ITO, Ward - 1, Haldia, Purba Medinipur v. M/s. Haldia Enterprises, Purba Medinipur

IN THE INCOME TAX APPELLATE TRIBUNAL BENCH - A CALCUTTA ( ) BEFORE . . SHRI B.R.MITTAL JUDICIAL MEMBER. /AND . . SHRI C.D. RAO ACCOUNTANT MEMBER . / I.T.A.NO. 391/KOL/2010 / ASSESSMENT YEAR 2005 - 06 INCOME - TAX OFFICER WARD 1 HALDIA. - - - VERSUS - . M/S. HALDIA ENTERPRISE BANBISHNUPUR BALUGHATA PURBA MEDINIPUR. AADEH 8834 Q ( / A PPELLANT ) ( / RESPONDENT ) / FOR THE APPELLANT : / SHRI P.K.MISHRA DR / FOR THE RESPONDENT : NONE / ORDER . . SHRI B.R.MITTAL JUDICIAL MEMBER. THE DEPARTMENT HAS FILED THIS APPEAL FOR THE ASSESSMENT YEAR 2005 - 06 AGAINST ORDER OF THE LEARNED COMMISSIONER OF INCOME - TAX (APPEALS) DT.20.11.2009 DISPUTING THE DELETION OF ADDITION OF RS.5 LAKHS MADE BY THE ASSESSING OFFICER AS BOGUS UNSECURED LOAN. 2. NONE APPEARED ON BEHALF OF THE ASSESSEE. 3. A T THE TIME OF HEARING THE LEARNED DR CONCEDED THAT THE TAX EFFECT IN THE PRESENT APPEAL IS LESS THAN RS.2 LAKHS. THE ATTENTION OF THE LD. D.R. WAS DRAWN TO THE CIRCULAR NO.279/MISC. - 64/05 - ITJ DATED 24 - 10 - 2005 AND STATED THAT WHY THE APPEAL OF THE DEPARTME NT SHOULD NOT BE DISMISSED AS THE TAX EFFECT IN THE APPEAL FILED BY THE DEPARTMENT IS LESS THAN RS.2 LAKHS. 4. LD. D.R. IN HIS SUBMISSION DID NOT DISPUTE THE FACT THAT THE TOTAL TAX EFFECT IS LESS THAN RS.2 LAKHS AND SUBMITTED THAT THE ISSUE INVOLVED IN T HIS APPEAL GIVES RISE TO THE QUESTION OF LAW. HOWEVER THE LD. D.R. COULD NOT SUBSTANTIATE HIS SUBMISSION AS TO WHAT QUESTION OF LAW ARISES IN THE APPEAL FILED BY THE DEPARTMENT. WE HAVE CONSIDERED THE GROUNDS OF APPEAL IN THE LIGHT OF THE CBDT CIRCULAR NO . 279/MISC. - 64/05 - ITJ DATED 24 - 10 - 2005 READ WITH INSTRUCTION NO. 2/2005 DATED 24 - 10 - 2005. / I.T.A.NO.391/KOL/2010 2 5. WE FIND THAT THE CBDT VIDE INSTRUCTION NO. 2/2005 DATED 24.10.2005 ISSUES GUIDELINES TO THE REVENUE AUTHORITIES WITH REGARD TO FILING OF APPEAL BEFORE THE TRIBUN AL HIGH COURT AND THE SUPREME COURT. FROM THE ABOVE INSTRUCTION IT IS EVIDENT THAT SINCE 1987 THE CBDT HAS BEEN INSTRUCTING ITS OFFICERS NOT TO FILE THE APPEAL WHERE THE TAX EFFECT IS BELOW CERTAIN MONETARY LIMITS. VIDE INSTRUCTION NO. 1903 DATED 28.10. 1992 THE MONETARY LIMIT WAS REVISED UPWARD AND THE OFFICERS WERE DIRECTED NOT TO FILE APPEAL BEFORE THE INCOME TAX APPELLATE TRIBUNAL WHERE THE TAX EFFECT WAS BELOW RS.25 000/ - . THE ABOVE MONETARY LIMIT WAS FURTHER REVISED UPWARD BY INSTRUCTION NO. 1979 DAT ED 27.3.2000 AND THE OFFICERS WERE DIRECTED NOT TO FILE THE APPEAL TO ITAT WHERE THE TAX EFFECT IS BELOW RS.1 00 000/ - . THEREAFTER IN PARTIAL MODIFICATION OF THE ABOVE INSTRUCTION THE BOARD VIDE INSTRUCTION NO. 2/2005 DATED 24.10.2005 HAS FURTHER RAISED THE ABOVE MONETARY LIMIT TO RS.2 00 000/ - WITH THE SAME DIRECTIONS. THUS THE C.B.D.T. SINCE 1987 HAS NOT ONLY TAKEN A CONSISTENT APPROACH OF INSTRUCTING ITS OFFICERS FOR NOT FILING THE APPEAL WHERE THE TAX EFFECT IS BELOW THE MONETARY LIMIT BUT SUCH MONET ARY LIMIT IS ALSO REVISED UPWARD FROM TIME TO TIME. THE CIRCULAR UNDER INSTRUCTION NO.1979 DATED 27 - 3 - 2000 WAS CONSIDERED BY THE BOMBAY HIGH COURT IN THE CASE OF CAMCO COLOUR CO. 254 ITR 565 AND THEIR LORDSHIPS HELD AT PAGE 568 AS UNDER IT APPEARS THAT D ESPITE THE ABOVE CIRCULAR THE REVENUE HAS CHOSEN TO FILE THE PRESENT APPEAL KNOWINGLY FULLY WELL THAT THE CORRIDORS OF THE COURTS ARE FLOODED WITH PENDING LITIGATIONS. THE PRESENTATION OF THIS APPEAL IS QUITE CONTRARY TO THE INSTRUCTION ISSUED IN THE CIRC ULAR WHICH IS BINDING ON THE REVENUE. IN THE ABOVE VIEW OF THE MATTER CONSIDERING THE INSTRUCTIONS ISSUED BY THE CENTRAL BOARD OF DIRECT TAXES WE ARE SATISFIED THAT THE BOARD HAS TAKEN A POLICY DECISION NOT TO FILE APPEAL IN A TYPE OF CASE IN HAND AND T HE SAME IS BINDING ON THE REVENUE (APPELLANT HEREIN). IN THE RESULT WE DISMISS THIS APPEAL ON THIS COUNT IN LIMINE WITH NO ORDER AS TO COSTS. 6. WE FIND THAT RECENTLY THE APEX COURT HAS CONSIDERED THE EFFECT OF CIRCULAR ISSUED BY THE CBDT IN THE CASE O F COMMISSIONER OF CUSTOMS VS. INDIAN OIL CORPORATION LTD. 267 ITR 272. THEIR LORDSHIPS EXAMINED THE EARLIER DECISIONS OF / I.T.A.NO.391/KOL/2010 3 THE APEX COURT WITH REGARD TO BINDING NATURE OF THE CIRCULAR AND LAID DOWN THE FOLLOWING PRINCIPLES AT PAGE 277 OF THE REPORTS THE PRINCIPLES LAID DOWN BY ALL THESE DECISIONS ARE 1 ) ALTHOUGH A CIRCULAR IS NOT BINDING ON A COURT ON AN ASSESSEE IT IS NOT OPEN TO THE REVENUE TO RAISE A CONTENTION THAT IS CONTRARY TO A BINDING CIRCULAR BY THE BOARD WHEN A CIRCULAR REMAINS IN OPERATION THE REVENUE IS BOUND BY IT AN D CANNOT BE ALLOWED TO PLEAD THA T IT IS NOT VALID NOR THAT IT IS CONTRARY TO THE TERMS OF THE STATUTE. 2) DESPITE THE DECISION OF THIS COURT THE DEPARTMENT CANNOT BE PERMITTED TO TAKE A STAND CONTRARY TO THE INSTRUCTIONS IS SUED BY THE BOARD. 3) A SHOW CAUSE NOTICE AND DEMAND CONTRARY TO EXISTING CIRCULARS OF THE BOARD ARE AB INITIO VOID. 4) IT IS NOT OPEN TO THE REVENUE TO ADVANCE AN ARGUMENT OR FILE AN APPEAL CONTRARY TO THE CIRCULARS. FROM THE ABOVE IT IS EVIDENT THAT THE HONBLE APEX COURT HAS LAID DOWN THAT IT IS NOT OPEN TO THE REVENUE TO ADVANCE AN ARGUMENT OR FILE AN APPEAL CONTRARY TO THE CIRCULAR. ACCORDINGLY THIS APPEAL FILED BY THE REVENUE IS NOT ADMITTED AND IS BEING DISMISSED IN LIMINE . 7. IN THE RESULT THE APPEAL OF THE REVENUE IS DISMISSED. THIS ORDER IS PRONOUNCED IN OPEN COURT ON DT. 07.04.2010 SD/ - SD/ ( . . ) (C.D. RAO) ACCOUNTANT MEMBER ( . . ) ( B.R.MITTAL ) J UDICIAL MEMBER ( ) DATE : 07.04.2010 ( /) H.K.PADHEE / SNR.PRIVATE SECRETARY. / I.T.A.NO.391/KOL/2010 4 - COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT : INCOME - TAX OFFI CER WARD 1 HALDIA. 2 / THE RESPONDENT - M/S. HALDIA ENTERPRISE BANBISHNUPUR BALUGHATA PURBA MEDINIPUR. 3. / THE CIT 4. ( )/ THE CIT(A) 5. / DR KOLKATA BENCH 6. GUARD FILE . / TRUE COPY / BY ORDER / DEPUTY REGISTRAR .