The Commissioner Of Income Tax, Pune v. The Roha Ashtami Co-Op. Urban Bank Ltd

IN THE HIGH COURT OF JUDICATURE AT BOMBAYORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX REFERENCE NO. 490 OF 1997 The Commissioner of Income Tax, Pune Vs. The Roha Ashtami Co-op. Urban Bank Ltd. ..Applicant ..Respondent .... Mr. Suresh Kumar, Advocate for Applicant. .... P.C.: CORAM : M.S. SANKLECHA & G.S. KULKARNI, JJ.DATED : 21 AUGUST 2015 This reference under Section 256(1) of the Income Tax Act, 1962 for the Assessment Years 1989-90 to 1991-92 raises thefollowing question of law for our opinion: “Whether, on the facts and in the circumstances of thecase, the Tribunal was right in law in holding that theinterest earned on the deposits in Indira VikasPatras/Kisan Vikas Patras at the instance of the StateGovernment is income from the banking activities and,therefore, the assessee is entitled to exemption u/s 80Pof the Act?” 2.Mr. Suresh Kumar, the learned Counsel for the revenuestates that the tax effect in the present reference for A.Y. 1989-90 isRs.2,46,778/-, for A.Y. 1990-91 is Rs.1,53,155/- and for A.Y. 1991-92 is Rs.1,28,730/- aggregating to Rs.5,28,663/-. 3.On 24 July 2015, we had in an order passed in IncomeTax Reference No. 430/1997 (Commissioner of Income Tax Vs. M/sComputer Point (I) Ltd.), while returning the reference unansweredmade the following observations: “Therefore, in view of the Instruction No.5 dated10 July 2014 read with decision of this Court inCommissioner of Income Tax Vs. Madhukar Inamdar(HUF) – 318 ITR 149; Commissioner of Income Tax Vs.Pithwa Engineering Works– 276 ITR 598 andCommissioner of Income Tax Vs. Vijaya Kawekar - 350ITR 237 (dealing with earlier Circulars/Instructions) theinstructions of 2014 issued by CBDT would also beapplicable to pending appeals and references. 5. In fact this Court in Madhukar Inamdar (HUF) haswhile dealing with Circular dated 15 May 2008 observed asunder: “8. This Court can very well take judicial notice ofthe fact that by passage of time money value has gone down, the cost of litigation expenses has gone up, filing of cases atthe instance of the Revenue has increased; consequently, theburden on the department has also increased to atremendous extent. The corridors of superior courts arechoked with huge pendency of cases. ….. In this view theBoard has rightly taken a decision not to file appeals, if thetax effect is less than Rs.4 lakhs so as to reduce the burdenof the Department as well as of the Tribunals and Courts.The same policy for old matters needs to be adopted by thedepartment, so as to achieve the object of the policy laiddown by the Central Board of Direct Taxes.” 6. Nothing has been shown to us to indicate that the issueraised in this particular reference would fall within theexclusion clause of the 2014 Circular nor that the issue has acascading effect or would otherwise be covered by the ApexCourt decision in Commissioner of Income Tax Vs. SuryaHerbal Ltd. - 350 ITR 300. In view of the above, we returnthe reference unanswered.” 4.The above observations are apposite to the present facts. Thus the present reference which has tax effect aggregating toRs. 5,28,663/- is being returned unanswered as having low taxeffect. [G.S. KULKARNI, J][M.S. SANKLECHA, J.] S.S.DESHPANDE