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Judgment
Both the appeal arise out of an order passed by the Patna Bench of the Income Tax Appellate Tribunal.
Both the appeals have been admitted by order dated September 3, 2003, on the following substantial question of law:
Whether interest is to be levied on the tax determined on the basis of returned income or on the assessed income in view of the amendments made in Sections 234A and 234B of the Income Tax Act, 1961?
When the matter is taken up Mr. Vikash Jain appearing on behalf of the respondent-assessee prays for dismissal of the appeal only on the ground that in view of insertion of Section 268A of the Income Tax Act, by the Finance Act, 2008, with retrospective effect from April 1, 1999, read with the notification of the Central Board of Direct Taxes dated October 28, 1992, fixing the monetary limit for filing these appeals, these appeals are not fit to be entertained and adjudicated.
It is not in dispute that tax/revenue effect in both the cases is less than Rs. 50,000 each. It is further not in dispute that the Central Board of Direct Taxes, vide notification dated October 28, 1992, had decided not to make any reference before the High Court where the revenue effect is less than Rs. 50,000. It is further not in dispute that another notification dated March 27, 2000, has been issued by the Central Board of Direct Taxes in which the following decision has been taken:
In supersession of the above instruction, it has now been decided by the Board that appeals will be filed only in cases the tax effects exceeds the revised monetary limits given hereunder:
(Rs.) (i) Appeal before the Appellate Tribunal (in Income Tax matters) 1,00,000 (ii) Appeal u/s 260A/reference u/s 256(2) before 2,00,000 the High Court (iii) Appeal in the Supreme Court 5,00,000
It has been pointed out by Mr. Jain that the instruction issued by the Board fixing monetary limits for filing appeal and application for reference shall be deemed to have been issued under Sub-section (1) of Section 268A of the Income Tax Act in view of the provision made in Section 268A(5) of the Act. Hence, according to Mr. Jain, both the appeals involving tax effect of less than Rs. 50,000 each deserves to be thrown out on the ground that it violates the Board''s instruction.
Mr. Harshwardhan Prasad, however, contends that though the notification of the Central Board of Direct Taxes dated October 28, 1992, is binding on the Revenue but the said notification prohibits making reference when tax effect is less than Rs. 50,000 but does not bar filing of the appeal.
This ingenious argument of Mr. Prasad deserves to be rejected outright. It is relevant here to state that on the date, i.e., October 28, 1992, when the Central Board of Direct Taxes issued the instruction, there was no provision for appeal before the High Court. Section 260A of the Income Tax Act which provides for appeal to the High Court has been inserted by the Finance (No. 2) Act, 1998, with effect from October 1, 1998. In the circular dated March 27, 2000, the tax effect exceeding revised monetary limits has been provided for filing the appeal u/s 260A and reference u/s 256(2) of the Income Tax Act before the High Court. In the background of the aforesaid, it cannot be said that the monetary limits fixed for reference shall not apply in the case of appeal.
It is worth mentioning that the instruction of the Central Board of Direct Taxes dated October 28, 1992, shall be deemed to have issued u/s 268A(1) of the Income Tax Act, 1961, in view of Section 268A(5) of the Act. Thus, the instruction dated October 28, 1992, fixing monetary limit for filing appeal has statutory flavour and in the background thereof we are of the opinion that these appeals are incompetent.
In the result we dismiss these appeals on the aforesaid ground alone, but without any order as to costs.