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TMI Blog2007 (3) TMI 406X X X X Extracts X X X X X X X X Extracts X X X X ..... social security contribution. 4. We have gone through the grounds of appeal filed by the Revenue and found that tax effect in the instant appeal is less than Rs. 2 lakhs. In view 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 of ITAT Delhi Bench in the case of Vikram Bhatnagar [IT Appeal No. 60 (Delhi) of 2002, dated 10-3-2006]. 5. 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 dismissed in the light of the decision of the Hon ble Bombay High Court in the case of CIT v. Pithwa Engg. Works [2005] 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 compliance with the said instructions, they do not file references if the tax effect is less than Rs. 2 lakhs. But the same approach is not adopted with respect to the old referred cases even if the tax effect is less than Rs. 2 lakhs. In our vi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sidered view the instructions for not filing the appeals with regard to the quantum of revenue effect being less than particular amount have not been issued by the Central Board of Direct Taxes in a light hearted manner. These are issued after a great deal of deliberations and discussion where every aspect of the matter, more particularly the question of loss of revenue is examined in depth. Every officer is enjoined with the duty to advance the policies laid down by the Central Board of Direct Taxes and see that these are not defeated. The instructions are also aimed at reducing arrears of appeals in Courts and Tribunals. The Central Board of Direct Taxes, in the circular dated March 27, 2000, had asked all officers of the Income-tax Department under their control not to file appeals before the Appellate Tribunal in cases where the tax effect involved in appeal did not exceed Rs. 1 lakh. These instructions in question are binding on all departmental authorities and they could not be by passed and treated as of no consequence on the pretext that these were private only, and the authorities are bound to follow, comply with and see that the policies laid down by the Board achieve the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thorities 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. Otherwise, section 119(1) itself mandates that such instructions shall be binding on the income-tax authorities. Section 119(2) refers to specific orders with reference to any class of income or class of cases either by way of relaxation of any of the provisions of section mentioned therein or with reference to class of income or class of cases. These instructions could be in the form of guidelines, principles or procedure to be followed by the income-tax authorities in the work relating to assessment, collection of revenue or the initiation of proceedings for the imposition of penalties. Here also the Board may, if it is of the opinion that it is necessary in the public interes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s to what should be the monetary limit to be taken into consideration while filing an appeal by the revenue. From para 2 of the aforementioned instruction, it could be seen that following three point were stated explicitly i.e., ( a )The new monetary limit would apply with reference to each case taken singly. ( b )In group cases, each case should individually 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 the judgment of the Hon ble Madras High Court in the case of CIT v. S. Annamalai ..... X X X X Extracts X X X X X X X X Extracts X X X X
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