1. These are two appeals filed by the revenue against the separate orders of the learned Commissioner of Income-tax (Appeals)-IV, Kolkata in appeal no. 297.CIT(A)IV/08-09 and in appeal no. 295.CIT(A)-IV/08-09 dated 24-03-2010 for the assessment years 2002-2003 and 2005-2006 respectively.
2. Shri A.K Singh, learned CIT/Sr. DR represented on behalf of the revenue and Shri Vigyaneshwar Nath Datta, Advocate, learned AR represented on behalf of the assessee.
3. At the time of hearing of the appeal before us, it was submitted by the Ld. Counsel for the assessee that the tax effect in this case excluding interest is being less than Rs. 2 lakhs and as per revised Circular No. 279.Misc.-64/05-ITJ dated 24.10.05 CBDT has directed the Revenue Authorities to file appeal only in those cases where the tax effect exceeds the monetary limit of Rs. 2 lakhs except in cases involving substantial question of law. It has further been submitted by the ld. Counsel for the assessee that such instruction of CBDT has come into force for the appeals to be filed on or after 31.10.2005 and since in the present case appeal has been filed on 15 February, 2008, the above Circular of CBDT is well applicable and, therefore, the appeal filed by the Revenue is liable to be dismissed keeping in view of the above Circular/Instruction.
4. During the course of hearing, the ld. A.R of the assessee has further pointed out that the tax effect is less than Rs. 2 lakhs and as such the appeal filed by the Department is not maintainable in view of the Board's Instruction No. 1979 (F. 279/126/96.ITJ) dated 27 March, 2000 and further explained by the Instruction No. 1985 dated 29 June, 2000 (F. No. 279/126/98-ITJ) and Instruction No. 5 dt. 16.7.07 clarifying only tax effect that no second appeal is to be filed if the tax effect is less than prescribed limit by CBDT.
4.1 The Ld. A.R of the assessee submitted that the Revenue's appeal should be dismissed in view of the decisions of the Bombay High Court in the case of CIT v. Camco Colour Ltd. reported in 254 ITR 565 wherein it has been held that the Circular is binding on the revenue and an appeal or reference contrary to the instruction issued in the circular would not be considered by the Court and also in the case of Pithwa Engineering Works reported in 276 ITR 519 Mumbai.
5. However, the Ld. D.R has submitted that the Board's Circular restricting the revenue effect for filing an appeal before the Tribunal should not be hindrance in not filing an appeal and in view of the judgment of Hon'ble Allahabad High Court in case of Jugal Kishore Arora v. DCIT reported in 269 ITR 133 and the order of Punjab & Hariyana High Court in case of Rani Paliwal v. Commissioner Of Income-Tax reported in 268 ITR 220.
6. We observe that the tax payable in respect of grounds of appeal by the Department is less than Rs. 2 lakhs and as per revised Instruction of the CBDT No. 279 dated 24 October, 2005 w.e.f 31.10.2005, the revenue should have refrained from filing second appeal before the Tribunal. It would be apt to quote the observation of the Delhi High Court in the case of CIT v. ITAT, 232 ITR 207 at page 216 as below:—
“The Central Board of Direct Taxes instructions are binding on the Department. If the case at hand is covered by a policy laid down by the Central Board of Direct Taxes in that case no fault can be found with the order of the Tribunal refusing to state the case and there is no reason why the High Court should interfere with such discretion of the Tribunal as has been exercised consistently with the uniform policy laid down by the Central Board of Direct Taxes which binds all the subordinate authorities of the Income Tax Department. The High Court would not ordinarily encourage breach of policy decisions and the Departmental Instructions which have a public purpose behind them. Valuable time of High Courts and highly placed Tribunals is not to be wasted on petty matters”.
7. In view of the above, we hold that the appeal filed by the Department against the impugned 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.
8. In the result, the appeals filed by the Revenue are dismissed.