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TMI Blog2014 (4) TMI 971X X X X Extracts X X X X X X X X Extracts X X X X ..... 2011 or 2008 as regards the applicability of those instructions in respect of the appeals and it has also been made clear that if those appeals are not filed after the given dates mentioned in those instructions, the fate of the appeals will be governed in accordance with the instructions prevailing on the date of presentation of such appeals – thus, it could not be held that even if an appeal is filed prior to 9th February 2011, the same would be barred notwithstanding the fact that at the time of filing such appeal, the same was not barred by the then instructions of the CBDT. It simply enables CBDT from time to time, to issue orders, instructions or directions to other income-tax authorities, fixing such monetary limits as it may deem fit, for the purpose of regulating filing of appeal or application for reference by any income-tax authority under the provisions of the concerned Chapter. From the language of the enabling provisions of the statute, it is clear that no power has been conferred to the CBDT to make the pending appeals or references filed in accordance with the then existing law infructuous by issuing any such direction or instruction with retrospective effect – the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CBDT in its instructions of 2011, which was in force on the date when the appeal came up for hearing, i.e. 12th September 2012. 3.3 The learned counsel appearing on behalf of the assessee tried to convince the Division Bench that although at the time of filing of the appeal, the limits prescribed by the Board in its instructions of 2008 applied and in accordance with such provisions, the appeal was maintainable at the time of filing of the appeal, the revised limits contained in the instructions of 2011 should be applied when the appeal is taken up for hearing after the passing of the revised instructions of 2011. In other words, according to the learned counsel appearing for the assessee, the revised limit contained in the instruction of 2011 would be applicable to all the pending appeals irrespective of the date of filing. 3.4 In support of such contention, the learned counsel appearing on behalf of the assessee relied upon a decision of the Division Bench of this Court dated 24th August 2012 in the case of the Commissioner of Income tax v. Sureshchandra Durgaprasad Khatod (HUF) in Tax Appeal No.1404/2010. In the said decision, the Division Bench, by relying upon a decision of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment year. (3) Notwithstanding that no appeal or application for reference has been filed by an income-tax authority pursuant to the orders or instructions or directions issued under subsection (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 subsections (2),(3) and (4) shall apply accordingly." 5.1 We also quote below the CBDT instructions of 2008 and 2011 respectively:- Instructions of 2008 reads as under:- "Instruction No. 05/2008 F. No.279/Misc.142/2007-ITJ G ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d issues exceeds the monetary limited specified in para 3. No appeal shall be filed in respect of an assessment year or years in which the tax effect is less than the monetary limit specified in para 3. In other words, henceforth, appeals will be filed only with reference to the tax effect in the relevant assessment year. However, in case of a composite order of any High Court or appellate authority, which involves more than one year, appeal shall be filed in respect of all assessment years even if the "tax effect" is less than the prescribed monetary limits in any of the year(s), if it is decided to file appeal in respect of the year(s) in which 'tax effect' exceeds the monetary limit prescribed. 6. In a case where appeal before a Tribunal or a Court is not filed only on account of the tax effect being less than the monetary limit specified above, the Commissioner of Incometax shall specifically record that "even though the decision is not acceptable, appeal is not being filed only on the consideration that the tax effect is less than the monetary limit specified in this instruction". Further, in such cases, there will be no presumption that the Income - T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1961. Yours faithfully, sd/- (Madhukar Kumar Bhagat) Deputy Secretary to the Govt. of India." Instructions of 2011 are quoted below: "Instruction No. 3/2011 F. No.279/Misc.142/2007-ITJ Government of India Ministry of Finance Department of Revenue Central Board of Direct Taxes ********* New Delhi, the 9th of February 2011 To All Chief Commissioners of Income-Tax and All Directors General of Income- Tax. Subject : Revision of Monetary limits for filing appeals by the Department before Income Tax Appellate Tribunal, High Courts and Supreme Court - measures for reducing litigation - Reg. Sir/Madam, Reference is invited to Board's instruction No.5/2008 dated 15/05/2008, wherein monetary limits and other conditions for filing departmental appeals (in Income-tax matters) before Appellate Tribunal, High Courts and Supreme Court were specified. 2. In supersession of the above instruction, 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. 3. Hence forth appeals shall not be filed in cases where the tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which 'tax effect' exceeds the monetary limit prescribed. In case where a composite order/judgment involves more than one assessee, each assessee shall be dealt with separately. 6. In a case where appeal before a Tribunal or a Court is not filed only on account of the tax effect being less than the monetary limit specified above, the Commissioner of Incometax shall specifically record that "even though the decision is not acceptable, appeal is not being filed only on the consideration that the tax effect is less than the monetary limit specified in this instruction". Further, in such cases, there will be no presumption that the Income - Tax Department has acquiesced in the decision on the disputed issues. The Income-tax Department shall not be precluded from filing an appeal against the disputed issues in the case of the same assessee for any other assessment year, or in the case of any other assessee for the same or any other assessment year, if the tax effect exceeds the specified monetary limits. 7. In the past, a number of instances have come to the notice of the Board, whereby an assessee has claimed relief from the Tribunal or the Court only on the ground tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s instruction will apply to appeals filed on or after 9th February 2011. However, the cases where appeals have been filed before 9th of February 2011 will be governed by the instructions on this subject, operative at the time when such appeal was filed. 12. This issues under Section 268 A (1) of the Income-tax Act 1961. Yours faithfully, sd/- (A.K. Bharadwaj) Under Secretary to the Government of India (ITJ-II), CBDT (Emphasis supplied by us). 6. After hearing Mr. Bhatt, the learned Senior Advocate appearing on behalf of the Revenue and Mr. Soparkar, the learned Senior Advocate, appearing on behalf of the Assessee and after going through the aforesaid provisions of Section 268A of the Income Tax Act as well as the instructions of 2008 and instructions of 2011, we find that those two instructions having been issued by the CBDT in exercise of powers conferred under section 268A of the IT Act, those instructions are really pieces of delegated legislation and consequently, have the force of law. 7. It is now well-settled law that if the language employed in a piece of legislation is clear and unambiguous, it is not for the Court to interpret the same in a different way simply b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . C.I.T. 2004 (9) SCC 686 : (AIR 2004 SC 4552 : 2004 AIR SCW 3692), the language employed in a statute is the determinative factor of the legislative intent. The legislature is presumed to have made no mistake. The presumption is that it intended to say what it has said. Assuming there is a defect or an omission in the words used by the legislature, the Court cannot correct or make up the deficiency, vide Delhi Financial Corporation v. Rajiv Anand, 2004 (11) SCC 625. Where the legislative intent is clear from the language, the Court should give effect to it, vide Government of Andhra Pradesh v. Road Rollers Owners Welfare Association, 2004 (6) SCC 210, and the Court should not seek to amend the law in the garb of interpretation. 17. As stated by Justice Frankfurter of the U.S. Supreme Court (see 'Of Law and Men: Papers and Addresses of Felix Frankfurter'): "Even within their area of choice the courts are not at large. They are confined by the nature and scope of the judicial function in its particular exercise in the field of interpretation. They are under the constraints imposed by the judicial function in our democratic society. As a matter of verbal recognition ce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n Chemicals Ltd. v. C.I.T., 2003(5) SCC 590. 23. It is only where the provisions of a statute are ambiguous that the Court can depart from a literal or strict construction vide Narsiruddin v. Sita Ram Agarwal, AIR 2003 SC 1543 : (2003 AIR SCW 908). Where the words of a statute are plain and unambiguous effect must be given to them vide Bhaiji v. Sub-Divisional Officer, Thandla, 2003(1) SCC 692. 24. No doubt in some exceptional cases departure can be made from the literal rule of the interpretation, e.g. by adopting a purposive construction, Heydon's mischief rule, etc. but that should only be done in very exceptional cases. Ordinarily, it is not proper for the Court to depart from the literal rule as that would really be amending the law in the garb of interpretation, which is not permissible vide J.P. Bansal v. State of Rajasthan and Anr., AIR 2003 SC 1405 : (2003 AIR SCW 1848), State of Jharkhand and Anr. v. Govind Singh, JT 2004 (10) SC 349 : (AIR 2005 SC 294 : 2004 AIR SCW 6799) etc.. It is for the legislature to amend the law and not the Court vide State of Jharkhand and Anr. v. Govind Singh, JT 2004(10) SC 349. In Jinia Keotin v. K.S. Manjhi, 2003 (1) SCC 730, this Cour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the words of a statute must prima facie be given their ordinary meaning. It is yet another rule of construction that when the words of the statute are clear, plain and unambiguous, then the Courts are bound to give effect to that meaning, irrespective of the consequences. It is said that the words themselves best declare the intention of the law-giver. The Courts are adhered to the principle that efforts should be made to give meaning to each and every word used by the legislature and it is not a sound principle of construction to brush aside words in a statute as being inapposite surpluses, if they can have a proper application in circumstances conceivable within the contemplation of the statute". 31. The same view has been taken by this Court in S. Mehta v. State of Maharashtra, 2001 (8) SCC 257: (AIR 2001 SC 3774: 2001 AIR SCW 3492) (vide para 34) and Patangrao Kaddam v. Prithviraj Sajirao Yadav Deshmugh, AIR 2001 SC 1121: (2001 AIR SCW 871). 32. The literal rule of interpretation really means that there should be no interpretation. In other words, we should read the statute as it is, without distorting or twisting its language. 33. We may mention here that the lit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eal, the same was not barred by the then instructions of the CBDT. 12. As regards the decision of a Division Bench of this Court dated 24th August 2012 in the case of Sureshchandra Durgaprasad Khatod (HUF) (supra) (Tax Appeal No. 1404 of 2010), it appears that the said Division Bench, in arriving at a different conclusion solely relied upon a Division Bench decision dated 29th July 2011 of the Aurangabad Bench of the Bombay High Court in Tax Appeal No. 78 of 2007 in the case of the Commissioner of Income Tax v. Smt. Vijaya V. Kavekar. In the said case, the said Division Bench, after considering the earlier instructions and relying upon a decision of the Bombay High Court in the case of Commissioner of Income Tax v. Madhukar K. Inamdar [HUF] reported in (2010) 229 CTR (Bom) 77, arrived at the following conclusion, which was relied upon by the Division Bench of this Court:- 6. The question about applicability of Instruction No. 3 of 2011 had been considered and decided by the Aurangabad Bench of the Bombay High Court in Tax Appeal No. 78 of 2007, The Commissioner of Income Tax v. Smt. Vijaya V. Kavekar decided on 29.7.2011. The Division Bench, after considering earlier Instructions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ott Corporation, the Court observed as follows: "6 The aforesaid judicial verdict makes it clear that the circular dt. 15th may, 2008 in general and para (5) thereof in particular lay down that even if the same issue, in respect of same assessee, for other assessment years is involved, even then the Department should not file appeal, if the tax effect is less than Rs. 4 Lakhs. In other words, even if the question of law is of recurring nature even then, the Revenue is not expected to file appeals in such cases, if the tax impact is less than the monetary limit fixed by the CBDT." 7. One fails to understand how the Revenue, on the face of the above clear instructions of the CBDT, can contend that the circular dt. 15th May, 2008 issued by the CBDT is applicable to the cases filed after 15th May, 2008 and in compliance thereof, they do not file appeals, if the tax effect is less than Rs. 4 Lakhs; but the said circular is not applicable to the cases filed prior to 15th May, 2008 i.e. to the old pending appeals, even if the tax effect is less than Rs. 4 Lakhs. In our view, there is no logic behind this belief entertained by the Revenue." The Court has further held that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... well. The main objective of such instructions is to reduce the pending litigation where the tax effect is considerably small. Therefore, in our opinion, the tax appeals are required to be dismissed, as they are not maintainable in view of the provisions of Section 268A of the Income Tax, and the CBDT Instruction No. 3 of 2011." 13. With great respect to the Division Bench of this Court in the case of The Commissioner of Income Tax vs. Sureshchandra Durgaprasad Kathod [HUF] (Tax Appeal No. 1404 of 2010) as well as of the Division Bench of the Bombay High Court and other High Courts quoted above, we are unable to agree with the view taken therein because in those decisions, the well-settled principle laid down by the Supreme Court relating to literal construction, as reiterated in the case of B. Premchand vs. Mohan Koikal reported in AIR 2011 SC 1925, extensively quoted by us, was not followed. 14. In our opinion, in the absence of any ambiguity, there is no scope of interpreting the said provision in a different way by ignoring the literal meaning of the words used in the said delegated statutory provisions. As pointed out by the Supreme Court, where the language is clear, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... effect to the rules, thus made, unless satisfied that all the conditions precedent to the validity of the rules have been fulfilled (see Craies on Statute Law, p. 297 (Sixth Edition)." (Emphasis supplied by us). 17. Similar observations have been made by the Supreme Court in the case of The Income-tax Officer, Alleppey, v. 1. M. C. Ponnoose and others, (In C. A. No. 942 of 1966), 2. Excel Productions Alleppey and others, (In C. A. No. 943 of 1966) reported in AIR 1970 SC 385 as quoted below: "Now it is open to a sovereign legislature to enact laws which have retrospective operation. Even when the Parliament enacts retrospective laws such laws are-in the words of Willes, J. in Phillips v. Eyre, (1870) 40 LJ QB 28 at p. 37-"no doubt prima facie of questionable policy, and contrary to the general principle that legislation by which the conduct of mankind is to be regulated ought, when introduced for the first time, to deal with future acts, and ought not to change the character of past transactions carried on upon the faith of the then existing law." The courts will not, therefore, ascribed retrospectively to new laws affecting rights unless by express words or ..... X X X X Extracts X X X X X X X X Extracts X X X X
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