1. By this appeal filed under section 260A of the Income-tax Act, 1961, the Revenue has challenged the order dated… July, 2001, passed by the Income-tax Appellate Tribunal, Mumbai, and raised the following substantial question of law:
“Whether, on the facts and in the circumstances of the case and in the law, the Tribunal is correct in dismissing the appeal of the Revenue and confirming the order of the Commissioner of Income-tax (Appeals) as regards the expenses claimed by the assessee for earning the incentive bonus, other than the standard deduction?”
2. Heard the learned counsel for the appellant.
3. Learned counsel for the appellant-Revenue invited our attention to the instructions issued by the Central Board of Direct Taxes, New Delhi, dated March 27, 2000, wherein the monetary limit for the Department for filing reference/appeal to the High Court earlier fixed for Rs. 50,000 came to be revised and fresh instructions are issued by the Board to file references only in cases where the tax effect exceeds Rs. 2,00,000.
4. Learned counsel for the appellant-Revenue fairly admits that the stake of the Revenue in this case is Rs. 6,000 to Rs. 7,000.
5. This court in the case of Commissioner Of Income-Tax… v. Camoo Colour Co.…., [2002] 254 ITR 565 ruled that the above instructions are binding on the Department. This judgment is followed by this court in CIT v. Pitthwa Engg. Works, [2005] 276 ITR 519 and held that it is not open for the Department to contend that this circular is binding only with respect to new cases and not with respect to old cases even if the tax is less than Rs. 2 lakhs. The same policy for old matters needs to be adopted by the Department.
6. The above instructions dated March 27, 2000, reflect the policy decision taken by the Board not to raise questions of law where the tax effect is less than the amount prescribed in the instructions with a view to reduce litigation before the High Courts and the Supreme Court. The circular is binding on the Revenue. There is no justification to proceed with the appeal having tax effect less than Rs. 7,000.
7. We, thus, do not think it necessary to entertain this appeal and answer the question raised by the appellant-Revenue. Accordingly, the appeal stands dismissed with no order as to costs.