Ita/18/2008 Of The Commissioner Of Income Tax v. K.sreekantan Pillai

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT:- THE HONOURABLE THE CHIEF JUSTICE MR.H.L.DATTU & THE HONOURABLE MR. JUSTICE A.K.BASHEER THURSDAY, THE 17TH JULY 2008 / 26TH ASHADHA 1930 I.T.A.No.18 of 2008 ---------------------------------- I.T.A.NO.477/COCH/2006 OF THE INCOME TAX APPELLATE TRIBUNAL, COCHIN BENCH, COCHIN (ORDER DATED 9.10.2006) (ASSESSMENT YEAR 2003-04) .................... APPELLANT/APPELLANT:- -------------------------------------- THE COMMISSIONER OF INCOME TAX, THIRUVANANTHAPURAM. BY STANDING COUNSEL FOR GOVERNMENT OF INDIA (TAXES) SRI.P.K.R.MENON (SENIOR ADVOCATE) & STANDING COUNSEL FOR GOVERNMENT OF INDIA (TAXES) SRI.GEORGE K. GEORGE. RESPONDENT/RESPONDENT:- -------------------------------------------- SRI. K. SREEKANTAN PILLAI, THOTTATHIL RUBBERS, KOTTUKAL, ANCHAL. BY ADV. SRI.S.MOHAMMED AL RAFI. THIS INCOME TAX APPEAL HAVING COME UP FOR ADMISSION ON 17/07/2008, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:- --------------------------------------------- --------------------------------------------- Dated, this the 17[th] day of July, 2008 JUDGMENT H.L.Dattu,C.J. This Income Tax Appeal is directed against the orders passedby the Income Tax Appellate Tribunal, Cochin Bench, Cochin inI.T.A.No.477 of 2006, for the assessment year 2003-04, dated 9[th] October,2006. The Tribunal has rejected the Revenue's appeal only on the ground thatthe tax effect in the appeal filed by the assessee is less than Rupees TwoLakhs. 2. In the memorandum of appeal filed, the Revenue hasasserted, that, in view of the Board's Circular dated 24.10.2005, even thoughthe monetary limit of tax effect does not exceed more than Rupees TwoLakhs, since it involves a substantial question of law of importance, whichis urged in the appeal and which may arise in future cases, the Tribunalshould consider the appeal and decide the same on merits without beinghindered by the monetary limits. 3. The Tribunal, without considering the aforesaid aspect ofthe matter, has rejected the appeal, is the grievance of the Revenue and itslearned counsel. Reliance is placed on Board's Circular dated 20.10.2005. 4. The Board's intimation/circular dated 24.10.2005 is as under: “Sub:- Revision of monetary limits for filing appeals by Department before various appellate bodies or appellateauthorities - clarification therefore - regarding. ---- Reference is invited to Board's instruction No.1979dated 27.3.2000 [F.No.279/126/98-IT] dt.27.3.2000] andInstruction No.1985 dated 29.6.2000 [F.No.279/126/98-IT]dated 29.6.2000] wherein monetary limits for filingappeals/references before various appellate authoritieshave been prescribed. 2. In partial modification of the above Instruction, ithas now been decided by the Board that appeals willhenceforth be filed only in cases where the tax effectexceeds the revised monetary limits given hereunder:- 3. The Board has also decided that in casesinvolving substantial question of law of importance as wellas in cases where the same question of law will repeatedlyarise; either in the case concerned or in similar cases,should be separately considered on merits without beinghindered by the monetary limits. xxxxxx”. 5. Para 3 of the said Circular would make it clear that in a case involving a substantial question of law, the Tribunal, without being hindered by the monetary limit, is expected to decide the question of law raised. 6. In the instant case, the Tribunal, without adverting to theaforesaid aspect of the matter and merely on the ground that the tax effectwould not exceed more than Rupees Two Lakhs, has rejected the appeal. Inour view, in view of what has been said by the Board in its Circular dated24[th] October, 2005, it is difficult for us to sustain the orders passed by theTribunal. 7. Therefore, we pass the following: Order (i) The order passed by the Tribunal is set aside. xxxxxx”. 5. Para 3 of the said Circular would make it clear that in a case involving a substantial question of law, the Tribunal, without being hindered by the monetary limit, is expected to decide the question of law raised. 6. In the instant case, the Tribunal, without adverting to theaforesaid aspect of the matter and merely on the ground that the tax effectwould not exceed more than Rupees Two Lakhs, has rejected the appeal. Inour view, in view of what has been said by the Board in its Circular dated24[th] October, 2005, it is difficult for us to sustain the orders passed by theTribunal. 7. Therefore, we pass the following: Order (i) The order passed by the Tribunal is set aside. (ii) The matter is remanded back to the Tribunal to consider theRevenue's appeal in accordance with law, keeping in view the Circularissued by the Board dated 24[th] October, 2005. (iii) All the contentions of the parties are left open. Ordered accordingly. H.L.Dattu Chief Justice vku/- A.K.Basheer Judge