TaxTMI 
TaxTMI 
TaxTMI 
2015 (5) TMI 672
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....me-tax Appellate Tribunal fixing the tax effect limit of Rs. 4 lakhs, the same is not maintainable and liable to be dismissed in limine. The only issue now remains before us is, whether, this appeal of the Revenue, which is below the prescribed limit of tax effect in view of the Board's Instruction No. 5 of 2014 issued on July 10, 2014 revising the monetary limits for filing of appeals by the Department before the Income-tax Appellate Tribunal is maintainable or not. The learned Departmental representative drawn our attention to paragraph 11 of the instruction and argued that this will apply to the appeals filed on or after July 10, 2014 and not to the appeal filed prior to July 10, 2014. Hence, he stated that this instruction is prospective and not retrospective. 4. We have heard the learned Departmental representative and gone through the facts and circumstances of the case. At the outset, it is seen that the hon'ble Delhi High Court in the case of CIT v. P. S. Jain and Co. (in I. T. A. No. 179 of 1991 dated August 2, 2010), [2011] 335 ITR 591 (Delhi) has held as under (page 592) :  ....
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.... Direct Taxes is empowered to issue circulars and instructions from time to time, with regard to filing of appeals depending on the tax effect involved.' Thereafter, in 2008, Central Board of Direct Tax Instruction No. 5 of 2008 dated May 15, 2008 was issued. This court in the case of CIT v. Madhukar K. Inamdar (HUF) [2009] 318 ITR 149 (Bom), interpreted the aforesaid circular. The circular was issued in supersession of all earlier instructions issued by the Board. The monetary limit was increased and appeals were to be filed under section 260A, thereafter, only in cases where the tax effect exceeded Rs. 4 lakhs. Paragraph 11 of that instruction stipulated that it was applicable to appeals filed on or after May 15, 2008. It was further provided that in cases, where appeals were filed before May 15, 2008, they would be governed by the instructions on this subject which were operative at the time when such appeals were filed. The instruction was issued under section 268A(1) of the Act. The argument of learned counsel for the Revenue in that case was, that the instruction issued on May 15, 2008 did not preclude the Department from continuing with the appeals and/or petitions file....
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....nbsp; 10. The new Central Board of Direct Taxes instructions have been issued on February 9, 2011, being Instruction No. 3 of 2011. The monetary limit has been raised again and clause 3 of the instructions provides that appeals shall not be filed in cases where the tax effect does not exceed the monetary limits prescribed, henceforth. The monetary limits prescribed for filing an appeal under section 260A before the High Court has been raised to Rs. 10 lakhs. This instruction is identical to the Central Board of Direct Taxes Instruction No. 5 of 2008. Clause 10 of this circular indicates that monetary limits would not apply to writ matters and direct tax matters other than income tax. It further provides that where the tax effect is not quantifiable, the Department should take a decision to file appeals on merits of each case. Clause 11, again provides that the instruction would apply to appeals filed on or after. . . 2011 and appeals filed before 2011 would be governed by the instructions on this subject, operative at the time when such appeals were filed. 11. In our opinion, when a similar ....
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.... is at liberty to proceed against the assessee in future, if there any amount due from the assessee, on similar issue and if it is above the monetary limit prescribed.'" 5. We find from the above case law of the hon'ble Gujarat High Court in the case of CIT v. Sureshchandra Durgaprasad Khatod (HUF) [2014] 363 ITR 556 (Guj) that in the similar situation and exactly identical instructions were applied to the appeal filed retrospectively. The hon'ble Gujarat High Court has discussed that almost all High Courts are of the unanimous view, considering the main objective of such instructions that to reduce the pending litigation, where the tax effect is considerable low or small, the appeal is not maintainable. The recent instruction revising the monetary limit to Rs. 4 lakh for filing appeal before the Income-tax Appellate Tribunal on Income-tax matters, as issued vide Instruction No. 5 of 2014 F. No. 279/Misc.142/2007- ITJ (Pt) dated July 10, 2014 will apply to pending appeals also for the reason that the same is exactly identical to earlier instructions. The relevant circular issued by the Central Board of Direct Taxes reads as under : ....
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....n which the tax effect in respect of the disputed issues exceeds the monetary limit specified in para 3. No appeal shall be filed in respect of an assessment year or years in which the tax effect is less than the monetary limit specified in para 3. In other words, henceforth, appeals can be filed only with reference to the tax effect in the relevant assessment year. However, in case of a composite order of any High Court or appellate authority, which involves more than one assessment year and common issues in more than one assessment year, appeal shall be filed in respect of all such assessment years even if the 'tax effect' is less than the prescribed monetary limits in any of the year(s), if it is decided to file appeal in respect of the year(s) in which 'tax effect' exceeds the monetary limit prescribed. In case where a composite order/judgment involves more than one assessee, each assessee shall be dealt with separately. 6. In a case where appeal before a Tribunal or a court is not filed only on account of the tax effect being less than the monetary limit specified ....
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....has been held to be illegal or ultra vires, or (c) Where revenue audit objection in the case has been accepted by the Department. 9. The proposal for filing special leave petition under article 136 of the Constitution before the Supreme Court should, in all cases, be sent to the Directorate of Income-tax (Legal and Research), New Delhi and the decision to file special leave petition shall be in consultation with the Ministry of Law and Justice. 10. The monetary limits specified in para 3 above shall not apply to writ matters and direct tax matters other than income tax. Filing of appeals in other direct tax matters shall continue to be governed by the relevant provisions of statute and rules. Further filing of appeal in cases of Income-tax, where the tax effect is not quantifiable or not involved, such as the case of registration of trusts or institutions under section 12A of the Income-tax Act, 1961, shall not be governed by the limits specified in para 3 above and decision to file appeal in such cases may be taken o....