National Litigation Policy - Low value Appeals - Monetary limit - Board Instructions not retrospective
BY Instruction No. , dated 09.02.2011, CBDT laid down monetary limits for filing appeals by the Department and directed that appeals shall not be filed in cases where the tax effect does not exceed the monetary limits as:
S. No. | Appeals in Income-Tax matters | Monetary Limit (in Rs) |
|---|---|---|
1. | Appeal before Appellate Tribunal | 3,00,000/- |
2. | Appeal u/s 260 A before High Court | 10,00,000/- |
3. | Appeal before Supreme Court | 25,00,000/- |
It was also made clear that the 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.
The Karnataka High Court had in the Ranka & Ranka case - held that the the benefit of this instruction also applies to the pending cases in appeal in various Courts and Tribunals on the date of the instruction.
This was followed by several High Courts and Tribunal Benches.
By similar Instruction dated 17.08.2011, the CBEC fixed the monetary limits below which appeal shall not be filed in the Tribunal, High Court and the Supreme Court:
Sl.No . | Appellate Forum | Monetary limit |
|---|---|---|
1. | CESTAT | Rs.5,00,000/- |
2. | HIGH COURTS | Rs.10,00,000/- |
3. | SUPREME COURT | Rs.25,00,000/- |
Here also, the Board clarified that the revised monetary limits shall come into force from 1.9.2011.
But still Ranka & Ranka ruled the roost and several High Courts and Tribunal Benches followed this decision. The latest CESTAT order reported by us following this decision was 2015-TIOL-1228-CESTAT-BANG and the ITAT decision 2015-TIOL-1065-ITAT-KOL.
Incidentally while the Karnataka High Court decision in Ranka & Ranka had been made liberal use of in the judicial circles, the Karnataka High Court itself did not follow it in another judgement. In SMT B SUMANGALADEVI - another Bench of the Karnataka High Court held that the decision in Ranka & Ranka case is against the provision under Section 268A of the Act, Public Interest and the Public Policy. This was in October 2012, but still Ranka continued to rule the field.
The whole scenario changed recently with a judgement of the Supreme Court in Commissioner of Income Tax Vs Suman Dhamija - , wherein the Supreme Court held:
The appeals and review petitions preferred by the appellants before the High Court, were disposed of on the basis of the instructions issued by the Central Board of Direct Taxes dated 9.2.2011. It is not a matter of dispute, that all the appeals were preferred prior to 2011, whereas, the instructions dated 9.2.2011 clearly indicate in paragraph 11 thereof, that they shall not govern cases which have been filed before 2011, and that, the same will govern only such cases which are filed after the issuance of the aforesaid instructions dated 9.2.2011 .
The Supreme Court set aside the orders of the High Court and remanded the cases to the High Court to decide the issue on merits.