2013 (12) TMI 247 - AT - Income Tax

Tax effect - Held that - As per Section 268A inserted by the Finance Act, 2008 with retrospective effect from 01/04/99 and the CBDT Instruction No.3 of 2011 dated 09.02.2011 - The CBDT has revised the monetary limit to Rs. 3,00,000/- for filing the appeal before the Tribunal - The Revenue should not have filed the instant appeal before the Tribunal - Following CIT v. Delhi Race Club Ltd 2011 (3) TMI 1488 - High Court of Delhi - the instructions issued in the Circulars by CBDT are applicable for pending cases also - Decided against Revenue.

Summary

Issues:
1. Appeal against the order of the CIT(A) for A.Y 2009-10.
2. Interpretation of Section 268A of the Income Tax Act, 1961.
3. Applicability of CBDT Instruction No.3 of 2011 regarding monetary limits for filing appeals.
4. Precedents set by various High Courts on the application of CBDT circulars to pending cases.

Analysis:
1. The appeal filed by the Revenue was against the order of the CIT(A) for the assessment year 2009-10. During the hearing, it was noted that the tax effect in this appeal was less than Rs.3,00,000, which is a crucial threshold for filing appeals as per Section 268A of the Income Tax Act, 1961.

2. Section 268A empowers the Board to issue orders fixing monetary limits for regulating the filing of appeals by income-tax authorities. The provision states that if the tax effect is below the specified limit, the authority should not file an appeal. In this case, it was acknowledged that the Board's instructions are binding on income-tax authorities, and the Revenue should not have filed the appeal due to the tax effect being below the prescribed amount.

3. The CBDT had issued Instruction No.3 of 2011, revising the monetary limit for filing appeals before the Tribunal to Rs.3,00,000. Considering this instruction along with Section 268A, it was concluded that the Revenue's appeal should not have been filed based on the prescribed limit.

4. The Tribunal referred to decisions by the Punjab & Haryana High Court and the Delhi High Court, which emphasized the applicability of CBDT circulars to pending cases. The High Courts' rulings supported the view that instructions issued by the CBDT, including monetary limits for appeals, are applicable to ongoing cases. Therefore, the Tribunal dismissed the Revenue's appeal without delving into the merits of the case, aligning with the principles established by the High Court decisions.

In conclusion, the Tribunal upheld the applicability of Section 268A and CBDT instructions, emphasizing the importance of adhering to prescribed monetary limits for filing appeals. The decision to dismiss the Revenue's appeal was based on the clear guidelines provided by the relevant legal provisions and judicial precedents.