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Section 260A of the Income-tax Act, 1961 - High Court - Appeal to - Assessment years 1992-93 and 1993-94 - Clarification issued by Central Board of Direct Taxes vide O.M. dated 15-5-2008 that notional tax effect is also to be taken into account while calculating tax effect and examining maintainability of appeals to High Court would apply prospectively; prior to this, actual tax effect and not notional tax effect was to be taken into consideration in accordance with circular dated 24-10-2005 [In favour of assessee] The revenue filed an appeal against the order of the Tribunal in December, 2007. The assessee contended that the appeals pertained to the assessment years 1992-93 and 1993-94 and in both these years the assessee had filed the return with no actual tax effect; that assessment was completed at a loss and, therefore, there was no 'tax effect'. The assessee pointed out that having regard to the Central Board of Direct Taxes circular which was prevalent at the relevant time, appeals could not be filed when the tax effect was neutral. No doubt, he conceded that thereafter clarification was issued by the Central Board of Direct Taxes vide O. M. dated 15-5-2008 according to which the notional tax effect was to be taken into account. However, his submission was that this O. M. was made operative only prospectively and was to be applicable in respect of appeals filed on or after 15-5-2008. Held that the clarification issued by the CBDT vide O.M. dated 15-5-2008 had to be treated as having prospective application, more so when paragraph 11 thereof specifically so provides. It would be more so when the same was to the prejudice of the assessee. Therefore, the appeals were not maintainable and were dismissed on this ground alone. CASES REFERRED TO CIT v. Ashok Kumar Manibhai Patel and Co. [2009] 317 ITR 386 (MP), CIT v. Nanak Ram Jaisinghania[2009] 317 ITR 302 (Delhi), CIT v. Pithwa Engineering Works [2005] 276 ITR 519 (Bom.), CIT v. Pradeep Kumar Gupta [2008] 303 ITR 95 (Delhi), CIT v. P.S. Jain and Co. [2011] 335 ITR 591 (Delhi) Ms. Prem Lata Bansal and Deepak Anand for the Appellant. Kanan Kapur for the Respondent. JUDGMENT A. K. Sikri, J. - The Central Board…

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