When Appeal Dismissed due to low tax effect, no ruling on the Issue - High Court
BY Instruction No. 3/2011 dated 09.02.2011, the CBDT directed that appeals by the Department to the High Court should not be made if the tax effect is less than Rs. 10 lakhs.
In a case decided last week by the Bombay High Court, the Commissioner of Income Tax filed three appeals before the High Court, in all of which the tax effect was less than Rs. 10 lakhs.
His apprehension expressed before the High Court was that in the event the Appeal is dismissed only on this count and relying on the Circular, it would be construed that the discussion and reasoning of the Tribunal has met with this Court's approval. It would also mean that the order of the Tribunal has been upheld by this Court .
Was the Revenue misleading the High Court?
Para 6 of the Board Instruction reads as:
In a case where 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 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 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 assessment year, if the tax effect exceeds the specified monetary limits .
Didn't the Commissioner read the Board Instruction or was he showing his contempt for Board instructions? When the Board Instruction is very clear, why should the Commissioner entertain that apprehension? Why should he file the appeal in the first place (against Board Instruction) and then have the apprehension?