ITO,WARD-7(1), KOLKATA, KOLKATA vs. M/S. AGARWALA PROPERTIES LTD, KOLKATA

In this appeal the revenue has taken the following ground :- 1) That on the facts and circumstances of the case and in law, the ld. CIT(A)-VIII, Kolkata has erred in directing the AO to accept the rental value of Rs.14,34,678/- as shown by the appellant/assessee of the said properties as against the estimated notional value of Rs.23,78,688/- determined by the AO during the course of assessment which is perverse and is totally unlawful and unjustifiable. 2) That on the facts and circumstances of the case and in law the ld.CIT(A)-VIII, Kolkata has erred in not considering the treatment of house property income, in spite of fulfilling the conditions of Section 22 of the Income Tax Act, 1961. He has also chosen neither to discuss the case- law/s referred by the Assessing Officer nor has the one relied upon by the assessee, thereby, making the deletion perverse, unlawful and unjustified. 3) That on the facts and circumstances of the case and in law, the ld.CIT(A)-VIII, Kolkata erred in directing to allow set off the income from 1 T.E M/s. Agarwala Properties Ltd

At the time of hearing, the ld. Counsel for the assessee submitted that the tax effect in this appeal is below Rs. 3 lakhs and filed computation of tax effect and served a copy of the same to ld.DR. The ld.DR appearing on behalf of the revenue conceded that the tax effect in this appeal is below Rs. 3 lakhs. The Central Board of Direct Taxes (CBDT) in their Circular CBDT instruction No.3/2011 (F.No. 279/MISE/142/2007-ITJ) dated 9.2.2011 has enhanced the limits for filing of appeal before the Tribunal to Rs. 3 lakhs. This appeal by the revenue has been filed before the Tribunal on 12-09-2012 and, therefore, the monetary limits for filing appeal before the Tribunal has to be adhered.

Admittedly, the tax payable in respect of grounds of appeal by the Department is less than Rs. 3 lakhs and as per revised Instruction of the CBDT No.3 dated 9.2.2011 wherein the CBDT has revised the filing limits of appeal(s) filed before the Tribunal, High Court and Supreme Court as under:- “Before the Income Tax Appellate Tribunal : Rs. 3 lakhs Appeals u/s. 260A of the I.T Act 1961 Before the Hon’ble High Court : Rs. 10 lakhs, and Before the Hon’ble Supreme Court : Rs. 25 lakhs “

It is a settled law that the Circulars issued by the CBDT are binding on the Revenue. This position was confirmed by the Hon’ble Apex Court in the case of Commissioner of Customs Vs. Indian Oil Corporation reported in 267 ITR 272(SC), wherein their Lordships examined the earlier decisions of the Hon’ble Apex Court with regard to binding nature of the Circular and laid down that when a circular issued by 2 T.E M/s. Agarwala Properties Ltd the Board remains in operation then the Revenue is bound by it and cannot be allowed to plead that it is not valid or that it is contrary to the terms of the statute. This appeal under consideration has certainly been filed contrary to the Circular issued by the CBDT Instruction No.3 dated 9-2-2011.

In view of the above, we hold that the present appeal filed by the Department, against the impinged order of the ld.CIT(A) is contrary to the policy decision of the Department and as such the appeal filed by the Department is dismissed in limine.

In the result, the appeal filed by the Revenue is dismissed.