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TMI Blog2012 (10) TMI 149X X X X Extracts X X X X X X X X Extracts X X X X ..... n paragraph 11 thereof that this instructions will apply to appeals filed on or after 9th February 2011. Thus the view adopted by this Court in case of Sureshchandra Durgaprasad Khatod (HUF) (2012 (9) TMI 20 - GUJARAT HIGH COURT) requires reconsideration as the instructions of 2011 provide revised monetary limits permitting the Revenue to file appeals before the Tribunal, High Court and Supreme Court. Paragraph 11 thereof clearly provides that such instructions will apply to appeals filed on or after 9th February 2011. It is further made clear that cases where appeals have been filed before 9th February 2011 will be governed by the instructions on the subject operative at the time when such appeal was filed. Any other interpretation to make the instructions of 2011 applicable to all pending appeals would not be permissible and would be doing violation to the plain language used in the instructions. These provisions contained in the instructions of 2011 have not been given due weightage in Sureshchandra Durgaprasad Khatod case above. Thus case is to be placed before Hon'ble Chief Justice for constituting a Bench for answering the reference. - TAX APPEAL NO. 2213 OF 2010 - - - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nding appeals. Counsel submitted that independent of the said decision of this Court in case of Sureshchandra Durgaprasad Khatod (HUF) (supra), the instructions of 2011 should be held applicable to all pending cases. He supported said contention on following arguments : (i) The Government of India published National Litigation Policy issued by the Ministry of Law and Justice. Paramount consideration was to reduce delay and pendency. The instructions of the Board should be interpreted in tune with such policy. (ii) If the instructions of 2011 are applied only prospectively, the same would lead to absurd situation. For example, in case of the same assessee, the appeal may be terminated as non maintainable since the same may have been filed after the cut-off date whereas for earlier years appeals of the same assessee raising identical questions may be entertained only on the ground that such appeal was filed prior to issuance of the instructions of 2011. According to the counsel, such interpretation which would lead to anomalous and absurd situation should be avoided. (iii) Counsel also submitted that various High Courts have taken a view that the instructions of 2011 will ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er sub-section (1), it shall not be lawful for an assessee, being a party in any appeal or reference, to contend that the income-tax authority has acquiesced in the decision on the disputed issue by not filing an appeal or application for reference in any case. (4) The Appellate Tribunal or Court, hearing such appeal or reference, shall have regard to the orders, instructions or directions issued under sub-section (1) and the circumstances under which such appeal or application for reference was filed or not filed in respect of any case. (5) Every order, instruction or direction which has been issued by the Board fixing monetary limits for filing an appeal or application for reference shall be deemed to have been issued under sub-section (1) and the provisions of sub-sections (2), (3) and (4) shall apply accordingly.]." 7. Even before the introduction of section 268A in the Act, the Board had been issuing instructions from time to time to govern filing of appeals by the Revenue before the Tribunals, High Courts and Supreme Court principally with a view to limiting appeals involving low tax effect and to filter out frivolous appeals of the Revenue. With introduction of section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erative at the time when such appeals were filed. (D) In the instructions of 2011, the monetary limits were revised to Rs. 3 lac for appeal to Tribunal, Rs.10 lac for appeal or reference to the High Court and Rs.25 lac for appeal to the Supreme Court. Paragraph 8 of the instructions provided for exceptions where appeals could be presented irrespective of tax effect and reads as under : "8. Adverse judgments relating to the following issues should be contested on merits notwithstanding that the tax effect entailed is less than the monetary limits specified in para 3 above or there is no tax effect. (a) Where the Constitutional validity of the provisions of an Act or Rule are under challenge, or (b) Where Board's order, Notification, Instruction or Circular has been held to be illegal or ultra vires, or (c) Where Revenue Audit objection in the case has been accepted by the Department." Paragraph 11 contained a similar provision as in case of instructions of 2008 and provided as under : 11. This instructions will apply to appeals filed on or after 9th February 2011. However, the cases where appeals have been filed before 9th February 2011 will be governed by the inst ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f circular under section 268A as already mentioned is only to govern monetary limit for filing of the appeals. There is no scope for reading the circular as being applicable to pending appeals. Even Hon'ble the Bombay High Court held that the circular was not retrospective. It only observed that having regard to the falling money value and choking Court docket, policy of monetary limit was needed to be adopted for pending matters. The document referred to as circular dated 5.6.2007, in our view, has not been properly appreciated. It only says that the department was not following instructions as to monetary limit while filing the appeals and should examine whether pending appeals which did not conform to prescribed monetary limit should be withdrawn. The said memorandum was purportedly issued on a direction of the High Court and was applicable only to cases pending in Bombay High Court. The same cannot be read to mean that in all High Courts, all pending appeals were to be examined in the light of monetary limit applicable on the date of hearing and not on the date of filing." (c) Issue also came up before Chhattisgarh High Court in case of Commissioner of Income-tax v. Navbhara ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pending cases. (b) In case of Commissioner of Income-tax v. Polycott Corporation reported in [2009] 318 ITR 144(Bom), the Bombay High Court held that the instructions of 2008 would apply to pending cases also. We may however, notice that in such decision the High Court did not notice or at any rate did not refer to paragraph 11 of the instructions which made applicability thereof specifically prospective. Applicability or otherwise of the instructions to the pending appeals could not have been decided without having regard to paragraph 11 of the instructions. (c) In case of Madhukar K. Inamdar (HUF) (supra) reported in 318 ITR 149, the Bombay High Court following the decision in case of Polycott Corporation (supra) and further placing reliance on section 268A of the Act held that the instructions of 2008 would apply to all pending cases. Once again we may record that in such decision, paragraph 11 of the instructions does not appear to have been noticed, at any rate such paragraph is not referred. With profound respect therefore, such decision in our view was rendered without giving due weightage to the specific language of paragraph 11 of the instructions of 2008. (d) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er 9th February 2011. It is further made clear that cases where appeals have been filed before 9th February 2011 will be governed by the instructions on the subject operative at the time when such appeal was filed. Any other interpretation to make the instructions of 2011 applicable to all pending appeals, in our opinion, would not be permissible and would be doing violation to the plain language used in the instructions. In fact the instructions of 2011 in paragraph 2 itself starts with an expression "In supersession of the above instructions, it has been decided by the Board that departmental appeals may be filed on merits before Appellate Tribunal, High Courts and Supreme Court keeping in view the monetary limits and conditions specified below." These instructions govern the filing of the appeals by the Revenue and were thus meant to limit the appeals arising after the cut-off date provided in the instructions. The language of paragraph 2 read with paragraph 11 plainly brings about the intention of the Board to limit the new appeals and not to terminate old appeals without consideration on merits. (2) These provisions contained in the instructions of 2011, in our opinion, hav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rther requires that Court should adopt natural and grammatical meaning used by the draftsman. Of-course, on certain well recognized principles such as on mischief rule or Heydon's rule, a deviation from such literal construction is not impermissible. It is also well recognized that if a particular interpretation leads to absurdity, the Court would avoid such an interpretation. Such a question would arise when it is possible to interpret a certain statute or terms of the document which is otherwise possible of two interpretations. When the language is plain, it is not open for the Court to reject the expression used by the draftsman and adopt some other interpretation not borne out from the plain language of the statute or the document. (5) Section 268A of the Act recognises statutorily the force of the Board's instructions to limit the appeals on certain grounds. In absence of such instructions, section 260A of the Act enables an aggrieved person including the Revenue to prefer an appeal before the High Court without any limitation of valuation. If restrictions are to be imposed on such statutory appeals, the same must be traced in the instructions issued by the Board under sect ..... X X X X Extracts X X X X X X X X Extracts X X X X
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