The Commissioner Of Income Tax v. M/S. Moolji Lukhmidass

IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICGTION INCOME TAX REFERENCE NO. 700of 1987 The Commissioner of Income Tax ... Applicant. vs. M/s. Moolji Lukhmidass ..... Respondent Dr. P. Daniel for Applicant. Mr. D. S. Mhaispurkar for Respondent. CORAM: V. C. DAGA AND A. S. AGUIAR JJ.Date: 29[th] June, 2005. P. C.: 1. By this reference under section 256 (1) of the Income Tax Act,1961, the Income Tax Appellate Tribunal has referred the followingquestions of law for the opinion of this court: 1961, the Income Tax Appellate Tribunal has referred the followingquestions of law for the opinion of this court: “Whether on the facts and circumstances of the case,penalty of Rs.74,163/- was leviable under section 271(1)(c), on the assessee firm for Assessment Year 1975-76?” 2. Heard learned counsel for both the applicant and the Respondent.Perused reference proceedings. Perused reference proceedings. 3. The learned counsel for the Respondent – assessee invited ourattention to the instructions issued by the Central Board of DirectTaxes , New Delhi, dated 27[th] March, 2000 wherein monetary limit forthe department for filing reference to the High Court earlier fixed forattention to the instructions issued by the Central Board of DirectTaxes , New Delhi, dated 27[th] March, 2000 wherein monetary limit forthe department for filing reference to the High Court earlier fixed for Rs.50,000/- came to be revised and fresh instructions are issued bythe Board to file reference only in cases where tax effect exceedsRs.2,00,000/-. Learned counsel for applicant – revenue could notdispute this fact. 4. This Court in the case of Commissioner of Income-tax v/s. CamcoColour Co., reported in ITR Vol. 254 (2002), page 565 ruled that theabove instructions are binding on the Department. Colour Co., reported in ITR Vol. 254 (2002), page 565 ruled that theabove instructions are binding on the Department. 5. The above instructions dated 27[th] March, 2000 reflects the policydecision taken by the Board not to raise questions of law where thetax effect is less than the amount prescribed in the instructions with aview to reduce litigation before High Courts and Supreme Court. Thecircular is binding on the Revenue. There is no justification toproceed with the decades old references having negligible tax effect. decision taken by the Board not to raise questions of law where thetax effect is less than the amount prescribed in the instructions with aview to reduce litigation before High Courts and Supreme Court. Thecircular is binding on the Revenue. There is no justification toproceed with the decades old references having negligible tax effect. 6. We, thus, do not think it necessary to answer the reference made tothis Court for the Assessment Year 19875-76. Accordingly,reference stands returned unanswered with no order as to costs. this Court for the Assessment Year 19875-76. Accordingly,reference stands returned unanswered with no order as to costs. (A. S. AGUIAR J.) (V. C. DAGA J. ) -x-