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Issues:
- Appeal against deletion of addition made by Assessing Officer on income earned by assessee from truck plying. - Preliminary issue of tax effect below Rs. 2,00,000 in appeals filed by revenue. - Binding nature of instructions issued by CBDT on income-tax authorities. Analysis: 1. The appeals were filed by the revenue against the orders of CIT (Appeals) for the assessment year 2003-04, challenging the deletion of additions made by the Assessing Officer on income earned by the assessee from truck plying. The income amounts for two different companies were specified in the judgment. 2. The preliminary issue raised was regarding the tax effect in the appeals filed by the revenue being below Rs. 2,00,000. The learned AR argued that as per Circular No. F. 279/Misc.64/05-IT, the revenue should not have appealed to the Tribunal for cases below the specified tax effect limit. The argument was supported by various Tribunal orders and a recent decision of the Hon'ble Supreme Court emphasizing the binding nature of executive instructions. 3. The learned DR, on the other hand, supported the Assessing Officer's order. 4. The Tribunal considered the contentions of both parties regarding the tax effect issue. It was noted that the tax effect in both cases was below Rs. 2,00,000, and the appeals were filed after the issuance of Circular No. F. 279, dated 24-10-2005. Citing the decisions of the Tribunal and the recent Supreme Court judgment, the Tribunal concluded that the appeals should be dismissed based on the binding nature of the circular and the need to avoid unnecessary litigation in small cases. 5. The Tribunal emphasized the importance of the instructions issued by the CBDT to reduce unnecessary litigation in small cases, particularly to assist small assessees facing financial burdens in defending appeals. The circular aimed at advancing the policies laid down by the Central Board of Direct Taxes and reducing the arrears of appeals in courts and Tribunals. Various legal precedents were cited to support the binding nature of such instructions on income-tax authorities. 6. The Tribunal further elaborated on the binding nature of instructions issued by the CBDT on income-tax authorities as per section 119 of the Income-tax Act. It was clarified that such instructions are mandatory for income-tax authorities to follow, except in cases where they interfere with specific discretionary functions. The Tribunal emphasized that the instructions regarding the monetary limit for filing appeals were not in conflict with the authorities' discretion and were therefore binding. 7. Legal precedents were cited, including observations from the Hon'ble Bombay High Court and other cases, supporting the applicability and importance of following CBDT instructions even in older cases with minimal tax impact. The need to reduce the burden on the department and avoid unnecessary litigation in cases with negligible tax effect was highlighted. 8. Considering the above discussions and legal precedents, the Tribunal agreed with the argument that the revenue should not have filed the appeals due to the tax effect being less than the prescribed limit of Rs. 2 lakhs. Consequently, both appeals of the revenue were dismissed.
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