2014 (4) TMI 971 - HC - Income Tax

Monetary limit for filing of appeals - Application of instructions of 2011 - Whether the instructions of 2011 would apply to all the pending appeals irrespective of the fact whether those appeals were filed after the coming into operation of the instructions of 2011 or not Held that - If the language employed in a piece of legislation is clear and unambiguous, it is not for the Court to interpret the same in a different way simply because the Court thinks that it would be wiser to adopt another reasonable view instead of the one specifically mandated in the statutory provisions - clause 11 of the Instructions of 2011 specifically states that this instruction will apply to appeals filed on or after 9th February 2011 - the cases where appeals have been filed before 9th of February 2011 will be governed by the instructions on this subject, operative at the time when such appeal was filed. There is no ambiguity in the instructions of either 2011 or 2008 as regards the applicability of those instructions in respect of the appeals and it has also been made clear that if those appeals are not filed after the given dates mentioned in those instructions, the fate of the appeals will be governed in accordance with the instructions prevailing on the date of presentation of such appeals thus, it could not be held that even if an appeal is filed prior to 9th February 2011, the same would be barred notwithstanding the fact that at the time of filing such appeal, the same was not barred by the then instructions of the CBDT. It simply enables CBDT from time to time, to issue orders, instructions or directions to other income-tax authorities, fixing such monetary limits as it may deem fit, for the purpose of regulating filing of appeal or application for reference by any income-tax authority under the provisions of the concerned Chapter. From the language of the enabling provisions of the statute, it is clear that no power has been conferred to the CBDT to make the pending appeals or references filed in accordance with the then existing law infructuous by issuing any such direction or instruction with retrospective effect the reference is answered in negative Decided in favor of Revenue.

Issues Involved:

1. Applicability of CBDT instructions of 2011 to pending appeals filed before the issuance of these instructions.
2. Interpretation of Section 268A of the Income Tax Act.
3. Impact of the literal rule of interpretation on the applicability of CBDT instructions.
4. Analysis of previous judgments and their relevance to the current case.

Issue-wise Detailed Analysis:

1. Applicability of CBDT Instructions of 2011 to Pending Appeals:
The primary issue was whether the CBDT instructions of 2011, which revised the monetary limits for filing appeals, should apply to appeals that were already pending before the issuance of these instructions. The court noted that the language of clause 11 of the instructions of 2011 was unambiguous, stating, "this instruction will apply to appeals filed on or after 9th February 2011. However, the cases where appeals have been filed before 9th of February 2011 will be governed by the instructions on this subject, operative at the time when such appeal was filed." The court emphasized that this clear legislative intent could not be ignored and that pending appeals should be governed by the instructions in force at the time of their filing.

2. Interpretation of Section 268A of the Income Tax Act:
Section 268A of the Income Tax Act empowers the CBDT to issue instructions fixing monetary limits for filing appeals. The court examined this section and concluded that it does not grant the CBDT the authority to make pending appeals infructuous by issuing instructions with retrospective effect. The court cited the Supreme Court's observation in Hukam Chand v. Union of India, stating that delegated legislation cannot have retrospective effect unless explicitly empowered by the enabling statute.

3. Impact of the Literal Rule of Interpretation:
The court applied the literal rule of interpretation, adhering strictly to the clear and unambiguous language of the instructions. It referred to the Supreme Court's ruling in B. Premchand vs. Mohan Koikal, which emphasized that courts should not deviate from the literal rule unless the language is ambiguous or leads to absurd results. The court found no ambiguity in the instructions of 2011 and 2008 and thus followed the literal meaning, rejecting any interpretation that would apply the revised monetary limits to pending appeals.

4. Analysis of Previous Judgments:
The court reviewed previous judgments, including those of the Bombay High Court and other High Courts, which had applied the revised monetary limits to pending appeals. However, the court disagreed with these judgments, finding that they did not follow the Supreme Court's principles on literal interpretation. The court specifically noted that the Division Bench in Sureshchandra Durgaprasad Khatod (HUF) relied on the Bombay High Court's decision in Commissioner of Income Tax vs. Smt. Vijaya V. Kavekar, which it found inconsistent with the literal rule of interpretation.

Conclusion:
The court concluded that the instructions of 2011 do not apply to appeals filed before 9th February 2011. It emphasized that the clear legislative intent and the literal rule of interpretation must be followed, and pending appeals should be governed by the instructions in force at the time of their filing. The reference was answered in the negative, and the appeal was directed to be decided in accordance with this interpretation.

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