TaxTMI 
TaxTMI 
2011 (5) TMI 825
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.... that the assessment so framed by the AO inter alia also included the question of interpretation of the CBDT circular on the issue concerned which is equally binding on the Assessing Officer?" 2. By Circular dated 24.10.2005, the Central Board of Direct Taxes laid down certain monetary limits to emphasise upon the Department that if the tax effect of the case was below the monetary limits prescribed in Clause 2 of the said Circular, the Department should not file any appeal. An exception was, however, carved out in the cases covered by paragraph 3 of the said Circular, which reads as under:- (3) "This Board has also decided that cases, where the question of law involved or raised in appeal is/are of recurring nature to be decided by t....
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....(Raj.) has held that the High Court ought not to have dismissed appeal or rejected the reference merely on account of the pecuniary limits fixed with regard to the tax effect. Reference has also been made to the decision of the Supreme Court in CIT v. Hero Cycles (P.) Ltd. [1997] 228 ITR 463/94 Taxman 271 (SC) to the effect that Circulars are not binding on Appellate Authorities, Court, Tribunal or Assessee. However, we may point out that Their Lordships were not considering any question involving interpretation of the Circular issued by the CBDT. Learned senior counsel has further pointed out a decision of the Punjab and Haryana High Court in CIT v. Abhishek Industries Ltd.[2006] 286 ITR 1/156 Taxman 257 (Punj. & Har.). Our attention was, ....
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.... 198 (SC); Ellerman Lines Ltd. v. CIT [1971] 82 ITR 913 (SC) and Varghese (K.P.) v. ITO, (9181). 131 ITR 597 (SC), to contend that the circular issued by the Central Board of Direct Taxes is binding on all the officers and Commissioners and appeal or reference contrary to the instructions issued in the Circular will not be considered by the Courts and the Division Bench of the Bombay High Court was satisfied that the Board has taken a policy decision not to file appeal in a type of case in hand and the same is binding on the Revenue and in the result the appeal was dismissed following the circular. The similar view was taken by the Division Bench of the High Court of M.P. in the case of Assistant Commissioner of Income Tax v. Aradhana Oil M....
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....ned Senior Counsel for the appellant has also invited attention to the decision of the Punjab & Haryana High Court in Rani Paliwal v. CIT [2004] 268 ITR 220/136 Taxman 135 (Punj. & Har.) of Delhi High Court in CIT v. Blaze Advertising (P.) Ltd. [2002] 255 ITR 460/122 Taxman 468 (Del.) and of Madras High Court in CIT v. Kodananad Tea Estates Co. [2005] 275 ITR 244 (Mad.) We are, however, of the view that as held by this Court in CIT v. Suresh Chand Goyal (supra), where tax liability of the assessee is below the monetary limit prescribed, Revenue cannot file an appeal in transgression of the Circular by which it is bound. However, we may add that in a case which falls within the excepted category, it would always be open to the Department to ....