 4. After careful consideration of the arguments advanced by the parties we find that the issue raised herein in opposition to the preliminary objection is two fold; firstly as to-"whether the subordinate authorities are bound by the instructions issued under sub-section (1) of section 119 of the Act by the CBDT?" and secondly as to-"whether the assessee can get such instructions enforced against the revenue?" or in other words as to-"whether the instructions issued under sub-section (1) of section 119 have got force of law?" 4.1 It is misconceived by the revenue that we, by entertaining the preliminary objections raised herein by the assessee, are going to restrain or prohibit the right of the CIT to file appeal before the Tribunal having tax ef....
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....osition of penalties and any such order may, if the Board is of the opinion that it is necessary in the public interest so to do, be published and circulated in the prescribed manner for general information; (b) the Board may, if it considers it desirable or expedient so to do for avoiding genuine hardships in any case or class of cases, by general or special order, authorise any income-tax authority, not being a Commissioner (Appeals) to admit an application or claim for any exemption, deduction, refund or any other relief under this Act after the expiry of the period specified by or under this Act for making such application or claim and deal with the same on merits in accordance with law; (c) the Board may, if it considers it desirable or expedient so to do for avoiding genuine hardship in any case or class of cases, by general or special order for reasons to be specified therein, relax any requirement contained in any of the provisions of Chapter ILV or Chapter VI-A where the assessee has failed to comply with any requirement specified in such provision for claiming deduction thereunder, subject to the following conditions, namely:-- (i) the default in complying with s....
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....bsp; 1,50,000 3. The above monetary limits will apply to appeals/references filed after 1-11-1992. The other guidelines as laid down in Board's Instruction No. 1777 dated 4-11-1987 (F.No. 279/110/87-ITJ for computing the tax effect, etc. will continue to be applicable (except with regard to para 3(v)(c) regarding litigation with public sector undertakings for which instructions separately issued vide F.No. 279/22/91-ITJ dated 17-3-1992 will have effect) (F.No. 279/116/92-ITJ dated 28-10-1992 from Central Board of Direct Taxes.)" 4.3 The word "shall" used in sub-section (1) of section 119 suggests the binding nature of the orders, instructions or directions issued by the CBDT upon such authorities and all other persons employed in the execution of....
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....Direct Taxes which binds all the subordinate authorities of the Income-tax Department. The High Court would not ordinarily encourage breach of policy decisions and the Departmental instructions which have a public purpose behind them. Valuable time of High Courts and highly placed Tribunals is not to be wasted on petty matters. However, if the case be not covered by the said instructions or be covered by one of the exceptions carved out in the instructions themselves in that event the denial of reference would be failure to exercise a jurisdiction statutorily vested in the Tribunal. Inasmuch as the Tribunal has not examined the case from that point of view and adequate material is not available before us enabling formation of an opinion either way, we deem the present one to be; an appropriate case which should be sent back to the Tribunal for consideration afresh." 4.6 The Hon'ble Supreme Court in the case of UCO Bank was pleased to hold as......the Board thus has power, inter alia, to tone down the rigour of the law and ensure a fair enforcement of its provisions by issuing circulars in exercise of its statutory powers under section 119 of the Income-tax Act, which are binding....
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....the validity of the instructions issued by the CBDT but to follow it. We thus decide the first issue that the subordinate authorities are bound to follow the instructions issued under section 119 of the Act by the CBDT. 4.8 So far as the second issue is concerned, the main contention of the revenue is that the instructions issued under sub-section (1) of section 119 cannot be called as circular since circular can be issued only under subsection (2) of section 119 and only the circulars confer right on the tax payers. The contention of the revenue remains that the instructions issued under sub-section (1) are in fact internal departmental instructions meant for departmental use only and one of these instructions had concluding para like "It is clarified that the instructions regarding the monetary limit is an internal administrative measure and does not confer any right on the tax payer". To answer this issue, we have to keep in mind the aims and objects behind the issuance of instruction No. 1903 of the Board and also that it is a beneficial power given to the board for proper administration of fiscal law so that undue hardship may not be caused to the assessee and the fiscal la....
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.... that the Commissioner has to exercise his discretion under section 279(2) of the Act in conformity with the instructions issued by the Board from time to time. In this case the Board had issued instruction No. 1317 dated March 11, 1980 under section 119(1) of the Act providing guidelines for the exercise of the power under section 279(2) of the Act. The respondents therein by way of two separate writ petitions challenged the instructions before the Delhi High Court, the High Court allowed the writ petition and quashed the instructions. The other party challenged the decision of the High Court before the Supreme Court. The Hon'ble Supreme Court with the above findings set aside the High Court judgment. On the identical issue in relation to the Central Board of Excise & Customs Circular the Hon'ble Supreme Court in the case of Collector of Central Excise was pleased to hold as under:-- "20. Section 37B of the Act enjoins on the Board a duty to issue such instructions and directions to the excise officers as the Board considers necessary or expedient "for the purpose of uniformity in the classification of excisable goods or with respect to levy of duty excised on such goods". It i....