Whether the Monetary Limits directed by the CBDT Instruction for filing departmental appeals govern filing of appeals

only or the same should be considered for disposal for Appeal too Conflicting Views_ Delhi HC dissents from Punjab and Haryana HC. CBDT INSTRUCTION CBDT has issued instruction giving monetary Limits for filing departmental appeals and has revised the limits over a period of time. It has been decided by the Board that departmental appeals shall not be filed in cases where the tax effect does not exceed the monetary limits given hereunder: Appeals In Income Tax Matters Monetary Limit Rs. Instruction No.3/2011 Dated 9/2/2011 3,00,000 10,00,000 25,00,000 Monetary Limit Rs. Instruction No.2/2005 Dated 24/10/2005 2,00,000 4,00,000 10,00,000 Monetary Limit Rs. Instruction No.1979 Dated 27/03/2000 100,000 2,00,000 500,000 Monetary Limit Rs. Instruction No.1903 Dated 28/10/1992 25,000 50,000 150,000

Appeal Before Appellate Tribunal Appeal Before High Court Appeal before Supreme Court

Point 11 of the Instruction No.3/2011, clearly specifies that This instruction will apply to appeals filed on or after 9th February 2011. However, the cases where appeals have been filed before 9th February 2011 will be governed by the instructions on this subject, operative at the time when such appeal was filed. Assent to the view that Circular has to be read to pending Appeals. THE HIGH COURT OF DELHI, in ITA No. 128/2008, 03.03.2011, Commissioner of income-tax Vs. Delhi Race Club Ltd held that such circular would also apply to pending cases. In this case, decision ruled

out in Commissioner of Income Tax Delhi-III v. M/s P.S. Jain and Co. ITA No. 179/1991 decided on 2nd August, 2010 was held to be binding precedent and was relied on. While deciding the case of P.S.Jain, supra above, the Delhi High Court took reference of Division Bench of the High Court of Bombay in the case of CIT v.Pithwa Engg. Works [2005] 276 ITR 519 (Bom), in paragraph 6, "This Court can very well take judicial notice of the fact that by passage of time money value has gone down, the cost of litigation expenses has gone up, the assesses 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 need 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 proceed with decades old references having negligible tax effect. Thus the main principle laid down in the case of Pithwa Eng, supra above, that hold good in P.S.Jain, supra above, is that when the tax effect is minimum, the limits spelt by the current circular can be applied to pending appeals too. Dissenting View that the Circular should not be read to pending appeals. The Commissioner of Income Tax III Ludhiana Vs.M/s Varindera Construction Co.Baghapurana , P&H HC, Larger Bench, have held that The object of circular under section 268A as already mentioned is only to govern monetary limit for filing of the appeals. There is no scope for reading the circular as

being applicable to pending appeals. (Para 11.) Accordingly, we hold that monetary limit laid down vide circular dated 15.5.2008 will apply only to filing of appeals. Appeals already filed and pending prior thereto will be governed by monetary limit laid down at the time of filing. In my opinion, the following points emerge :1. Circular for monetary limits for filing appeals is not retrospective. Point 11 clearly specifies that it should be applied only for filing of appeals.

2. In view of Full Bench Decision of Punjab and Haryana court, the

Circular is inapplicable to pending appeals.

3. However, in case of old pending appeals, the court has a discretion not
to decide on pending appeals where tax effect is minimum.