ACIT, MUZAFFARNAGAR vs. M/S. TIKAULA SUGAR MILLS LTD., MUZAFFARNAGAR

So far the appeals filed by the Revenue are concerned; it is noted that in these cases the tax effect on the income under dispute are less than Rs.10 lacs. The Central Board of Direct Taxes vide Circular No. 21/2015 dated 10th December, 2015 file no.279 of Misc. 142/2007 – ITJ (PT) has issued the direction in suppression of the Instruction No.5/2014 dated 10.07.2014 in pursuance with the power interested u/s.268A of the Income Tax Act that no appeal should be filed before this Tribunal in case tax effect does not exceed Rs.10 lac. The “tax effect” in this regard means the difference between the tax on the total income assessed and the tax that what have been chargeable had such total income been reduced by the amount of income in respect of issues against which appeal is intended to be filed. This circular further states that tax will not include any interest thereon the chargeability of interest itself is in dispute. We further noted that under paragraph 10 which is reproduced as under, it has been mentioned in the circular that this instruction will apply even to the pending appeals. “10. This instruction will apply retrospectively to pending appeals and appeals to be filed henceforth in High Courts/Tribunals. Pending appeals below the specified tax limits in para 3 above may be withdrawn/not pressed. Appeals before the Supreme Court will be governed by the instructions on this subject, operative at the time when such appeal was filed.”

In the impugned cases, we noted that the tax effect on the issues under dispute does not exceed Rs.10 lac. In view of this fact as per the instruction, the Revenue is not supposed to press the appeals. We, therefore, dismiss the appeals filed by the Revenue in limine without going into the merits of the case as in my opinion the circular issued by CBDT are binding on the departmental officers in view of the provision of Section 268A(1) of the Act. The said view has been taken by Hon’ble Supreme Court in the case of Navneet Lal Zaveri Vs. AAC 56 ITR 198 (SC). We accordingly dismiss the appeals filed by the Revenue.

Since, we have already dismissed the appeals of the Revenue in view of Circular No.21/2015 dated 10th December, 2015. The Cross Objections filed by the assessee were supportive to the order of the CIT(A), therefore, they become infructuous. We dismiss the same as infructuous.