Law:

Section:

Section 119 of the Income-tax Act, 1961 - Central Board of Direct Taxes - Instructions to subordinate authorities - Whether where tax effect is below monetary limit prescribed in Circular dated 24-10-2005, revenue cannot file an appeal in transgression of Circular by which it is bound; however, in a case which falls within excepted category, it would be open to department to bring it to notice of forum approached and to insist that question being covered by exceptions contained in clause 3 of aforesaid Circular, same deserves to be considered by superior Forum - Held, yes Circular and Notification : CBDT Circular dated 24-10-2005. FACTS The Tribunal declined to decide the revenue's appeals on merit on the ground that the tax effect in the case was less than Rs. 2,00,000 and, therefore, the appeal was contrary to the explicit instructions of the CBDT in Circular dated 24-10-2005 to the effect that where the tax effect was less than Rs. 2,00,000, appeal should not be filed. HELD The Circular dated 24-10-2005 issued by the Central Board of Direct Taxes carves out only one exception with regard to the permissibility of filing of appeals, etc., that cases, where the question of law involved or raised in appeal is of recurring nature to be decided by the Court, should be separately considered on merits notwithstanding the embargo contained in the Circular of the monetary limit. The question arose as to whether the Department can be left at liberty to defeat the Circular of the CBDT restraining its power to file appeal in case of the tax effect being below the monetary limit by capriciously taking subterfuge under the specious plea that the case is one of the excepted category of cases. It had not been brought to notice that the Income-tax Department had devised any procedure to consider whether a particular case falls within the excepted category and, thus, permitting the revenue to agitate the matter before the high forums. In cases where no such procedure has been devised, it is expected that while filing appeal in non-adherence of the Circular, the Department would place material before the appellate forum that the case falls within the excepted category and,…

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