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TMI Blog2007 (7) TMI 442X X X X Extracts X X X X X X X X Extracts X X X X ..... . 2. Hon ble Bombay High Court in the case of CIT v. Pithwa Engg. Works [2005] 276 ITR 519, 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 view, there is no logic behind this approach. This Court can very well take judicial notice of the fact that by passage of time money value has gone down, the cost of litigation expenses has gone up, the assessees on the file ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mstances, 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 applicable in the instant case as well. The CBDT has taken a policy decision not to file appeals in such type of cases and the circular is binding on the revenue even to appeals filed before 31-10-2005 and the department would not be justified in proceeding with those appeals within the monetary limit of tax effect prescribed in the circular dated 24-10-2005." 4. As per my considered view the instructions for not filing the appeals with regard to the quantum of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eal 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 observed by the Hon ble Madras High Court in CWT v. S. Annamalai [2002] 258 ITR 675 that in order to reduce the litigation for filing Departmental appeals/references before the Income-tax Appellate Tribunal, High Courts and the Supreme Court, the Central Board of Direct Taxes by Circular F. No. 279/126/98-ITJ, dated 27-3-2000, revised the monetary limits. It was held that in case of matters not covered by the exceptions like: ( i ) where revenue audit objection in the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s 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 authoriti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. ITAT, Hyderabad Bench in the case of Dy. CIT v. Nb. Syed Jaffar Ali Khan [2005] 1 SOT 691. Following was the observations and conclusions of the Co-ordinate Bench : "It is necessary to bear in mind that an expression which lacks clarity requires clarification but, in present case, the policy decision taken by the CBDT vide Instruction No. 1979 being very specific and explicit, it may not be proper to give a different view on the matter in the garb of clarification. If the CBDT is of the view that the earlier instructions contained an unintended error, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s High Court in the case of CWT v. S. Annamalai [2002] 258 ITR 675. No doubt the Circulars issued by the CBDT are not binding on the Courts and Tribunals but it is the duty of the Court to see to it that the instructions, which are binding upon the revenue authorities, being issued in exercise of their powers under section 119 of the Act, are followed by them. In this connection, it would be relevant to extract the observations of Hon ble Supreme Court in the case of Union of India v. Azadi Bachao Andolan [2003] 263 ITR 706. "If, in the teeth of this clarification, the Assessing Officer chose to ignore the guidelines and spent their time, talent and energy on inconsequential matters, we think that the CBDT was justified in issuing ..... X X X X Extracts X X X X X X X X Extracts X X X X
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