2014 (4) TMI 120 - HC - Income Tax

Maintainability of appeal Quantum of tax less than 2lakhs Held that - The decision in Commissioner of Income Tax Vs. Suresh Chand Goyal 2007 (1) TMI 90 - MADHYA PRADESH HIGH COURT followed - The Board had issued directions that the appeals will be filed only in cases where the tax effect exceeds Rs. 2 Lakhs in the matter of High Court in appeals u/s 260-A or Reference u/s 256(2) - The instructions of the Board are binding to all the authorities working under the Board including the appellant - This appeal which was filed on 10.1.2005 is fully covered by the instructions issued by the Board on 27.3.2000 and the appeal could not have been filed - the orders passed by the appellate authorities on 26.8.2004 and the tax liability is less than Rs. 2 Lacs thus the Department had no right to file the appeal Decided against Revenue.

Summary

Issues:
- Maintainability of appeals where tax liability is less than Rs. 2 Lakhs based on circular No. 1979 dated 27.3.2000 issued by the Central Board of Direct Taxes.

Analysis:
The judgment by the High Court of Madhya Pradesh involved the issue of the maintainability of appeals where the tax liability is less than Rs. 2 Lakhs, as per circular No. 1979 dated 27.3.2000 issued by the Central Board of Direct Taxes. The learned Senior Advocate pointed out that the instructions issued by the Board prohibit filing an appeal in such cases. Referring to the appellants' own averments, it was noted that the tax liability for each year was less than Rs. 2 Lakhs. The Senior Advocate cited a Division Bench's orders in a previous case to support the contention that the appeals in question would not be maintainable due to the tax amount being below the specified limit.

The judgment referenced a previous case involving Ramkishore Nandkishore, where a Coordinate Bench of the Court had considered similar circumstances and relevant judgments. The Court highlighted that the circular issued by the Department set a monetary limit for filing appeals, and any appeal below Rs. 2 Lakhs could not have been filed as per the Board's instructions. The Court emphasized that the circular was binding on all authorities under the Board, including the appellant Commissioner of Income Tax. The judgment reiterated that the instructions of the Board were mandatory and that the appeal in question, filed when the tax liability was less than Rs. 2 Lakhs, was not maintainable. The Court drew parallels with previous decisions in cases involving Suresh Chand Goyal and Ashok Kumar Manibhai Patel and Company to support its conclusion.

Consequently, the High Court found the appeals to be incompetent and dismissed them. The Court emphasized that since the tax liability was less than Rs. 2 Lakhs, the Department had no legal basis to file the appeals. Therefore, based on the circular and previous legal precedents, the appeals were deemed incompetent and dismissed accordingly.