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TMI Blog2018 (7) TMI 2171X X X X Extracts X X X X X X X X Extracts X X X X ..... matter was remanded back to this Court by orders of the Hon ble Supreme Court by a common order passed in some Civil Appeals, including the lead Civil Appeal No.16815 of 2017 @ SLP (C) No.1425 of 2014 (THE COMMISSIONER OF INCOME TAX, BANGALORE-I ANOTHER vs. M/S.GEMINI DISTILLERIES) reported in (2017) 398 ITR 343 decided on 12.10.2017, but the said order of the two judges Bench of Hon ble Supreme Court in the case of M/s. Gemini Distilleries (supra) came to be explained by a later decision of the Hon ble Supreme Court in the case of DIRECTOR OF INCOME-TAX vs. S.R.M.B. DAIRY FARMING (P.) LTD. reported in (2018) 400 ITR 9 (SC) decided on 23.11.2017 about the retrospective application of the CBDT Circulars with regard to monetary limits for maintaining the pending appeals before the Hon ble High Court under Section 260A of the Income Tax Act. The Hon ble Supreme Court in S.R.M.B.Dairy Farming (P.) Ltd. (supra) held as under:- Appeal to High Court Monetary limits for litigation by Department Circular to apply to pending appeals but Circular not to be applied by court ipsofacto when matter has cascading effect or where common principles involved in large number of matters ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tur to the observations made by the Karnataka High Court in a detailed analysis in Ranka and Ranka case (supra), which was dealt with the litigation policy philosophy behind applying the circular and the benefit being extended in view thereof to all assesses where appeals have been pending, but below the financial limit, as otherwise an anomalous situation would arise. 24. We may also take note of the judgment of this court in Suchitra Components Ltd. v. CCE on the general principle of application of circulars. Reliance was placed on the view expressed in CCE v. Mysore Electricals Industries Ltd. opining that a beneficial circular has to be applied retrospectively while an oppressive circular has to be applied prospectively. 25. We are of the view that the mater needs to be put to rest and a clarity be obtained in view of the impact of this issue on pending cases before the High Courts as well as the cases which have been disposed of by various High Courts by applying Circular of 2011 to pending litigations. In our view the matter has been squarely put to rest taking further care of the interest of the Revenue by the order passed by the three-Judges Bench of this court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1,00,00,000 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 ). Further, tax effect shall be tax including applicable surcharge and cess. However, the tax will not include any interest thereon, except where chargeability of interest itself is in dispute. In case the chargeability of interest is the issue under dispute, the amount of interest shall be the tax effect. In cases where returned loss is reduced or assessed as income, the tax effect would include notional tax on disputed additions. In case of penalty orders, the tax effect will mean quantum of penalty deleted or reduced in the order to be appealed against. 5. The Assessing Officer shall calculate the tax effect separately ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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 Pr. Commissioner of Income-tax/ Commissioner of Income Tax 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 Circular . 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. 8. 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 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n on merits of a particular case. 12. It is clarified that the monetary limit of ₹ 20 lakhs for filing appeals before the ITAT would apply equally to cross objections under section 253(4) of the Act. Cross objections below this monetary limit, already filed, should be pursued for dismissal as withdrawn/ not pressed. Filing of cross objections below the monetary limit may not be considered henceforth. Similarly, references to High Courts and SLPs/appeals before Supreme Court below the monetary limit of ₹ 50 lakhs and ₹ 1 Crore respectively should be pursued for dismissal as withdrawn/ not pressed. References before High Court and SLPs/ appeals below these limits may not be considered henceforth. 13. This Circular will apply to SLPs/appeals/cross objections/references to be filed henceforth in SC/HCs/Tribunal and it shall also apply retrospectively to pending SLPs/ appeals/cross objections/references. Pending appeals below the specified tax limits in para 3 above may be withdrawn/not pressed. 14. The above may be brought to the notice of all concerned. 15. This issue under Section 268A of the Income-tax Act 1961. 16. Hindi version will follow. Sd/ ..... X X X X Extracts X X X X X X X X Extracts X X X X
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