2011 (2) TMI 1424 - AT - Income Tax

Summary

Issues involved: Interpretation of monetary limit for filing departmental appeal before the Appellate Tribunal and applicability of Board's Instruction u/s 3 lacs.

Interpretation of monetary limit for filing departmental appeal:
The appeal was filed by the Revenue against the order passed by the ld. CIT(A)-31 for the Assessment Year 2005-06. The Ld. Counsel for the assessee pointed out that the monetary limit for filing departmental appeal before the Appellate Tribunal was fixed at Rs. 3 lakhs. The tax effect in the present case was Rs. 2,65,856. The Ld. Departmental Representative objected to this plea, citing a decision and arguing that the Board's Instruction should be applied prospectively and not to pending matters. However, the Ld. Counsel for the assessee relied on decisions of the Bombay High Court to support their argument.

Applicability of Board's Instruction u/s 3 lacs:
The Tribunal heard both parties and distinguished the case cited by the Ld. DR, stating that the saving clause in the circular allows appeals involving substantial questions of law or recurring legal issues to be considered irrespective of monetary limits. The Tribunal found that the case at hand involved a question of law regarding the interpretation of a specific section of the Act, falling under the exception clause of the CBDT Circular. Therefore, the Tribunal dismissed the departmental appeal on the grounds that the tax effect was less than Rs. 3 lakhs, in accordance with Instruction No. 3 dt. 9.2.2011, which was similar to Instruction No. 5 dt. 15.5.2008. The Tribunal applied the ratio of a previous decision to support this dismissal.

Conclusion:
The appeal filed by the Revenue was dismissed by the Tribunal based on the interpretation of the monetary limit for filing departmental appeals before the Appellate Tribunal and the applicability of Board's Instruction u/s 3 lakhs. The decision was pronounced on 28th February 2011.