High Court Of Bombay: Nagpur Bench
CIT vs. Arvind Nilkanth Kedar
Section 256(2)
Asst. Year 1985-86, 1986-87, 1987-88
J.P. Devadhar & B.P. Dharmadhikari, JJ.
IT Appln. Nos. 57, 68 & 69 of 1995
20th April, 2007
Counsel appeared Anand Parchure, for the Applicant : None, for the Respondent
JUDGMENT
J.P. Devadhar, J. :
Heard the learned counsel for applicant. None for the respondents. In all these cases the tax effect in each assessment year is admittedly less than Rs. 30,000 and, therefore, the Tribunal relying upon the decision of this Court in the cases of CWT vs. Executors of Late Shri D.T. Udeshi (1992) 101 CTR (Bom) 290 : (1991) 189 ITR 319 (Bom) and CIT vs. Bhimji Bhanjee & Co. (1983) 35 CTR (Bom) 296 : (1984) 146 ITR 145 (Bom) declined to refer the questions of law raised by the Revenue under s. 256(1) of the IT Act, 1961. It is contended by the Revenue that even though the tax effect in each assessment year is less than Rs. 30,000, as per the Board’s clarificatory Circular dt. 29th June, 2000, where the order of the Tribunal is for more than one assessment year, then cumulative tax effect should be taken into consideration. Accordingly it is submitted by the Revenue that in the present case, the Tribunal in the case of Shri Arvind Kedar has passed a combined order for asst. yrs. 1985-86, 1986-87 and 1987-88 and a combined order in the case of Shri Ajay Kedar for asst. yrs. 1985-86, 1986-87 and 1987-88. The cumulative tax effect in the case of each assessee for asst. yrs. 1985-86, 1986-87 and 1987-88 is more than Rs. 30,000 and, therefore, the Tribunal ought not to have dismissed the applications on the ground that the tax effect is less than Rs. 30,000. Before dealing with the contentions of the Revenue, we may quote the Board’s Instruction No. 1979, dt. 27th March, 2000 as well as clarificatory Instruction No. 1985, dt. 29th June, 2000, which read as under: “Instruction No. 1979, dt. 27th March, 2000 : Subject : Revising monetary limits for filing Departmental appeals/references before Tribunal, High Courts and Supreme Court—Measures for reducing litigation—Regarding. Reference is invited to Board’s Instruction No. 1903, dated 28th Oct., 1992 and Instruction No. 1777, dt. 4th Nov., 1987, wherein monetary limits of Rs. 25,000 for Departmental appeals (in IT matters) before the Tribunal, Rs. 50,000 for filing reference to the High Court and Rs. 1,50,000 for filing appeal to the Supreme Court were laid down.
2. In supersession of the above instruction, it has now been decided by the Board that appeals will be filed only in cases where the tax effect exceeds the revised monetary limits given hereunder : The new monetary limits would apply with reference to each case taken singly. In other words, in group cases, each case should individually satisfy the new monetary limits. The working out of monetary limits will therefore not take into consideration the cumulative revenue effect as envisaged in Board’s earlier Instruction referred to above.
3. Adverse judgments relating to the following should be contested irrespective of revenue effect :
(i) Where Revenue audit objection in the case has been accepted by the Department.
(ii) Where Board’s order, notification, instruction or circular is the subject-matter on an adverse order.
(iii) Where prosecution proceedings are contemplated against the assessee.
(iv) Where the constitutional validity of the provisions of the Act is under challenge. Special Leave Petitions under Art. 136 of the Constitution are filed before the Supreme Court only in consultation with Ministry of Law. Therefore, where the Chief CIT decides to contest an adverse judgment by filing Special Leave Petition before the Supreme Court, they should send the proposal to the Board for further processing. These instruction will apply to litigation under other Direct taxes also e.g. wealth-tax, gift-tax, estate duty, etc. These monetary limits will not apply to writ matters. This Instruction will come into effect from 1st April, 2000. Sd/-Dy. Secretary to the Government of India. Instruction No. 1985, dt. 29th June, 2000 : Subject : Revision of monetary limits for filing Department appeals/reference before various appellate authorities— Clarification in respect of Instruction No. 1979, dated 27th March, 2000— Regarding. Reference is invited to Board’s Instruction No. 1979, dated 27th March, 2000 wherein monetary limits for filing appeals/references before various appellate authorities have been prescribed. Clarification has been sought regarding certain issues discussed in the said instruction. The Board have considered the issues raised and it is clarified that – (1) the monetary limits in the context of each case taken singly would mean each assessment year for each assessee considered in the case of XYZ Limited for asst. yrs. 1995-96 and 1996-97, the monetary limit as prescribed in Instruction No. 1979 would apply taking together the asst. yrs. 1995-96 and 1996-97. (2) even if the issues involved in an appeal under consideration are already pending in appeal before the appellate authorities, all subsequent appeals will not be filed for particular assessment year only as indicated in (i) above, if the tax effect exceeds the prescribed monetary limit. (3) in para 3(iii) of the Instruction, it has been stated that the adverse judgments should be contested irrespective of the revenue effect in a case where prosecution proceedings are contemplated against any assessee. However, it is possible that prosecution proceeding may be contemplated against any assessee on points different from the issues disputed in appeal. For example, case under consideration may relate to assessment order under s. 143(3) whereas the prosecution proceedings may have been initiated on other point like TDS. It is clarified that, the adverse judgment should be contested only if the prosecution proceedings contemplated relates to point under appeal and not on points unrelated to the issues in appeal. (4) This may be brought to the notice of all the officers working under your charge.Sd/Under Secretary to the Government of India.”
On perusal of the aforesaid instructions, it is clear that the monetary limits prescribed by the Board for filing applications under s. 256(2) of the Act are to be considered in each assessee’s case separately and where the Tribunal passes an order for more than one assessment year, then the cumulative tax effect in the order passed by the Tribunal has to be considered. Thus, if the order of the Tribunal is for asst. yrs. 1985-86, 1986-87 and 1987- 88, then the cumulative tax effect in all these three assessment years has to be taken into consideration and if the cumulative tax effect is more than the monetary limit then only the appeals/applications can be filed by the Revenue. In the present case, the appeals filed by the assessee before the Tribunal against the order passed by CIT(A) were allowed on merits. It is the applications filed by the Revenue under s. 256 (1) of the Act that are dismissed by the Tribunal on the ground that the tax effect in each case is less than Rs. 30,000. Even if the cumulative tax effect involved in the order passed by the Tribunal in each assessee’s case exceeds Rs. 1,00,000 and the Tribunal were to forward statement of the case, in the light of the decision of this Court in the case of CIT vs. Pithwa Engg. Works (2005) 197 CTR (Bom) 655 : (2005) 276 ITR 519 (Bom), the reference would be returned unanswered if the cumulative tax effect in each case is less than Rs. 2,00,000. It is not in dispute that the cumulative tax effect involved in the order of the Tribunal in each assessee’s case is less than Rs. 2,00,000. In this view of the matter all the applications are dismissed. Rule discharged. No order as to costs.
[Citation : 294 ITR 419]
