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2017 (3) TMI 1057

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....the orders passed under Section 260A of the Income Tax Act, 1961. 4. In view of the above, we allow the appeals and set aside both the orders dated 25th August, 2010 and 28th March, 2012 passed by the High Court in Tax Appeal No.7 of 2004 and Civil Application (Review) No.26 of 2010 respectively and request the High Court to decide the review petition and thereafter the appeal itself, if so required, on merits. We also make it clear that we have expressed no opinion on the merits of any of the contentions of the parties." 2. The matters are, accordingly, listed today with other connected matter i.e. Civil Application (Review) No.26 of 2010 in Tax Appeal No. 7/2004. Heard Ms. A. Razaq, learned Counsel appearing for the applicant and Mr. S. Singbal, learned Counsel appearing for the respondent, finally. 3. Admit. Learned Counsel appearing for the respondent waives service. Heard forthwith, with the consent of the learned Counsel. 4. The basic event and the back-ground, are as under : On 30/10/2000, the assessee-respondent filed its return of income for Assessment Year 2000-01, with all statutory and other documents/particulars and claimed deduction under Section 10B of the Act t....

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....ness income. On 16th January, 2006, the respondent challenged order dated 8th November, 2005 before the Income Tax Appellate Tribunal, on the grounds mentioned in said appeal. By an order dated 23/02/2006, the Tribunal allowed the appeal accepting the respondent's contention that the depreciation in mining division was optional and interest on bank deposit was business income. Being aggrieved, the appellant (the Revenue Department) filed Tax Appeal No.29/2006 for the Assessment Year 2000-01 before this Court under Section 260A of the Act. By order dated 28/09/2010, this Court disposed of the Tax Appeal as the total amount of liability to tax was Rs. 2,26,062/- and as per the Circular No.5/2008 dated 15/5/2008 of the C.B.D.T. and the decision of the Court in CIT vs. Pithwa Engg. Works, 2005(5) Bom. C.R. 41, the appeals before the High Court were the tax effect is below Rs. 4,00,000/- were not to be pursued. The Division Bench of this Court in CIT Vs. Madhukar K. Inamdar (HUF), while dealing with the CBDT Circular No.5 of 2008 dated 15.5.2008 and its retrospective effect, held that if the tax effect is less than Rs. 4,00,000/- the Department should not file appeals in such cases....

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....o take effective measures for reducing the litigation. The basic clauses of the Circular No.21/2015 are reproduced below : "3. Henceforth, appeals/ SLPs shall not be filed in cases where the tax effect does not exceed the monetary limits given hereunder: - S.No. Appeals in Income-tax matters. Monetary Limit (in Rs.) 1 Before Appellate Tribunal 10,00,000/- 2 Before High Court 20,00,000/- 3 Before Supreme Court 25,00,000/- It is clarified that an appeal should not be filed merely because the tax effect in a case exceeds the monetary limits prescribed above. Filing of appeal in such cases is to be decided on merits of the case. 4. For this purpose, "tax effect" means the difference between the tax on the total income assessed and the tax that would have been chargeable had such total income been reduced by the amount of income in respect of the issues against which appeal is intended to be filed (hereinafter referred to as "disputed issues"). However the tax will not include any interest thereon, except where chargeability of interest itself is in dispute. In case the chargeability of interest is the issue under dispute, the amount of interest shall be the tax effect. ....

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....c., 2015 Circular and to clarify that it would apply retrospectively to govern even pending appeals arose on account of the enormous increase in the number of appeals being filed by the Revenue over the years. ....Therefore, to enable the Revenue to focus on matters where the tax implication is above Rs. 20 lacs only such matters should be agitated in appeal before the High Court according to the circular. This policy of non-filing and of not pressing and/or withdrawing admitted appeals having tax effect of less than Rs. 20 lacs has been specifically declared to be retrospective by the Circular Dt. 10th Dec, 2015. There is no reason why the circular should not apply to pending references where the tax effect is less than Rs. 20 lacs as the objective of the circular would stand fulfilled on its application even to pending references more particularly bearing in mind that there are 1,149 number of references still awaiting disposal by this Court and a large number of them would have tax effect of less than Rs. 20 lakhs. 9. In the above view, we hold that as admittedly, the tax effect is less than Rs. 20 lacs in the present reference application at the instance of the Revenue, the sa....