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2015 (2) TMI 452 - AT - Income TaxPrescribed monetary limits for filing of appeal before ITAT - Whether, this appeal of revenue, which is below the prescribed limit of tax effect in view of the Board s Instruction No.5/2014 issued on 10.07.2014 revising the monetary limits for filing of appeals by the Department before ITAT is maintainable or not? - Held that - On query from the Bench, the Ld. DR could not point out any of the exceptions as provided in the Circular as that this is a loss case having tax effect more than the prescribed limit, which should be taken into account,or that this is a composite order for many assessment years where tax effect will be more than the prescribed limit as per para 5 of above instructions, or that this is a case, where, in the case of revenue, where constitutional validity of the provision of the Act or I.T. Rules 1962 are under challenge,or that Board s order, Notification, Instruction or Circular has been held to be illegal or ultra vires, or that Revenue Audit Objection in the case has been accepted by the Department and the same is under challenge. The Ld. DR could not point out any of the exceptions as provided above. Accordingly, this being a low tax effect case, the appeal of the revenue dismissed in limine without going into merits. - Decided against revenue.
Issues Involved:
1. Applicability of CBDT Instruction No. 5/2014 regarding monetary limits for filing appeals. 2. Retrospective versus prospective application of CBDT instructions. 3. Judicial precedents on the applicability of monetary limits to pending cases. Detailed Analysis: 1. Applicability of CBDT Instruction No. 5/2014 regarding monetary limits for filing appeals: The central issue in these appeals is whether the appeals by the revenue, which have a tax effect below the prescribed limit as per CBDT Instruction No. 5/2014, are maintainable. The instruction, issued on 10.07.2014, sets a monetary limit of Rs. 4 lakhs for filing appeals before the ITAT. The Ld. Counsel for the assessee argued that these appeals should be dismissed as they fall below this threshold. The Ld. CIT-DR contended that the instruction should only apply to appeals filed on or after 10.07.2014, not to those filed before this date. 2. Retrospective versus prospective application of CBDT instructions: The Tribunal considered the argument about whether the instruction should be applied retrospectively or prospectively. The Ld. CIT-DR argued for a prospective application, citing para-11 of the instruction, which states that it applies to appeals filed on or after 10.07.2014. However, the Tribunal referenced several judicial precedents which support the retrospective application of such instructions to pending cases. 3. Judicial precedents on the applicability of monetary limits to pending cases: The Tribunal cited multiple cases to support the retrospective application of the instruction: - CIT Vs M/s. P. S. Jain & Co. (Delhi High Court): The court noted the increasing burden on the Department and the need to reduce litigation, ruling that the Board's circular on monetary limits should apply to old references as well. - CIT v. Sureshchandra Durgaprasad Khatod (HUF) (Gujarat High Court): The court held that Instruction No. 3/2011, which had a similar clause about prospective application, should apply to pending cases. The court emphasized reducing litigation with minimal tax effect. - Commissioner of Income Tax v. Smt. Vijaya V. Kavekar (Bombay High Court): The court interpreted the instruction to apply to all pending cases, dismissing appeals with tax effects below the revised limits. - Commissioner of Income Tax V/s Delhi Race Club Ltd. (Delhi High Court): The court applied the instruction to pending cases, aligning with the objective of reducing litigation. The Tribunal concluded that the recent instruction (No. 5/2014) should apply to pending appeals as well, given its identical nature to previous instructions and the consistent judicial interpretation supporting such application. Conclusion: In light of the above judicial precedents and the main objective of reducing pending litigation with minimal tax effect, the Tribunal dismissed the revenue's appeals in limine. The appeals were deemed not maintainable as they fell below the prescribed monetary limit of Rs. 4 lakhs, as per CBDT Instruction No. 5/2014. The Tribunal emphasized the importance of applying these instructions to pending cases to achieve the intended reduction in litigation. Order: The appeals of the Revenue are dismissed. The order was pronounced in open court on 04.02.2015.
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