2012 (11) TMI 1242 - AT - Income Tax

Summary

Issues involved: Appeal against order allowing provisions claimed by assessee, challenge based on monetary limit for filing departmental appeals, application of CBDT Instructions dated 9.2.2011, dismissal of appeal due to tax effect below Rs. 3 lakhs.

Summary:
The appeal before the Appellate Tribunal ITAT Pune was directed against the order of the CIT(A)-III Pune, which had allowed the provisions claimed by the assessee. The learned Representative for the assessee raised a preliminary objection regarding the monetary limits set by the Central Board of Direct Taxes (CBDT) for filing departmental appeals before the Tribunal. The CBDT Instruction dated 9.2.2011 fixed the monetary limit at Rs. 3 lakhs, below which no appeal shall be filed by the department. The tax effect in this case was below the specified limit, and the departmental appeal was found to be contrary to the CBDT Instructions. A precedent from ITAT Mumbai was cited, and it was held that the appeal should be dismissed based on the CBDT Instructions, even if filed before the Instruction date. The Tribunal referred to previous judgments and dismissed the departmental appeal due to the tax effect being less than Rs. 3 lakhs, in line with the CBDT Instructions.

In a detailed discussion, the Tribunal highlighted a case law where exceptions were made for appeals involving substantial questions of law or recurring legal issues. The Tribunal found that the present appeal involved a question of law regarding the interpretation of a specific section of the Act, falling under the exception clause of the CBDT Circular. The Tribunal noted similarities between the current Instruction and a previous one, and based on precedent, dismissed the departmental appeal due to the tax effect being below the prescribed limit. The decision was made in accordance with the CBDT Instructions and previous judgments, ultimately leading to the dismissal of the appeal by the revenue. The Tribunal pronounced its decision on 12-11-2012, dismissing the appeal based on the monetary limit set by the CBDT Instructions.