Monetary limit for filing second appeal. - Income Tax - 1326/CBDT

INSTRUCTION NO. 1326/CBDT Dated: april 1, 1980 It has been represented to the board by some commissioners that no second appeal to the tribunal against the orders of the AAC/CIT(Appeals) should be filed where the deduction of entertainment expenses allowed does not involve tax effect of Rs.10,000 and above. The logic is that after the tribunal confirms such orders in the light of the Gujarat High court decision in the case of patel brothers, the matters are being allowed to rest in cases where the revenue effect is less than 10000 as per the instructions of the board contained in D.O. Letter No.273/55/75-ITJ dated 12th September 1977. The process of filing 2nd appeals to the tribunal therefore results in waste of time and effort in a number of cases. 2. As per the standing instruction the monetary limit for filing second appeal to the tribunal is s.1500 or more excepting in cases where the order appealed against involves a general question of law which effects a large number of cases. The board have since decided that no departmental appeals on question of fact need be filed against the order of the AACs/CIT(Appeals) if in the tax effect/reduction in penalty is Rs.5000 or less in respect of an income-tax appeal and Rs.2000 or less in respect of an appeal under other direct taxes. In respect of questions of law while one or two representative references should continue to be agitated before the concerned High court even if the tax effect in those references is small repetitive appeals to the tribunal against the order of the AACs/CsIT (Appeal) need not be filed on the same legal issue if the tax effect in each order is Rs.1000 or less. 3. However looking to the High percentage of filing of second appeals with regard to the allowance of entertainment expenses the board have decided that no second appeal to the tribunal should be filed in cases where the tax effect does not exceed Rs.5000. The revised monetary limit would be applicable to the charges other than the ones within the jurisdiction of the High courts which have already decided the said issue in favour of the department.