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TMI Blog2016 (5) TMI 112X X X X Extracts X X X X X X X X Extracts X X X X ..... ssued by the Central Board of Direct Taxes(CBDT) would also apply to the pending Reference made under Section 256 (1) of the Act. At this, Mr. Suresh Kumar pointed out that a bare reading of the Circular dated 10th December 2015 would indicate that it applies only to pending appeals as it does not make any mention of References under Section 256(1) of the Act. However, we pointed out to Mr. Suresh Kumar that on an identically worded Instruction No. 5 of 2015 issued by the CBDT(where also References under Section 256 of the Act are not mentioned), we have held that it applies even to pending References under Section 256(1) of the Act in CIT v/s. M/s. Computer Point (I) Ltd. (Income Tax Reference No. 430/1997) decided on 24 July 2015. In the above context Mr. Suresh Kumar requested that the hearing of this Reference be kept back to 3.00 p.m. so as to enable him to obtain instructions with regard to the stand of the Department in relation to application of the Circular No. 21/2015 dated 10 December 2015 issued by the CBDT to pending References under Section 256 of the Act. Thus at the request of Mr. Suresh Kumar we kept the hearing of this Reference at 3.00 P.M. to enable him to obtai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t) Government of India Ministry of Finance Department of Revenue Central Board Direct Taxes New Delhi the 10th December, 2015. Subject:Revision of monetary limits for filing of appeals by the Department before Income Tax, Appellate Tribunal and High Courts and SLP before Supreme Court - measures for reducing litigation - Reg. Reference is invited to Board's instruction No.5/2014 dated 10.07.2014 wherein monetary limits and other conditions for filing departmental appeals (in Income Tax matters) before Appellate Tribunal and High Courts and SLP before the 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 and High Courts and SLP before the Supreme Court keeping in view the monetary limits and conditions specified below. 3 Henceforth, appeals/ SLPs shall not be filed in cases where the tax effect does not exceeds the monetary limits given hereunder: S No. Appeals in Income Tax matters Monetary Limit (in Rs.) 1 Before Appellate Tribunal 10,00,000/ 2 Before High Court 20,00,000/ 3 Before Supreme Court 25,00,000/ It is clarifie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pecified above, the Commissioner of Income Tax shall specifically record that "even though the decision is not acceptable, appeals 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 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 assessee 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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n about nonfiling of appeals to the High Court where tax effect is less than Rs. 20 lacs and that it would apply retrospectively even in respect of pending appeals which would not be pressed. The above Circular of 10 December 2015 is focused only on appeals under the Act and does not make any mention of References under Section 256 of the Act as after the introduction of statutory appeals in 1998 under Section 260A of the Act there are no References under Section 256 of the Act being made to this Court from the orders of the Tribunal passed after 1998. Therefore now there are no References being filed in the Court under Section 256 of the Act and thus the Circular does not deal with the same. Moreover as pointed out earlier in this order, this Court in M/s. Computer Point (I) Ltd. (supra) interpreting the earlier circular/instructions No.5 dated 10th July, 2014 (no mention as in this Circular about References) issued by the CBDT, has held that it would apply also to pending references. The aforesaid view has been followed by us in Income Tax Reference No. 419 of 1995 (CIT v/s. M/s. Dempo Mining Corporation Ltd.) and Income Tax Reference No. 214 of 1996 (CIT v/s. M/s. Sanrit Hotel, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not specifically refer to References just as the instruction No.5 of 2014, it should apply even to pending References under Section 256 of the Act. This is so as the entire objective of the Circular in having been made retrospective is that the Court should concern itself with grievances of the Revenue having substantial financial stake in terms of the tax involved and normally the decision of the Tribunal up to the value of Rs. 20 lacs even if it is adverse to the Revenue should be accepted. The Circular in paragraph 6 thereof protects the interest of the Revenue by providing that where it does not pursue appellate remedies in view of the low tax effect as provided therein, it would not be held against the Revenue for any other Assessment year in respect of the same Assessee or even in respect of any other Assessee , if the tax effect involved in those cases is higher than the threshold limits specified in the Circular. 7 One feature in support of the submission that the Circular be not applied to References could be that the References are opinions sought by the Tribunal on questions of law from this Court unlike statutory appeals filed by the parties, seeking the view of the Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appeals filed by the Revenue, are awaiting disposal. It thus appears that appeals are being filed by the Revenue from almost every order of the Tribunal adverse to it, without taking into account the tax effect involved with the fear that in other cases where tax effect is more, the nonfiling of an appeal may be used against the department as having accepted the position in law. It is in that view that the Circular of 2015 clarifies that non filing of appeal in view of low tax effect will not be used against the Revenue in other appeals. Therefore the CBDT to ensure that there is uniformity in respect of filing of appeals has fixed threshold limits which would do away with the discretion of the officer to file and pursue the appeal remedy where the tax effect is less than the minimum amounts specified. It is noteworthy that the Circular specifically provides that where the tax effect is higher than that specified in the Circular then the filing of appeal in such cases is to be decided on the merits of the case. Therefore, to enable the Revenue to focus on matters where the tax implication is above Rs. 20 lacs only such matters should be agitated in appeal before the High Court acc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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