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TMI Blog2006 (8) TMI 329X X X X Extracts X X X X X X X X Extracts X X X X ..... of C.B.D.T. Instruction No. 2, dated 24-10-2005, the department should not have filed the appeals before the Tribunal. For this purpose reliance may be placed on the decision ITAT Delhi Bench in case of Vikram Bhatnagar [IT Appeal No. 60/D/2002, dated 10-3-2006]. 3. The revenue is not supposed to file appeal as per CBDT Circular dated 24th October, 2005. The appeal of the revenue is therefore liable to be dismissed in the light of the decision of the Hon ble Bombay High Court in the case of Pithwa Engg. Works ( 276 ITR 519), wherein their Lordships have observed as under: "One fails to understand how the Revenue can contend that so far as new cases are concerned, the circular issued by the Board is binding on them and in complian ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... earlier circular where reference was not required to be filed to the High Court if the tax effect was less than Rs. 2 lakhs. The contention of the revenue in that case was that Rs. 2 lakhs limit was increased by circular dated 27-3-2000 and prior to that, the limit was only Rs. 50,000 and the contention of the revenue was that the new limit would not be applicable to the old references. The High Court rejected the said contention of the revenue. In those circumstances, though the said High Court decision did not deal with the circular dated 24-10-2005, but it had dealt with the earlier circular and the limits of that circular were applied even to the cases which were prior to the old circular. Therefore, the ratio of that decision was ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o follow, comply with and see that the policies laid down by the Board achieve their objectives. These instructions had been issued to avoid unnecessary litigation in small cases particularly, it was very difficult for a small assessee to come from a remote and distant place to defend an appeal filed against him in the Tribunal. The legal fees payable to the lawyer, travelling and other incidental expenses involved, were likely to be more than the tax effect in the appeal and the financial loss to such an assessee would be more, even if he legally succeeded in the appeal. Therefore, the circular/instruction definitely aimed at redressing problems of small assessees. The assessees are entitled to urge the Tribunal to enforce it. It was obser ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CBDT, on the income-tax authorities, the provisions of section 119 of IT Act are very much clear. On a plain reading of section 119, it is clear that sub-section (1) refers to orders, instructions and directions to the Income-tax authorities by the Board. The section itself provides that all such authorities and all other persons employed in the execution of this Act shall observe and follow such orders, instructions and directions of the Board. Only exceptions provided under the proviso are that such instructions cannot interfere with the discretion of the CIT(A) in exercise of appellate functions and also cannot direct any income-tax authority to make a particular assessment or to dispose of a particular case in a particular manner. Othe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch instructions interfere with the discretion of Commissioner (Appeals) or with the jurisdiction and power of particular income-tax authority in a particular case. Admittedly, instructions issued by the CBDT prescribing monetary limit for filing the appeals before the Tribunal, High Court or Supreme Court are not in nature which could interfere with the discretion of Commissioner (Appeals) or interfere with the powers and jurisdiction of income-tax authorities to complete the assessment order to dispose of a particular matter in a particular case in a particular manner. Therefore, these instructions are binding on income-tax authorities. 6. With regard to the contention that instruction No. 1985, dated 29-6-2000 issued by the C.B.D.T., ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ally satisfy that new monetary limits. ( c )The working out of the monetary limits will, therefore, not take into consideration the cumulative revenue effect. Such being the policy decision taken by the revenue, with a view to reduce the litigation and also the cost involved therein, it is duty of the revenue authorities to scrupulously follow the policy decision taken by the C.B.D.T. and in cases where tax effect in each case is less than Rs. 1 lakh, the departmental authorities should not prefer appeals before the Appellate Tribunal. The ITAT, Hyderabad Benches had consistently taken this view, which is in consonance with the view taken by the Hon ble Bombay High Court in the case of CIT v. Camco Colour Co. [2002] 254 ITR 565 and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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