2015 (2) TMI 66 - AT - Income Tax

Penalty u/s.271(1)(c) - Revenue s appeal in-asmuch as it disputes the cancellation of the penalty in the sum of ₹ 3,36,107/-, may not be maintainable in view of section 268A prescribing monetary limit for the filing of appeals by the Revenue - Held that - As a plain reading would show, it is the Instruction No.3/2011 dated 09.02.2011 which should apply in the instant case; the monetary limit for appeals before the appellate tribunal per which is at ₹ 3 lacs. Again, without doubt, the right to appeal is a statutory right, and it is trite law that vested right cannot be divested. Even granting so, the same could only be on the basis, and in terms, of or by an express provision of law. Section 268A of the Act clearly requires the appellate forums, being the appellate tribunal, high court and supreme court, to, while deciding the appeals by the Revenue preferred before them, have regard to, inter alia, the directions, instructions, etc. by the Board prescribing the monetary limits for filing its appeals before the said forums. The said directions, instructions, etc. thus assume part of and have the force of law. Further, the monetary limit prescribed is for regulating the filing of appeals or references by an income tax authority under the Act. - Whatever be the merits of the Revenue s case, the appellate tribunal as a lower court is bound by the decisions by the hon ble jurisdictional high court, which has taken a consistent view in favour of the Instructions by the Board in the matter, both prior and subsequent to section 268A, brought on the statute by Finance Act, 2008, being retrospective, so that they shall apply to appeals by the Revenue filed prior to the date of their issue and coming in to effect. Put differently, shall apply to pending appeals. In other words, the monetary limit prescribed per a circular/instruction issued u/s. 268A that shall apply qua an appeal is that in force at the time the appeal is heard and not when it is filed. The only recourse therefore for the Revenue would be to pursue the matter before the hon ble court under review jurisdiction or before the hon ble apex court, and not before the tribunal. - Decided against revenue.

Summary

Issues involved:
Appeal against levy of penalty u/s.271(1)(c) of the Income Tax Act, 1961 for A.Y. 2002-03. Interpretation of monetary limits for filing appeals by the Revenue under section 268A.

Detailed Analysis:

Issue 1: Appeal against levy of penalty
The Appellate Tribunal ITAT Mumbai heard an appeal by the Revenue against the Commissioner of Income Tax (Appeals) order directing the penalty under section 271(1)(c) of the Income Tax Act, 1961 for the assessment year 2002-03. The appellant was absent during the hearing, and the Tribunal proceeded to decide the appeal after considering the arguments presented.

Issue 2: Interpretation of monetary limits under section 268A
The Tribunal analyzed the monetary limits set by the Board for filing appeals by the Revenue under section 268A. The Revenue's appeal disputed the cancellation of a penalty amount below the threshold specified by the Board's Instruction. The Tribunal reviewed previous Instructions by the Board and the statutory provisions to determine the applicable monetary limit for the appeal filed in 2011. The Tribunal emphasized that the Instructions issued by the Board have the force of law and must be followed by the appellate authorities to regulate the filing of appeals by the Revenue.

Issue 3: Application of Instructions on pending appeals
The Tribunal examined the Instructions issued by the Board regarding the monetary limits for filing appeals. It noted the importance of considering the date of filing the appeal in relation to the effective date of the Instructions. The Tribunal highlighted the consistent view of the jurisdictional high court in favor of applying the Instructions to pending appeals. It emphasized that the monetary limit applicable to an appeal is the one in force at the time of the appeal hearing, not when it was filed. The Tribunal referenced previous court decisions to support its interpretation of the law and concluded that the Revenue's appeal must fail based on the applicable Instructions and judicial precedents.

In conclusion, the Tribunal dismissed the Revenue's appeal against the penalty levy, emphasizing the importance of adhering to the monetary limits set by the Board under section 268A and following the consistent interpretation of the law by the jurisdictional high court.