2011 (1) TMI 919 - AT - Income Tax

Where the Department is barred by the circular to file the appeals before the Tribunal if the monetary limit is below Rs. 2 lakhs. Is department justified in filing such appeals - Can memorandum of Cross objection be raised by asseessee for such appeals - Held that - it has been decided by the Board that Departmental appeals will be filed before Tribunals, High Courts and Supreme Court as per monetary limits and conditions specified below. , when no valid appeal is filed by the Revenue, the assessee has no right to file the cross-objection against such unadmitted appeal. Accordingly, the cross-objections furnished by the assessee are also unadmitted.

Summary

Issues:
- Appeal filed by Revenue against orders of CIT(A) for asst. yrs. 2000-01 to 2002-03.
- Tax effect below Rs. 2 lakhs in all appeals by Revenue.
- Interpretation of Instruction No. 5 of 2008 regarding monetary limits for filing appeals.
- Conflict between Instruction No. 5 of 2008 and Instruction No. 5 of 2007.
- Dismissal of Revenue's appeals based on CBDT circular.
- Barred appeals of Revenue due to limitation.
- Filing of cross-objections by assessee against unadmitted appeals.

Analysis:

1. The appeals were filed by the Revenue against orders of the CIT(A) for the assessment years 2000-01 to 2002-03, with the tax effect in all appeals being below Rs. 2 lakhs. During the hearing, the assessee's counsel cited Instruction No. 5 of 2008, stating that the Department is restricted from filing appeals if the monetary limit is below Rs. 2 lakhs, requesting the dismissal of Revenue's appeals.

2. The Departmental Representative argued based on Instruction No. 5 of 2007, emphasizing that cases with recurring legal questions should be considered on merits regardless of the monetary limit. However, upon careful examination of the instructions issued by the CBDT, the Tribunal noted that Instruction No. 5 of 2008 superseded previous instructions, including No. 5 of 2007. Consequently, the Tribunal held that the Revenue should not have filed the appeals contrary to the Circular No. 5 of 2008, leading to the dismissal of the appeals.

3. Additionally, the appeals of the Revenue were found to be barred by a 31-day limitation, prompting the Department to file condonation petitions. Despite this, the Tribunal refrained from ruling on the late filing of appeals due to the dismissal based on the CBDT circular and the Apex Court's decision.

4. Furthermore, the assessee had filed cross-objections against the Revenue's appeals, which were also delayed by 107 days. As the Revenue's appeals were deemed inadmissible, the Tribunal concluded that the assessee had no right to file cross-objections against unadmitted appeals. Consequently, both the appeals of the Revenue and the cross-objections of the assessee were dismissed.