TIOL-DDT 2674 · the untouched capture
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<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399" size="3"><s><strong><font size="2"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399" size="3"><s><strong><font size="2"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=23157"><img src="http://www.taxindiaonline.com/RC2/image/stories/limca_book2015_1.jpg" alt="DDT in Limca Book of Records - Third Time in a row" width="300" height="148" hspace="5" border="0" align="right" ></a></font></strong></font></strong></font></strong></font></strong></font></strong></s></font></strong></font></strong></font></strong></font></strong></font></strong></font></strong></s>TIOL-DDT 2674</font><br>
31 08 2015 <br>
Monday</strong></font></p>
<p align="center"><em><font face="Georgia, Times New Roman, Times, serif"><strong><font color="#006600" size="3">National Litigation Policy - Low value Appeals - Monetary limit - Board Instructions not retrospective</font></strong></font></em></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>BY</strong> <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=67&filename=notification/cbdt/2011/instruct1103.htm" target="_blank"><strong>Instruction No. 3/2011, dated 09.02.2011</strong></a>, 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: </font></p>
<table width="90%" border="1" align="center" cellpadding="3" cellspacing="0">
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<td valign="top" bgcolor="#783694"><strong><font color="#FFFFFF" size="2" face="Verdana, Arial, Helvetica, sans-serif">S. No. </font></strong></td>
<td valign="top" bgcolor="#783694"><div align="center"><strong><font color="#FFFFFF" size="2" face="Verdana, Arial, Helvetica, sans-serif">Appeals in Income-Tax matters </font></strong></div></td>
<td valign="top" bgcolor="#783694"><div align="center"><strong><font color="#FFFFFF" size="2" face="Verdana, Arial, Helvetica, sans-serif">Monetary Limit (in Rs) </font></strong></div></td>
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<td valign="top" bgcolor="#783694"><div align="center"><strong><font color="#FFFFFF" size="2" face="Verdana, Arial, Helvetica, sans-serif">1. </font></strong></div></td>
<td valign="top" bgcolor="#EFE3F4"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Appeal before Appellate Tribunal </font></td>
<td valign="top" bgcolor="#EFE3F4"><div align="right"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3,00,000/- </font></div></td>
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<td valign="top" bgcolor="#783694"><div align="center"><strong><font color="#FFFFFF" size="2" face="Verdana, Arial, Helvetica, sans-serif">2. </font></strong></div></td>
<td valign="top" bgcolor="#EFE3F4"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Appeal u/s 260 A before High Court </font></td>
<td valign="top" bgcolor="#EFE3F4"><div align="right"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">10,00,000/- </font></div></td>
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<td valign="top" bgcolor="#783694"><div align="center"><strong><font color="#FFFFFF" size="2" face="Verdana, Arial, Helvetica, sans-serif">3. </font></strong></div></td>
<td valign="top" bgcolor="#EFE3F4"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Appeal before Supreme Court </font></td>
<td valign="top" bgcolor="#EFE3F4"><div align="right"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">25,00,000/- </font></div></td>
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</table>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It was also made clear that the instruction will apply to appeals filed on or after <strong> 9th February 2011</strong>. However, the cases where appeals have been filed before <strong> 9th February 2011</strong> will be governed by the instructions on this subject, operative at the time when such appeal was filed. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Karnataka High Court had in the <em>Ranka & Ranka</em> case - <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=38&filename=legal/hc/2012/2012-TIOL-178-HC-KAR-IT.htm" target="_blank"><strong>2012-TIOL-178-HC-KAR-IT</strong> </a>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. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This was followed by several High Courts and Tribunal Benches. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">By similar <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=31&filename=notification/excise/2011/cxinstruct03.htm"><strong>Instruction dated 17.08.2011</strong></a>, the CBEC fixed the monetary limits below which appeal shall not be filed in the Tribunal, High Court and the Supreme Court: </font></p>
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<td valign="top" bgcolor="#783694"><strong><font color="#FFFFFF" size="2" face="Verdana, Arial, Helvetica, sans-serif">Sl.No .</font></strong></td>
<td valign="top" bgcolor="#783694"><strong><font color="#FFFFFF" size="2" face="Verdana, Arial, Helvetica, sans-serif">Appellate Forum </font></strong></td>
<td valign="top" bgcolor="#783694"><strong><font color="#FFFFFF" size="2" face="Verdana, Arial, Helvetica, sans-serif">Monetary limit </font></strong></td>
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<td valign="top" bgcolor="#783694"><div align="center"><strong><font color="#FFFFFF" size="2" face="Verdana, Arial, Helvetica, sans-serif">1. </font></strong></div></td>
<td valign="top" bgcolor="#EFE3F4"><div align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CESTAT </font></div></td>
<td valign="top" bgcolor="#EFE3F4"><div align="right"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Rs.5,00,000/- </font></div></td>
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<td valign="top" bgcolor="#783694"><div align="center"><strong><font color="#FFFFFF" size="2" face="Verdana, Arial, Helvetica, sans-serif">2. </font></strong></div></td>
<td valign="top" bgcolor="#EFE3F4"><div align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">HIGH COURTS </font></div></td>
<td valign="top" bgcolor="#EFE3F4"><div align="right"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Rs.10,00,000/- </font></div></td>
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<td valign="top" bgcolor="#783694"><div align="center"><strong><font color="#FFFFFF" size="2" face="Verdana, Arial, Helvetica, sans-serif">3. </font></strong></div></td>
<td valign="top" bgcolor="#EFE3F4"><div align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">SUPREME COURT </font></div></td>
<td valign="top" bgcolor="#EFE3F4"><div align="right"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Rs.25,00,000/- </font></div></td>
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<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Here also, the Board clarified that the revised monetary limits shall come into force from 1.9.2011. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">But still <em>Ranka & Ranka</em> ruled the roost and several High Courts and Tribunal Benches followed this decision. The latest CESTAT order reported by us following this decision was <strong><a href="http://www.taxindiaonline.com/RC2/caseLawDet.php?QoPmnXyZ=MTAzOTg5" target="_blank">2015-TIOL-1228-CESTAT-BANG</a></strong> and the ITAT decision <strong><a href="http://www.taxindiaonline.com/RC2/caseLawDet.php?QoPmnXyZ=MTA0NDU3" target="_blank">2015-TIOL-1065-ITAT-KOL</a></strong>.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">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 <em>SMT B SUMANGALADEVI </em>- <strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=38&filename=legal/hc/2012/2012-TIOL-825-HC-KAR-IT.htm" target="_blank">2012-TIOL-825-HC-KAR-IT</a></strong> another Bench of the Karnataka High Court held that the decision in <em>Ranka & Ranka case is against the provision under Section 268A of the Act, Public Interest and the Public Policy</em>. This was in October 2012, but still <em>Ranka </em>continued to rule the field. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The whole scenario changed recently with a judgement of the Supreme Court in <em>Commissioner of Income Tax Vs Suman Dhamija</em> - <strong><a href="http://www.taxindiaonline.com/RC2/caseLawDet.php?QoPmnXyZ=MTA2MDI1" target="_blank">2015-TIOL-195-SC-IT</a></strong>, wherein the Supreme Court held: </font></p>
<blockquote>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">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 . </font></em></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">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. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#FF5555">AND THE CBDT REACTS</font></strong>! In its instructions to the field, the CBDT directs the Principal Chief Commissioners that: </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. They should identify all the cases in their jurisdiction, where jurisdictional High Courts/ITATs have dismissed departmental appeals after applying the Instruction governing monetary limit retrospectively and without adjudicating the issue on merit. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. In identified appropriate cases, Review Petitions/Miscellaneous applications may immediately be moved in consultation with Sr. Standing/Standing Counsels. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3. All Sr. Standing Counsels/Standing Counsels be requested to bring the impugned judgment to the notice of High Court/ITAT, in appropriate cases, so that in pending cases/appeals, the ratio and intent of the judgement may be applied. </font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In the name of National Litigation Policy and avoiding litigation on small matters, they are further increasing litigation at all levels and took this simple matter all the way to the Supreme Court. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In the <em>Ranka</em> case, the Karnataka High Court had made some important observations which should have shamed the Revenue Departments into an anti-appeal mode, but when it comes to litigation, the Revenue will not spare any stone...</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Karnataka High Court observed, </font></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Government has formulated the National Litigation Policy with a view to ensure conduct of responsible litigation by the Central Government and urges every State Government to evolve similar policies. Its aim is to transform Government into an efficient and responsible litigant. Efficient litigant means ensuring that good cases are won and bad cases are not needlessly persevered with. The litigation should not be resorted to for the sake of litigating. Government must cease to be a compulsive litigant. The philosophy, "that matters should be left to the Courts for ultimate decision", has to be discarded. The easy approach, "Let the Court decide," must be eschewed and condemned. The purpose underlying this policy is also to reduce Government litigation in courts so that valuable Court time would be spent in resolving other pending cases, so as to achieve the Goal in the National Legal Mission to reduce average pendency time from 15 years to 3 years . </font></em></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif" style="background-color:#D3E9BE" span="span">It is our experience that in most of the cases, the levy of tax is made by placing such interpretation on the provision of the Act, so as to defeat the very object of those provisions. The Parliament with the best of intention, as incentive to trade and industry, has extended several benefits under the Act. Without properly appreciating the context and the object with which those provisions are enacted, the department has interpreted those provisions preventing those, benefits reaching the persons to whom it was intended. In most of the cases, the Tribunal has come to the rescue of those assessee, has interpreted those provisions in proper perspective and have extended the benefit to the assessee. It is against those orders, most of the appeals are filed mechanically as compulsive litigation without any sense of responsibility. It is our experience that most of the appeals which are filed by the Revenue are frivolous and vexatious. The majority of the appeals are filed with the sole object of leaving it to the Courts for ultimate decision. The approach is, 'let the Court decide'. The authority who decides to prefer the appeal is not prepared to take the responsibility. There is an attempt to save their skin, so that tomorrow they are not held responsible in any manner. It is this approach, which is to be eschewed and condemned, as stated in the National Litigation Policy. </font></em></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Maybe now CBEC will follow with their own version of this circular. </font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><a href="http://www.taxindiaonline.com/RC2/notDesc.php?MpoQSrPnM=MTg0NDg=" target="_blank"><strong>CBDT F.No. 279/Misc/142/2007-ITJ., Dated August 27, 2015 </strong></a></font></p>
<p align="center"><font size="3" face="Georgia, Times New Roman, Times, serif"><strong><em><font color="#006600">CBDT Announces New Rewards Scheme for Informants for Tax Recovery </font></em></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CBDT</strong> has issued 'Guidelines for Grant of Rewards to Informants leading to Recovery of Irrecoverable Taxes 2015' to regulate the grant and payment of reward to informants who provide specific and credible information of the whereabouts/assets of persons, on or after 31.03.2015, which results in the collection of taxes, penalties, interest or other amounts (hereinafter “tax") already levied under the Income Tax Act, 1961 and the Wealth Tax Act, 1957. Grant and payment of reward for information provided before 31.03.2015 will continue to be regulated by 'Guidelines for Grant of Rewards to Informants 2007'. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The guidelines will be applicable if the jurisdictional Pr. Chief Commissioner/Chief Commissioner is satisfied that the tax could not be recovered despite all possible efforts having been made by the Department to trace the defaulter assessee or his assets and the information provided by the informant has resulted in recovery of tax.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Individuals will be eligible for rewards based on the tax collected as a result of any administrative or judicial action resulting from the information provided. The quantum of tax collected will be determined only after all assessments have become final and no appeal/revision/other litigation is pending. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The reward would not exceed 10% of the tax, recovery of which is directly attributable to the information/documents supplied by the informant, subject to a ceiling of Rs. 15 lakh. The full Board may relax the ceiling of Rs. 15 lacs.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Reward in accordance with these guidelines is discretionary and will be in the nature of <em>ex-gratia </em>payment which, subject to these guidelines, will be granted in the absolute discretion of the authority competent to grant rewards. No representation or petition against any decision regarding grant of rewards will be entertained from either the informant or any person on his behalf and the outcome of the claim cannot be disputed in Court. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">A person will be considered to be an informant eligible for reward in accordance with these guidelines if he furnishes specific information in relation to assets/untraceable assessees concerning irrecoverable taxes. However, the claim of reward shall be confined to cases where action is actually taken in pursuance of the information. The information provided must be supported by facts/documents and should not be speculative, vague, of general nature or an "educated guess". </font></p>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/pdfdocs/wnew/Instruction No 7-2015.pdf" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBDT Instruction No. 07/2015 in F.No.385/21/2015-IT(B)., Dated August 26, 2015</font></strong></a></p>
<p align="center"><font size="3" face="Georgia, Times New Roman, Times, serif"><strong><em><font color="#006600">Bank Holiday on Saturdays - No RTGS </font></em></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>ALL</strong> scheduled and non-scheduled banks - public, private, foreign, cooperative, regional rural and local area banks - will observe public holiday on second and fourth Saturdays from September 01, 2015; and will observe full working days on Saturdays other than second and fourth Saturdays (referred to as working Saturdays). Consequent to this, the Reserve Bank of India will continue to operate fixed rate reverse repo as well as the marginal standing facility (MSF) windows on all working Saturdays between 7:00 pm and 7.30 pm as on any normal business day. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">All money market segments, namely, call/notice/term money, market repo and Collateralised Borrowing and Lending Obligation (CBLO) will remain open on all working Saturdays as on any normal business day. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Payment systems will not be operated on second and fourth Saturdays but would operate for full day on working Saturdays. Payment systems typically includes Real Time Gross Settlement (RTGS), National Electronic Fund Transfer (NEFT), Cheque Clearing operated by various Bankers' Clearing Houses in the country including the grid based Cheque Truncation System (CTS) and ECS suite [Electronic Clearing Service (ECS), Regional Electronic Clearing Service (RECS) and National Electronic Clearing Service (NECS)]. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Processing of future value dated transactions with value date falling on second and fourth Saturdays will not be undertaken under RTGS and ECS suite. </font></p>
<p><a href="http://www.taxindiaonline.com/RC2/pdfdocs/wnew/RBI_Press_Release_528_2015.PDF" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">RBI Press Release 2015-2016/528., Dated August 28, 2015 </font></strong></a></p>
<p><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Until Tomorrow with more <strong>DDT</strong></font></p>
<p><strong><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Have a nice day.</font></strong></p>
<p><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Mail your comments to</font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> <a href="mailto:vijaywrite@tiol.in"><strong>vijaywrite@tiol.in</strong></a></font></p>
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