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TMI Blog2011 (3) TMI 753X X X X Extracts X X X X X X X X Extracts X X X X ..... was prevalent when the instant appeals were filed. Naturally, in cases where returns were filed and/or assessed at loss, there was no tax effect. That is the position in these appeals also. However, clarification dated May 15, 2008 was issued by the Board clarifying the meaning which is to be assigned to "tax effect". As per this circular, even in loss cases, "notional tax effect" is to be taken into account. Paragraph 11 of the circular stated that it would apply to appeals filed after the date of circular. 2. These appeals pertain to the period before this clarification dated May 15, 2008 was issued. Taking refuge under paragraph 11, the learned counsel for the assessee has questioned the maintainability of these appeals pre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d as per the prevailing instructions as on the date of filing of these appeals, the actual tax effect and not the notional tax effect was taken into consideration. It was, thus, argued that in the instant appeals, where the assessment resulted in losses even after disallowance of certain expenditure, and there was no actual tax effect in the year in question, the appeals were not maintainable as appeals could be filed in this court only in those cases where the actual tax effect was Rs.4 lakhs. The learned counsel relied upon the judgment of this court in CIT v. Nanak Ram [2009] 317 ITR 302 (Delhi) where the view taken in CIT v. Pradeep Kumar Gupta [2008] 303 ITR 95 (Delhi) was followed and appeals were dismissed in exactly the same circums ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efore May 15, 2008, will be governed by the earlier instructions on this subject, operative at the time when such appeal was filed. In the present case, the appeal was filed in the year 2005 before the Income-tax Appellate Tribunal and it was dismissed on November 30, 2007, as not maintainable. These instructions came much thereafter, and in view of paragraph 11 thereof, has no applicability to the case. The Income-tax Appellate Tribunal, therefore, rightly dismissed the appeal as nonmaintainable." 5. On the other hand, a perusal of the order passed in P. S. Jain and Co. [2011] 335 ITR 591 (Delhi) would show that the Division Bench of this court followed the judgment of the Madhya Pradesh High Court in CIT v. Ashok Kumar Manibhai Pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roceeding with the old references wherein the tax impact is minimal. Thus, there is no justification to proceed with decades old references having negligible tax effect." 6. The question that arises is as to whether there is a conflict between the two sets of judgments. Though, at first blush it appears to be so. But when we examine the matter at a deeper level having the proper perspective in mind, we do not find any conflict. 7. It is a matter of record that the Central Board of Direct Taxes has been issuing circulars from time to time whereby instructions are given to the officers of the Income-tax Department not to file references/appeals when the tax effect is less than the one prescribed/stipulated in those circulars. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... adopt uniformity in approach while filing appeals by the field formation, it is hereby clarified by the Board that the words 'monetary limit' and 'tax effect' in the aforesaid instruction be read as 'revenue effect' which denotes the amount of tax, interest, penalty, fine or any other sum involved. This instruction is clarificatory in nature and will apply to litigation under other direct taxes also, e.g., wealth-tax, gift-tax, estate duty, etc." 10. In the year 2008, vide Instruction No. 5 of 2008 dated May 15, 2008 (with which we are concerned), the Board further clarified the meaning which was to be assigned to "tax effect". As per this circular it was stipulated that in all loss cases, notional tax effect is to be taken into acc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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