9911796707
TMI Blog2015 (1) TMI 1153X X X X Extracts X X X X X X X X Extracts X X X X ..... filed by the appellant at the time of filing the original return of income. Though the appellant did not file the audit report along with the original return, the same was filed at the time of filing the return. I find force in the argument of the appellant that there is no such provision in the I.T. Act, wherein it is stated that the audit report and other related documents cannot be furnished along with the revised return of income. In my opinion, the A.O. should have taken note of the details furnished by the appellant before rejecting the claim of deduction u/s. 80I of the I.T. Act. In view of the facts narrated above and by following various case laws as relied upon by the appellant, I hold that the disallowance of deduction made by the A.O., u/s. 80IA of the Act is not justified and he is directed to allow the same." 3. At the outset, learned AR representing the respondent-assessee has submitted before us a working sheet of the tax effect involved in these three years, placed on record, according to which for A.Y. 2002-03 the tax effect was Rs. 1,19,278/-, for A.Y. 2003-04 Rs. 2,54,058/- and for A.Y.2004-05 the tax effect was Rs. 2,82,832/-. On account of the low tax effect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that by passage of time money value has gone down, the cost of litigation expenses has gone up, the assessees on the file of the Departments have been increased consequently, the burden on the Department has also increased to a tremendous extent. The corridors of the superior courts are chocked with huge pendency of cases. In this view of the matter, the Board has rightly taken a decision not to file references if the tax effect less than Rs. 2 lakhs. The same policy for old matters needs to be adopted by the Department. In our view, the Board's circular dated March 27, 2000 is very much applicable even to the old references which are still undecided. The Department is not justified in proceeding with the old references wherein the tax impact is minimal. Thus, there is no justification to proceeds with decades old references having negligible tax effect." Similarly, Hon'ble Gujarat High Court in the case of CIT v. Sureshchandra Durgaprasad Khatod (HUF) (2012) 253 CTR 492 (Guj) has specifically considered instruction No. 3/2011 and held that the same would apply to pending cases as well even though there was a specific condition in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r to 15th May, 2008, if they involved a substantial question of law of a recurring nature, notwithstanding the fact that the total cumulative tax effect involved in the appeals was less than Rs. 4 Lacs. It was submitted, such appeals which were filed prior to the issuance of Instruction and where substantial questions of law were raised, were required to be decided on merits. The Court, while considering the issue observed that paragraph 5 of the Circular made it clear that no appeals would be filed in the cases involving tax effect less than Rs. 4 Lacs notwithstanding the issue being of recurring nature. Relying on the judgement in CIT V/s Polycott 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 reve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uction of 9th February, 2011. 14. Similarly, the Delhi High Court in the case of "Commissioner of Income Tax V/s Delhi Race Club Ltd.", decided on March 03, 2011, by relying on its earlier Judgement "Commissioner Income Tax Delhi-III V/s M/s P.S. Jain and Co. decided on 2nd August, 2010 has held that the CBDT circular raising the monetary limit of the tax effect to Rs. 10 Lacs would be applicable to pending cases also. 17. It is true that this judgement in Chhajer's case (supra) was not brought to the notice of the Division Bench, while deciding either Madhukar's case (supra) or the case of Polycot Corporation (supra). However, the instruction of 2005 which was considered in Chhajer's case has also been interpreted in Polycot Corporation (supra). The consistent view of the Court has been that the CBDT instruction would apply to pending cases as 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 main ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... filed on merits before Appellate Tribunal, High Courts and Supreme Court keeping in view the monetary limits and conditions specified below. 3. Henceforth appeals shall not be filed in cases where the tax effect does not exceed the monetary limits given hereunder:- S No. Appeals in Income-tax matters Monetary Limits (in Rs) 1 Before Appellate Tribunal 4,00,000/- 2 U/s 260A before High Court 10,00,000/- 3 Before Supreme Court 25,00,000/- It is clarified that an appeal should not be filed merely because the tax effect in a case exceeds the monetary limits prescribed above. Filing of appeal in such cases is to be decided on merits of the case. 4. For this purpose, "tax effect" means the difference between the tax on the total income assessed and the tax that would have been chargeable had such total income been reduced by the amount of income in respect of the issues against which appeal is intended to be filed (hereinafter referred to as "disputed issues"). However the tax will not include any interest thereon, except where chargeability of interest itself ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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 Bard, whereby an assessee has claimed relief from the Tribunal or the Court only on the ground that the Department has implicitly accepted the decision of the Tribunal or Court in the case of the assessee for any other assessment year or in the case of any other case for the same or any other assessment year, by not filing an appeal on the same disputed issues. The Departmental representatives/counsels must make every effort to bring to the notice of the Tribunal or the Court that the appeal in such cases was o tiled or not admitted only for the reason of the tax effect being less than the specified monetary limit and, therefore, no inference should be drawn that the decisions rendered therein were acceptable to the Department. Accordingly, they should impress upon the Tribunal or the Court that such cases do not have any precedent value. As the evidence of not filing appeal due to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under Section 268A (1) of the Income-tax Act 1961." 5. On query from the Bench, the Ld. DR could not point out any of the exceptions as provided in the Circular as under: (a) that this is a loss case having tax effect more than the prescribed limit, which should be taken into account, (b) that this is a composite order for many assessment years where tax effect will be more than the prescribed limit as per para 5 of above instructions, (c) that this is a case, where, in the case of revenue, where constitutional validity of the provision of the Act or I.T. Rules 1962 are under challenge, (d) that Board's order, Notification, Instruction or Circular has been held to be illegal or ultra vires, (e) that Revenue Audit Objection in the case has been accepted by the Department and the same is under challenge." 6. The Ld. DR could not point out any of the exceptions as provided above. Accordingly, this being a low tax effect case, we dismiss the ap ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
