2013 (2) TMI 13 - AT - Income Tax

Veracity of appeal by revenue - Appeal filed by the Revenue for A.Y. 2002-03 - Tax effect in this appeal is less than the amount prescribed by the CBDT - Instruction No.3 of 2011, dated 09.02.2011 Section 268A has been inserted by the Finance Act, 2008 with retrospective effect from 01/04/99 - Held that - Following the decision in case of Oscar Laboratories Pvt. Ltd. (2009 (2) TMI 28 - PUNJAB AND HARYANA HIGH COURT) that the instructions issued in the Circulars by CBDT are applicable for pending cases also. Therefore, by keeping in view the ratio laid down in the aforesaid referred to cases, we are of the considered view that Instruction No.3/11, dated 09.02.2011 issued by the CBDT are applicable for the pending cases also and in the said instructions, monetary tax limit for not filing the appeal before the ITAT is Rs. 3.00 lakhs Against revenue

Summary

Issues:
Appeal against CIT(A) order for A.Y. 2002-03 - Tax effect less than prescribed amount - Section 268A of Income Tax Act, 1961 - CBDT Instruction No.3 of 2011 - Applicability of monetary limits for filing appeals - Precedents from Punjab & Haryana High Court and Delhi High Court.

Analysis:
The appeal before the Appellate Tribunal was filed by the Revenue and cross objection by the assessee against the order of the CIT(A) for the assessment year 2002-03. During the hearing, it was highlighted that the tax effect in the appeal was below the limit prescribed by the CBDT, indicating that the appeal should not have been filed by the department. The provisions of Section 268A of the Income Tax Act, 1961, were discussed, emphasizing the Board's authority to issue orders fixing monetary limits for filing appeals. It was noted that the CBDT had issued Instruction No.3 of 2011, revising the monetary limit to Rs. 3,00,000 for filing appeals before the Tribunal.

The Tribunal observed that the Revenue should not have filed the appeal considering the CBDT instruction and the provisions of Section 268A. The Tribunal also referenced decisions from the Punjab & Haryana High Court and the Delhi High Court, supporting the applicability of monetary limits for filing appeals. Citing specific cases such as CIT v Oscar Laboratories (P.) Ltd and CIT v Delhi Race Club Ltd, the Tribunal highlighted that circulars issued by the CBDT were applicable to pending cases as well.

Based on the legal framework and precedents, the Tribunal concluded that the appeal filed by the Revenue should be dismissed without delving into the merits of the case. Additionally, the cross objections filed by the assessee were not pressed by their counsel, leading to their dismissal. Consequently, both the appeal of the Revenue and the cross objections of the assessee were dismissed. The judgment underscored the importance of adhering to monetary limits set by the CBDT for filing appeals and the binding nature of such instructions on income-tax authorities.