The ACIT, Circle-3,, Surat v. Shri Ajay D.Mahajan, Surat

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD D BENCH AT SURAT CAMP AHMEDABAD BEFORE SHRI T.K. SHARMA JUDICIAL MEMBER AND SHRI D. C. AGRAWAL ACCOUNTANT MEMBER ITA NO.637/AHD/2008 ASSESSMENT YEAR: 2004-05 DATE OF HEARING:20.5.10 DRAFTED:24.5.10 ACIT CIRCLE-3 SURAT V/S . SHRI AJAY D MAHAJAN PROP. M/S. M.V. ASSOCIATES U-9/10 SILVER SSPRING APARTMENT ANAND MAHAL ROAD SURAT PAN NO.AHPM1538I (APPELLANT) .. (RESPONDENT) APPELLANT BY :- SMT. JYOTI LAXIMI SR-DR RESPONDENT BY:- SHRI DENNISH CHOKSHI AR O R D E R PER D.C.AGRAWAL ACCOUNTANT MEMBER:- THIS APPEAL IS FILED BY REVENUE RAISING FOLLOWING GROUNDS:- 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE CIT(A) ERRED IN DELETING THE ADDITION OF RS.4 50 000/- MADE ON ACCO UNT OF RUNNING BILLS NOT ACCOUNTED FOR DURING THE YEAR UNDER CONSIDERATI ON THOUGH MERCANTILE SYSTEM F ACCOUNTING WAS FOLLOWED. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE CIT(A) ERRED IN DELETING THE ADDITION OF RS.50 000/- MADE ON ACCOUN T OF LOW WITHDRAWAL OF HOUSE HOLD EXPENSES. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE CIT(A) ERRED IN DELETING THE ADDITION OF RS.73 688/- OUT OF TOTAL A DDITION OF RS.1 00 000/- ITA NO.637/AHD/2008 A.Y. 2004-05 ACIT CIR-3 SRT V. SH. AJAY D MAHAJAN PAGE 2 MADE ON ACCOUNT OF DISALLOWANCE OUT OF TELEPHONE CAR STAFF WELFARE AND VEHICLE EXPENSES. 2. AT THE OUTSET LD. AR FOR THE ASSESSEE SUBMITTED THE REVENUE EFFECT INVOLVED IN THIS APPEAL IS LESS THAN RS.2 LAKH. LD . AR STATED THAT SUBJECT APPEAL IS PREFERRED BY REVENUE AGAINST THE ORDER U/S.250 D ATED 27-11-2007 AS PASSED BY LD. CIT(APPEALS)-II SURAT. THE ASSESSEE IS AN INDI VIDUAL AND THE APPLICABLE MAXIMUM MARGINAL TAX RATE FOR THE YEAR UNDER CONSID ERATION FOR ASSTT. YEAR 2004-05 IN ASSESSEES CASE IS 33% I.E. 30% TAX PLUS 10% SURCHARGE. THE DEPARTMENT HAS CONTESTED DELETION OF ADDITIONS TOTA LING TO RS.5 73 688/- I.E. RS.4.50 LAKH + RS.50 000/- + RS.73 688 ON WHICH THE TAX EFFECT @ 33% WORKS OUT TO RS.1 89 317/-. HOWEVER IN THE STATEMENTS O F FACTS FILED WITH FORM NO.36 THE TAX EFFECT INVOLVED HAS BEEN STATED AT RS.2 39 338/- WHICH APPEARS TO BE INCLUSIVE OF THE FIGURE OF INTEREST U/S.234D AND IN TEREST WITHDRAWN U/S.244A WHICH ARE NOT TO BE TAKEN INTO CONSIDERATION AS PER CBDT INSTRUCTION NO.5 DATED 15-05-2008. IT CAN BE APPRECIATED THAT THE T AX RELIEF TO THE ASSESSEE AS PER THE CIT(APPEALS)S ORDER IS RS.1 89 318/-. IN VIEW OF THIS APPEAL OF THE REVENUE SHOULD BE DISMISSED IN LIMINE. 3. AT THE OUTSET IT WAS NOTED THAT THE TAX EFFECT IN THE DEPARTMENTS APPEAL IS LESS THAN RS.2 LAKHS. THIS BENCH VIDE I TS ORDER DATED 10.6.2008 IN I.T.A.NOS.335 338 TO 341/LUC/08 IN THE CASE OF DY. CIT VS SHRI BRAHMANAND BHASIN HAS HELD THAT WHERE TAX EFFECT IN DEPARTME NTS APPEAL IS LESS THAN RS.2 LAKHS DEPARTMENT COULD NOT HAVE FILED THE APPEAL A S PER INSTRUCTIONS OF THE GOVERNMENT. IN THIS REGARD WE REFER TO FOLLOWING PORTION FROM THAT JUDGMENT: 10. IT IS UNDISPUTED FACT THAT IN ALL THESE APP EALS THE TAX EFFECT INVOLVED IN RESPECT OF DISPUTE IN EACH YEAR IS LESS THAN RS.2 LAKHS. THEREFORE AS PER MONETARY LIMIT THIS IS COVERED B Y THE LATEST INSTRUCTIONS ISSUED BY THE C.B.D.T. AS MENTIONED AB OVE AND ALSO BOARD'S INSTRUCTIONS NO 1979 DATED 27.3.2000 NO.19 85 DATED 29.6.2000 NO.6 OF 2003 DATED 17.7.2003 NO.19 OF 2 003 DATED ITA NO.637/AHD/2008 A.Y. 2004-05 ACIT CIR-3 SRT V. SH. AJAY D MAHAJAN PAGE 3 23.12.2003 NO.5/2004 DATED 27.5.2004 NO.2/2005 DA TED 24.10.2005 AND NO.5/2007 DATED 16.7.2007 WHEREIN MO NETARY LIMIT FOR FILING DEPARTMENTAL APPEAL IN INCOME-TAX MATTER AND OTHER CONDITIONS WERE SPECIFIED FOR FILING APPEAL BEFORE THE TRIBUNAL HIGH COURTS AND SUPREME COURT. ALL THESE INSTRUCTIONS W ERE SUPERCEDED AND FRESH MONETARY LIMITS WERE FIXED FOR THIS PURPO SE. THESE LIMITS CONTAINED IN INSTRUCTION NO 5/2008 DATED 15.5.2008. IN THIS REGARD THE RELEVANT PART OF INSTRUCTIONS CONTAINED IN PARA S 3 4 & 5 ARE REPRODUCED BELOW:- '3. APPEALS WILL HENCEFORTH BE FILED ONLY IN CASES WHERE THE TAX EFFECT EXCEEDS MONETARY LIMITS GIVEN HEREUNDER: - SL. NO. APPEALS IN INCOME-TAX MATTERS MONETARY LIMIT (IN RS.) 1. APPEAL BEFORE APPELLATE TRIBUNAL 2 00 000/- 2. APPEAL U/S. 260A BEFORE HIGH COURT 4 00 000/- 3. APPEAL BEFORE SUPREME COURT 10 00 000/- 4. FOR THIS PURPOSE 'TAX EFFECT' MEANS THE DIFFERE NCE BETWEEN THE TAX ON THE TOTAL INCOME ASSESSED AND TH E TAX THAT WOULD HAVE BEEN CHARGEABLE HAD SUCH TOTAL INCO ME BEEN REDUCED BY THE AMOUNT OF INCOME IN RESPECT OF THE ISSUE AGAINST WHICH APPEAL IS INTENDED TO BE FILED (HEREAFTER REFERRED TO AS 'DISPUTED ISSUES'). HOWEVER THE TA X WILL NOT INCLUDE ANY INTEREST THEREON. SIMILARLY IN LOSS C ASES NOTIONAL TAX EFFECT SHOULD BE TAKEN INTO ACCOUNT. IN THE CASES OF PENALTY ORDERS THE TAX EFFECT WILL MEAN Q UANTUM OF PENALTY DELETED OR REDUCED IN THE ORDER TO BE APPEA LED AGAINST. 5. THE ASSESSING OFFICER SHALL CALCULATE THE TAX EF FECT SEPARATELY FOR EVERY ASSESSMENT YEAR IN RESPECT OF THE DISPUTED ISSUES IN THE CASE OF EVERY ASSESSEE. IF IN THE CASE OF AN ASSESSEE THE DISPUTED ISSUES ARISE IN MORE T HAN ONE ASSESSMENT YEAR APPEAL SHALL BE FILED IN RESPECT O F SUCH ASSESSMENT YEAR OR YEARS IN WHICH THE TAX EFFECT IN RESPECT OF THE DISPUTED ISSUES EXCEEDS THE MONETARY LIMIT SPEC IFIED 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 ITA NO.637/AHD/2008 A.Y. 2004-05 ACIT CIR-3 SRT V. SH. AJAY D MAHAJAN PAGE 4 MONETARY LIMIT SPECIFIED IN PARA 3. IN OTHER WORDS HENCEFORTH APPEALS WILL BE FILED ONLY WITH REFEREN CE TO THE TAX EFFECT IN THE RELEVANT ASSESSMENT YEAR. HOWEVE R IN CASE OF A COMPOSITE ORDER OF ANY HIGH COURT OR APPELLATE AUTHORITY WHICH INVOLVES MORE THAN ONE YEAR APPEA L 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 RES PECT OF THE YEAR(S) IN WHICH 'TAX EFFECT' EXCEEDS THE MONETARY LIMIT PRESCRIBED.' 11. EARLIER THE HON'BLE ALLAHABAD HIGH COURT IN JU GAL KISHORE ARORA VS. DY C.I.T. [2004] 269 I.T.R. 133 (ALL.) H ELD THAT INSTRUCTIONS OF C.B.D.T. ARE INTERNAL MATTERS OF TH E DEPARTMENT AND ASSESSEE CANNOT OBJECT TO THE FILING OF APPEAL DESP ITE SUCH INSTRUCTIONS. IN THIS REGARD WE REPRODUCE FROM TH E JUDGEMENT AS UNDER:- 'AS REGARDS THE CONTENTION THAT THE APPEAL SHOULD N OT HAVE BEEN ENTERTAINED IN VIEW OF THE DIRECTION OF THE CE NTRAL BOARD OF DIRECT TAXES DATED MARCH 27 2000 WE ARE OF THE OPINION THAT THE INSTRUCTIONS OF THE CENTRAL BOARD OF DIRECT TAXES REGARDING FILING OF APPEALS ARE ONLY INTERNAL MATTERS OF THE DEPARTMENT AND THE ASSESSEE CANNOT OBJECT T O FILING OF AN APPEAL DESPITE SUCH AN INSTRUCTION.' 12. HOWEVER OTHER HIGH COURTS HAVE TAKEN A DIFFER ENT VIEW AND THEY HAVE HELD THAT INSTRUCTIONS OF C.B.D.T. ARE BI NDING ON THE OFFICERS AND THAT MONETARY LIMITS FIXED BY THE C.B. D.T. FOR FILING APPEAL SHOULD HAVE BEEN FOLLOWED. ON THAT BASIS A PPEALS FILED BY THE REVENUE WERE DISMISSED. IN THIS REGARD WE CON SIDER IT PROPER TO REPRODUCE RELEVANT PART FROM THE FOLLOWING JUDGE MENTS. 13. IN THE CASE OF JOINT C.I.T. VS. PEERLESS DEVEL OPERS LTD. [2006] 287 I.T.R. (AT) 153 (SB) THE SPECIAL BENCH OF I.T. A.T. CALCUTTA OBSERVED AS UNDER:- 'THAT SINCE 1987 THE CENTRAL BOARD OF DIRECT TAXES HAD NOT ONLY BEEN TAKING A CONSISTENT APPROACH OF INSTR UCTING ITS OFFICERS NOT TO FILE THE APPEAL WHERE THE TAX E FFECT IS BELOW THE MONETARY LIMIT BUT SUCH MONETARY LIMIT I S ALSO REVISED UPWARDS FROM TIME TO TIME. THE MONETARY LIM IT FOR THE YEAR UNDER CONSIDERATION WAS ONE LAKH OF RUPEES . THE ITA NO.637/AHD/2008 A.Y. 2004-05 ACIT CIR-3 SRT V. SH. AJAY D MAHAJAN PAGE 5 INSTRUCTIONS OF THE BOARD PRESCRIBING MONETARY LIMI T FOR FILING APPEAL BEFORE VARIOUS FORUMS ARE BINDING ON THE INCOME-TAX AUTHORITIES. 14. IN THE CASE OF C.I.T. VS. CAMCO COLOUR CO. [ 2002] 254 I.T.R. 565 THE HON'BLE BOMBAY HIGH COURT OBSERVED AS UNDE R:- 'CIRCULAR F. NO. 279/126/98-ITJ DATED MARCH 27 20 00 REFLECTED THE POLICY DECISION TAKEN BY THE CENTRAL BOARD OF DIRECT TAXES NOT TO RAISE QUESTIONS OF LAW WHERE TH E EFFECT IS LESS THAN THE AMOUNT PRESCRIBED IN THE INSTRUCTIONS ISSUED BY THE CENTRAL BOARD OF DIRECT TAXES WITH A VIEW TO RE DUCE LITIGATIONS BEFORE THE HIGH COURTS AND THE SUPREME COURT. THE CIRCULAR IS BINDING ON THE REVENUE. AN APPEAL O R REFERENCE CONTRARY TO THE INSTRUCTIONS ISSUED IN TH E CIRCULAR WILL NOT BE CONSIDERED BY THE COURTS.' 15. IN THE CASE OF C.I.T. VS. PITHWA ENGG. WORKS [2005 ] 276 I.T.R. 519 THE HON'BLE BOMBAY HIGH COURT OBSERVED AS UNDER:- 'THE CENTRAL BOARD OF DIRECT TAXES BY ITS CIRCULAR DATED MARCH 27 2000 HAS TAKEN A POLICY DECISION NOT TO FILE REFERENCES IF THE TAX EFFECT IS LESS THAN RS.2 LAKH S. THE CIRCULAR IS APPLICABLE EVEN TO THE OLD REFERENCES W HICH ARE STILL UNDECIDED. THE DEPARTMENT CANNOT CONTEND THAT THE CIRCULAR IS BINDING ONLY WITH RESPECT TO THE NEW CA SES AND NOT WITH RESPECT TO THE OLD REFERRED CASES EVEN IF THE TAX IS LESS THAN RS.2 LAKHS. THE SAME POLICY FOR OLD MATTE RS NEEDS TO BE ADOPTED BY THE DEPARTMENT.' 16. IN THE CASE OF C.I.T. VS. DIGVIJAY SINGH [2007] 29 2 I.T.R. 314 THE HON'BLE M.P. HIGH COURT OBSERVED AS UNDER: - 'COUNSEL FOR THE RESPONDENT RAISED A PRELIMINARY OBJECTION ABOUT THE MAINTAINABILITY OF THE APPEALS. ACCORDING TO HIM THE TOTAL TAX EFFECT IN EVERY APPEAL IS AROUND RS. 2 000. HE INVITED THE ATTENTIO N OF HIS COURT TO NOTIFICATION ISSUED UNDER SECTION 10 OF TH E WEALTH- TAX ACT WHICH PROVIDES THAT APPEAL COULD BE PREFER RED TO THE HIGH COURT IN CASES WHERE A DEBT OF WEALTH-TAX DOES NOT EXCEED RS. 25 000. HE INVITED T HE ATTENTION OF THIS COURT TO THE JUDGMENT OF THE BOMB AY HIGH COURT IN THE CASE OF CIT V. ZOEB ITA NO.637/AHD/2008 A.Y. 2004-05 ACIT CIR-3 SRT V. SH. AJAY D MAHAJAN PAGE 6 Y. TOPIWALA [2006] 284 ITR 379 ; [2005] 199 CTR 656 WHEREIN THE BOMBAY HIGH COURT HAS HELD THAT THE DIRECTIONS ISSUED BY THE BOARD DATED MARCH 27 2000 DIRECTING THE DEPARTMENT NOT TO RAISE QUESTIONS OF LAW WHERE THE TAX EFFECT IS LESS THAN RS. 2 LAKHS IS BINDING ON THE REVENUE. THE APPEAL WHICH WAS FILED HAVING TAX EFFECT LESS THAN RS. 7 000 WAS DISMISSED AS NOT MAINTAINA BLE BY THE BOMBAY HIGH COURT BY HOLDING THAT THE DIRECTION S ISSUED BY THE BOARD ARE BINDING ON THE DEPARTMENT. THE NEXT CASE RELIED UPON BY HIM IS IN THE CASE OF CIT V. CAMCO COLOUR CO. [2002] 254 ITR 565 ; [2002] 173 CTR 255 IN WHIC H THE BOMBAY HIGH COURT HAS REPRODUCED THE CIRCULAR ISSUED BY THE MINISTRY OF FINANCE DATED MARCH 27 2000 IN WHICH IT IS DIRECTED THAT APPEAL S UNDER SECTION 260A OF THE INCOME-TAX ACT WITH TAX EFFECT LESS THAN RS. 2 LAKHS SHOULD NOT BE PREFERRED. IN PARAGR APH 5 OF THE SAID CIRCULAR IT IS MENTIONED THAT THE SAID CIRCULAR IS APPLICABLE TO WEALTH-TAX GIFT-TAX ESTATE DUTY ET C. IN THAT CASE ALSO THE APPEAL WAS DISMISSED BY THE BOMBAY HI GH COURT BY HOLDING THE SAME AS NOT MAINTAINABLE. A NU MBER OF OTHER JUDGMENTS WERE RELIED UPON BY COUNSEL FOR THE APPELLANT FOR SUPPORTING HIS ARGUMENTS ON THE SAID QUESTION INCLUDING CIT V. KELVINATOR OF INDIA LTD. [2002] 256 ITR 1 WHICH IS A FULL BENCH JUDGMENT OF THE DE LHI HIGH COURT UCO BANK V. CIT [1999] 237 ITR 889 (SC) ; [1999] 4 SCC 599 AND CIT V. PITH WA ENGINEERING WORKS [2005] 276 ITR 519 (BOM). IN ALL THESE CASES APPEALS WERE DISMISSED ON THE GROUND TH AT THE TAX EFFECT INVOLVED IN THE APPEALS IS VERY LOW. IN THE PRESENT CASE ALSO THE TAX EFFECT IS LESS THAN RS.5 000 PER YEAR HENCE THE APPEALS ARE NOT MAINTAINABLE. HOWEVE R TO COMPLETE THE JUDGMENT WE PROCEED TO DECIDE OTHER GROUNDS.' 17. IN THE CASE OF C.I.T. VS. ZOEB Y. TOPIWALA [2006] 284 I.T.R. 379 THE HON'BLE BOMBAY HIGH COURT OBSERVED AS UNDE R:- 'THE INSTRUCTION OF THE CENTRAL BOARD OF DIRECT TAX ES DATED MARCH 27 2000 REFLECTS THE POLICY DECISION TAKEN BY THE BOARD NOT TO RAISE QUESTIONS OF LAW WHERE TH E TAX EFFECT IS LESS THAN THE AMOUNT PRESCRIBED IN THE IN STRUCTIONS WITH A VIEW TO REDUCE LITIGATION BEFORE THE HIGH CO URTS ITA NO.637/AHD/2008 A.Y. 2004-05 ACIT CIR-3 SRT V. SH. AJAY D MAHAJAN PAGE 7 AND THE SUPREME COURT. THE CIRCULAR IS BINDING ON T HE REVENUE.' 18. THE HON'BLE RAJASTHAN HIGH COURT IN THE CASE OF C.I.T. VS. RAJASTHAN PATRIKA LTD. [2002] 258 I.T.R. 300 HELD THAT THOUGH NO APPEAL SHOULD HAVE BEEN FILED WHERE TAX EFFECT IS L ESS THAN LIMIT PRESCRIBED BUT THE HIGH COURT OUGHT NOT TO DISMISS THE APPEAL OR REJECT REFERENCE. THE RELEVANT PORTION OF HEAD NOT ES ARE AS UNDER:- 'HELD _ ALSO THAT IF IN SPITE OF ADMINISTRATIVE I NSTRUCTIONS IN A CIRCULAR OF THE CENTRAL BOARD OF DIRECT TAXES TO THE EFFECT THAT NO APPEAL SHOULD BE FILED WHEN THE TAX EFFECT IS NOT MORE THAN RS.50 000 THE DEPARTMENT PREFERS TO FILE AN APPEAL OR TAKE A REFERENCE TO THE HIGH COURT ON SU CH ADMINISTRATIVE INSTRUCTIONS THE HIGH COURT OUGHT NO T TO DISMISS THE APPEAL OR REJECT THE REFERENCE. THERE I S NO INFIRMITY IN DISPOSING OF THE APPEAL OR REFERENCE O N THE MERITS.' 19. BUT NOW IN THE LATEST JUDGMENT THE HON'BLE AL LAHABAD HIGH COURT HAS HELD THAT WHERE TAX LIABILITY IS LESS THA N RS.5 LAKHS SUCH MATTER NEED NOT BE CARRIED IN APPEAL BEFORE THE HON 'BLE ALLAHABAD HIGH COURT. IN THIS REGARD WE REFER PARAS 2 3 4 & 5 FROM THAT JUDGEMENT AS UNDER:- '2. THE APPEAL RAISES THE FOLLOWING SUBSTANTIAL QUE STION OF LAW:- 'WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LEARNED I.T.A.T. WAS JUSTIFIED IN DELETIN G THE ADDITION OF RS.90 000/- CLAIMED AS GIFTS RECEIVED F ROM 8 PARTIES EVEN THOUGH THE ASSESSEE FAILED TO PROVE GENUINENESS OF THE AFORESAID GIFTS ?' 3. THE RESPONDENT HEREIN IS STATED TO BE A COLONIZE R IN ASSESSMENT YEAR 1986-87 HE RETURNED THE INCOME OF RS.29 890. HE FURTHER SHOWED THE CASH CREDIT OF THE AGGREGATE AMOUNT OF RS.90 000 BEING SHOWN AS GIFTS. THEY WERE THE AMOU NTS SUPPOSED TO BE DONATED BY SOME EIGHT PERSONS. THE ASSESSING OFFICER THEREFORE MADE AN ADDITION OF RS.90 000 A ND CONSEQUENT TAX LIABILITY INCREASED WOULD BE RS.53 3 12. THE APPEAL PREFERRED BY THE ASSESSEE WAS DISMISSED BY T HE COMMISSIONER OF INCOME TAX (APPEALS). HOWEVER THE TRIBUNAL ENTERTAINED THE APPEAL PREFERRED BY THE AS SESSEE. THE APPELLATE COMMISSIONER TOOK THE VIEW THAT THE D ONORS HAD ITA NO.637/AHD/2008 A.Y. 2004-05 ACIT CIR-3 SRT V. SH. AJAY D MAHAJAN PAGE 8 NOT SHOWN THESE AMOUNT IN THEIR BALANCE SHEET WHICH WAS AT LEAST SEEN IN THE CASE OF ONE OF THE DONORS AND THE PERSONS CONCERNED WERE NOT PRODUCED BEFORE THE ASSESSING OF FICER AND THEREFORE HE HAD CONFIRMED THE ADDITION. AS AGAIN ST THAT THE TRIBUNAL HAD NOTED THAT THE MEMORANDUM FOR GIFT WER E FILED IN EACH OF THESE CASES AND GIFT TAX ASSESSMENT WAS MAD E IN THE SAME WARD WHERE THE ASSESSEE WAS BEING ASSESSED. T HE TRIBUNAL THEREFORE OBSERVED THAT THERE WAS NO DIF FICULTY FOR THE INCOME-TAX OFFICER TO KNOW FROM THE RECORD WHET HER THESE PERSONS WERE EXISTING OR NOT. BESIDES THAT AFFIDAV ITS WERE ALSO FILED. IN THE CIRCUMSTANCES THE TRIBUNAL INTERFER ED WITH THE ADDITION MADE BY THE ASSESSING OFFICER AND SET ASID E HIS ORDER AS WELL THAT OF THE COMMISSIONER OF INCOME TAX (APP EALS). 4. IT IS A CASE WHERE PERHAPS TWO VIEWS WERE POSSIB LE AND IT IS NOTED ABOVE THAT THE TAX LIABILITY IS RS.53 312. T HE CENTRAL BOARD OF DIRECT TAXES HAS COME OUT WITH A CIRCULAR THAT WHERE THE TAX LIABILITY IS LESS THAN RS.5 00 000 SUCH MAT TERS SHOULD NOT BE CARRIED IN APPEAL. 5. IN VIEW OF THE ABOVE WE DO NOT THINK THAT THIS COURT SHOULD INTERFERE. OTHERWISE ALSO WE DO NOT FIND THAT THI S IS A CASE INVOLVING SUBSTANTIAL QUESTION OF LAW WHICH OUGHT T O BE ENTERTAINED.' 20. SINCE IN THE LATEST DECISION THE HON'BLE ALLAHABAD HIGH COURT HAS HELD THAT APPEAL INVOLVING TAX EFFECT OF LESS THAN PRESCRIBED MONETARY LIMIT AS PER INSTRUCTIONS ISSUE D BY THE C.B.D.T. NEED NOT BE PURSUED THIS JUDGMENET OF THE HON'BLE ALLAHABD HIGH COURT BEING LATEST IN TIME WOULD BE B INDING ON THE TRIBUNAL AND THEREFORE WE HOLD THAT THE APPEALS IN THE CASES INVOLVING TAX EFFECT LESS THAN PRESCRIBED LIMIT FOR FILING APPEAL BEFORE THE TRIBUNAL SHOULD NOT HAVE BEEN FILED BY T HE DEPARTMENT. 21. IT IS UNDISPUTED FACT THAT CIRCULAR ISSUED BY THE C.B.D.T. ARE BINDING ON SUBORDINATE AUTHORITIES. IN THIS REGARD WE REFER TO THE DECISIONS OF THE HON'BLE SUPREME COURT OF INDIA IN ELLERMAN LINES LTD. VS. C.I.T. [1971] 82 I.T.R. 913 (S.C); UCO BAN K VS. C.I.T. [1999] 237 I.T.R. 889 (S.C); C.I.T. VS. KELVINATOR OF INDIA LTD. [ 2002] 256 I.T.R. 1 (FULL BENCH DELHI); C.I.T. VS. SOUNDARARAJA FINANCE LTD. [2006] 283 I.T.R. 559 (MAD.); BHARAT C ONSTRUCTION CO. VS. C.I.T. [2002] 258 I.T.R. 140 (RAJ.); C.I.T. VS. BLAZE ADVERTISING (DELHI) PVT. LTD. [2002] 255 I.T.R. 46 (DELHI) AND ITA NO.637/AHD/2008 A.Y. 2004-05 ACIT CIR-3 SRT V. SH. AJAY D MAHAJAN PAGE 9 HARSHENDU UPENDRE KAKA VS. I.T.O. AND OTHERS [2001] 249 I.T.R. 612 (BOM.). 22. AS A RESULT WE DISMISS ALL THE APPEALS FILED BY THE REVENUE BEING AGAINST LATEST EXECUTIVE INSTRUCTIONS OF 2008 ISSUED BY THE C.B.D.T. AND BELOW MANDATORY MONETARY LIMIT PRESCRI BED THEREIN FOR FILING APPEALS. HOWEVER IT IS NOT TO BE CONST RUED AS A DECISION ON MERITS OR ON LEGAL CONTENTIONS INVOLVED IN THESE APPEALS. 4. SINCE IN THE PRESENT CASE ALSO TAX EFFECT IN DEPARTMENTS APPEAL IS LESS THAN RS.2 LAKHS DEPARTMENT OUGHT NOT HAVE FILED THE APPEAL. AS THE APPEAL SO FILED IS AGAINST THE EXECUTIVE INSTRUCTIONS WHICH A RE BINDING ON THE DEPARTMENT WE DISMISS THE APPEAL IN LIMINE. 5. AS A RESULT THE APPEAL FILED BY THE DEPARTMENT IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 28/05/2010 SD/- SD/- (T.K.SHARMA) (D.C.AGRAWAL) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) AHMEDABAD DATED : 28/05/2010 *DKP COPY OF THE ORDER FORWARDED TO :- 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT(APPEALS)-II SURAT 4. THE CIT CONCERNS. 5. THE DR ITAT AHMEDABAD 6. GUARD FILE. BY ORDER /TRUE COPY/ DEPUTY / ASSTT.REGISTRAR SITAT AHMEDABAD