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TMI Blog2001 (12) TMI 209X X X X Extracts X X X X X X X X Extracts X X X X ..... j.) (vi) CST v. Indra Industries [2001] 248 ITR 338 (SC) (vii) Gujarat Gas Co. Ltd. v. Joint CIT [2000] 245 ITR 84 (Guj.) (viii) UTI v. P.K. Unny [2001] 249 ITR 612 (Bom.) (ix) WTO v. Sardar Shivaji Rao Angre 29 ITC 76 (Ind.) (x) Aradhana Oil Mills v. Asstt. CIT [IT Appeal Nos. 439 to 441 (Ind.) of 1996] (xi) WTO v.Prakash Rani Agrawal 29 ITC 344 (xii) Jaikishan Gopikishan Sons v. CIT[1989] 178 ITR 481 (MP) (xiii) Y.P. Chawla v. M.P. Tiwari [1992] 195 ITR 607 (SC) (xiv) CIT v. T.V. Ramanaiah Sons [1986] 157 ITR 300 (AP) and (xv) Collector, Central Excise v. Usha Martin Industries [1977] 7 SCC 47. 3. In opposition, the learned DR submits that instruction No. 1903 has been issued under sub-section (1) of section 119 of the Act which is administrative in nature. Therefore, the assessee cannot be allowed to get it enforced. He submits further that at the most the instructions issued under sub-section (1) of section 119 is the guideline for the officials of the department. The learned DR draws our attention to the provisions laid down under sub-sections (1) and (2) of section 119 of the Act. 3.1 The revenue has raised several pleas against the preliminary obj ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the case Executors of Late Shri D.T. Udeshi are not at all public circulars meant and notified to the public at large but only instructions for departmental use alone. In a judgment of the Delhi High Court in the case of CIT v. ITAT [1998] 232 ITR 207, it was held that the Tribunal is required to examine if the case is one which does not attract the applicability of the CBDT instructions or is one covered by anyone of the exceptions carved out in the circular itself. The relevant statutory provisions which specifically use the words "orders, instructions and directions" are contained in both sub-sections (1) and (2) of section 119 as comprised in Chapter XIII of the Income-tax Act, 1961, which chapter is titled as 'Income-tax Authorities'. The said section 119 is grouped in Part-A of the said Chapter of which the sub-title is "Appointment and Control" and the title of section 119 itself is "Instructions to subordinate authorities". In sub-section (1) power and jurisdiction is vested in both to issue such orders, instructions and directions to other income-tax authorities as it may deem fit for proper administration of this Act and such authorities as well as other persons emplo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... expressly in the matter of appeals and revisions as in Chapter XX of the Act or in the matter of appeals to the Appellate Tribunal as in sections 252 to 255 Part-B of the said chapter. Hence, it is very clear that the orders, etc. of the Board cover the entire Act while section 119(2) does not expressly cover Chapter XX-B containing sections 252 to 255. One more vital difference, as mentioned earlier between sub-sections (1) and (2) of section 119 is that if the Board is of the opinion that it is necessary in the public interest so to do, such order under section 119(2) could be published and circulated in the prescribed manner for general information. In other words, words and expressions like "public circular", "publishing", "Circulars", "general information", "public interest" etc. are within the exclusive domain of section 119(2)(a). Such words are frequently used in judicial pronouncements as "administrative instructions" referable to sub-section (1) on the one hand and "public circulars" referable to subsection (2)(a) on the other. Thus, "publication", "circulation", "in the prescribed manner", "for general information" do not cover within their sweep anything relating to C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at these judgments mainly involve the matters specifically mentioned in section 1 19(2) of the Act and so far as the orders of this Bench are concerned in the case of Sardar Shivaji Rao Angre; in the case of Prakash Rani Agrawal and in the case of Aradhana Oil Mills are of no help as therein the relevant facts and circumstances of the cases have not been examined. 4. After careful consideration of the arguments advanced by the parties we find that the issue raised herein in opposition to the preliminary objection is two fold; firstly as to-"whether the subordinate authorities are bound by the instructions issued under sub-section (1) of section 119 of the Act by the CBDT?" and secondly as to-"whether the assessee can get such instructions enforced against the revenue?" or in other words as to-"whether the instructions issued under sub-section (1) of section 119 have got force of law?" 4.1 It is misconceived by the revenue that we, by entertaining the preliminary objections raised herein by the assessee, are going to restrain or prohibit the right of the CIT to file appeal before the Tribunal having tax effect up to Rs. 25,000 and thereby advancing fundamental rights/remedies or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it is necessary in the public interest so to do, be published and circulated in the prescribed manner for general information; (b) the Board may, if it considers it desirable or expedient so to do for avoiding genuine hardships in any case or class of cases, by general or special order, authorise any income-tax authority, not being a Commissioner (Appeals) to admit an application or claim for any exemption, deduction, refund or any other relief under this Act after the expiry of the period specified by or under this Act for making such application or claim and deal with the same on merits in accordance with law; (c) the Board may, if it considers it desirable or expedient so to do for avoiding genuine hardship in any case or class of cases, by general or special order for reasons to be specified therein, relax any requirement contained in any of the provisions of Chapter ILV or Chapter VI-A where the assessee has failed to comply with any requirement specified in such provision for claiming deduction thereunder, subject to the following conditions, namely:-- (i) the default in complying with such requirement was due to circumstances beyond the control of the assessee; and ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the valuable time of the department for more important matters by putting some reasonable restriction as a policy matter for proper administration. In consequences thereof, some assessees have been benefited. Thus, the related assessees are also affected and interested parties. 4.5 Having gone through the judgments relied upon by the parties we find therein that there was no occasion to consider the distinction, if any, between the provisions laid down in sub-section (1) and sub-section (2) of section 119 of the Act but it has been held that the instructions issued by the CBDT under section 119 are binding on the subordinate income-tax authorities. In absence of any contrary evidence on record it appears that instruction No. 1903 of CBDT, the subject-matter of the preliminary objection, has been issued under sub-section (1) of section 119 of the Act. So far as the issue No. (1) is concerned, under identical circumstances the Hon'ble Bombay High Court in the case of Executors of late D.T. Udeshi was pleased to hold that reference could not be made where the tax effect in no year would exceed Rs. 8,500. In this case there were CBDT circulars (F.No. 279/26/83 dated 12-7-1984 and F. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anagement of the work of assessment and in public interest. It is a beneficial power given to the Board for proper administration of fiscal law so that undue hardship may not be caused to the assessee and the fiscal laws may be correctly applied. Heard cases which can be properly categorised as belonging to a class, can thus be given the benefit of relaxation of law by issuing circulars binding on the taxing authorities". The Hon'ble Apex Court has further held that under sub-section (2) of section 119, without prejudice to the generation of the Board's power set out in sub-section (1), a specific power is given to the Board for the purpose of proper and efficient management of the work of assessment and collection of revenue to issue from time to time general or special orders in respect of any class of incomes or class of classes setting forth directions or instructions not being prejudicial to the assessee as to the guidelines, principles or procedures to be followed in the work relating to the assessment. Such instructions may be by way of relaxation of any of the provisions of the sections specified there or otherwise. 4.7 In the case of UCO Bank the decisions of the Hon'ble ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lars binding on the taxing authorities. Under similar circumstances, the Hon'ble Bombay High Court in the case of Executors of late Shri D.T. Udeshi, as discussed above, was pleased to allow the issue in favour of the assessee. The Hon'ble Delhi High Court in the case of ITAT has also decided the identical issue in favour of the assessee. We have also come across the decision of the Hon'ble Supreme Court, a five Judges Bench in the case of CIT v. Anjum M.H. Ghaswala [2001] 119 Taxman 352 (SC), wherein the learned senior counsel appearing for the respondent assessee had placed strong reliance on the press release issued by the Board in support of the contention raised on behalf of the respondents. The Hon'ble Court was pleased to hold as "It is true that by this press release the Board had interpreted the provisions of the Act in a particular manner. Be that as it may, we would like to make it clear that every clarificatory Note or Press Release issued by the Board does not have the statutory force like the circulars issued by the Board under section 119 of the Act. It is only those circulars issued by the Board under the provisions of section 119 of the Act will have the statutory ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or as rituals. Even the pre-amendment circulars were issued for the same purpose of achieving uniformity in imposing excise duty on excisable goods. So the circular whether issued before December, 1985 or thereafter should have the same binding effect on the department. 21. Through a catena of decisions this Court has pronounced that the Revenue cannot be permitted to take a stand contrary to the instructions issued by the Board. It is a different matter that an assessee can contest the validity or legality of a departmental instruction. But that right cannot be conceded to the Department, more so when others have acted according to such instructions, (vide CCE v. Jayant Dalal (P.) Ltd. [1997] 10 SCC 402: [1996] 88 ELT 638, Ranadey Micronutrients v. CCE, [1996] 10 SCC 387: [1996] 87 ELT 19; Poulose and Mathen v. CCE; [1997] 3 SCC 50: [1997] 90 ELT 264; British Machinery Supplies Co. v. Union of India [1996] 9 SCC 663: [1996] 86 ELT 449. Of course the appellate authority is also not bound by the interpretation given by the Board but the assessing officer cannot take a view contrary to the Board's interpretation." The Hon'ble Andhra Pradesh High Court in the case of T.V. Ramanai ..... X X X X Extracts X X X X X X X X Extracts X X X X
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