The need for a selective approach to the appellate authorities on the basis of adequate justification and achievement. - Income Tax - 442/CBDT

INSTRUCTION NO. 442/CBDT Dated: July 26, 1972 Section(s) Referred: 256 Statute: Income - Tax Act, 1961 Attention is invited to Board's Instructions and letters noted below. It is observed that in spite of these instructions a large number of departmental appeals are filed before the I.T. Appellate Tribunals and numerous recommendations are made to the Board for references before the High Courts and appeals to the Supreme Court. 2. The need for a selective approach to the appellate authorities on the basis of adequate justification and achievement of good success ratio in these approaches cannot be over-emphasised. Any deficiency in these two criteria is bound to place the Department in an unfavourable plight and invite avoidable criticism. The Commissioners and Addl. Commissioners are, therefore, strongly advised to follow the yardstick laid down in Board's No. 91/47/68-ITJ dated 14-10-1968 as amended from time to time in filing departmental appeals before the I.T. Appellate Tribunal. 3. In recommending references to High Courts it has been elucidated in the circular of the Board dated 14th October, 1968, that references against Tribunal's finding on fact would not be maintainable unless the decision is wholly perverse or based on no evidence (which is not the same thing as inadequate evidence). 4. In so far as departmental appeals before the Supreme Court are concerned as indicated in the Board's circular letter of 14th October, 1968, recommendation should be made only in matters involving questions of law which are of clear general importance. 5. While suggesting a reference or appeal, the instructions of the Board and the decisions of other High Courts should be considered and a reference recommended after consulting the counsel whose advice should accompany the report. It should be explained to the Counsel that we would like to file an application or an appeal where we have not merely an arguable case but a good chance of succeeding before the high Court/Supreme Court. 6. Lastly, as indicated in the Board's above noted communications, the Board do not generally approve of appeals/reference before Tribunal/High Court with revenue effect of less than Rs. 1500/5000 and it may be added that the Board would also generally be reluctant to consider appeals before Supreme Court where revenue effect is less than Rs. 15,000 unless a large number of cases is likely to be affected and an early decision is desirable. 7. The above instructions would apply also to appeals/references under the Direct Tax Acts other than I.T. 1. No. 91/47/68-ITJ(38), dated 14-10-1968. 2. No. 277/1/70-ITJ dated 20-5-1970. 3. D.O. 265/2/71-ITJ dated 5-11-1972 from Shri Johnson, Member.