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Section 260A of the Income-tax Act, 1961 - High Court, appeal to - Whether in view of Instruction No. 2/2005, dated 24-10-2005, issued by CBDT, it has to be directed that wherever tax effect is less than Rs. 4 lakhs, department should not file appeal under section 260A, unless question of law involved or raised in appeal is of recurring nature which is required to be settled by High Court - Held, yes Circulars, Notifications & Instructions : Instruction No. 2/2005, dated 24-10-2005 CASES REFERRED TO CIT v. Camco Colour Co. [2002] 254 ITR 565 / 122 Taxman 336 (Bom.) (para 3) and CIT v. Pithwa Engg. Works [2005] 276 ITR 519 (Bom.) (para 3). Ashok Kotangale and P.S. Sahadevan for the Appellant. JUDGMENT 1. Heard the learned counsel for the appellant. Perused the petition. 2. We, during the course of exercising our appellate jurisdiction under section 260A of the Income-tax Act, 1961, (for short "the Act") noticed that in a quite few matters in spite of the circulars Instructions of the Central Board of Direct Taxes (Ministry of Finance Department), one of them being dated 24-10-2005, (which clearly stipulates that the Income-tax Department should not file appeals under section 260A of the Act, wherein the tax effect is less than Rs. 4 lakhs), the Department is filing appeals without following the guidelines laid down in the said circular. 3. At this juncture, it will also be relevant to note that through our two judgments in the case of CIT v. Camco Colour Co. [2002] 254 ITR 565 /122 Taxman 336 (Bom.) and another in the case of CIT v. Pithwa Engg. Works [2005] 276 ITR 519 (Bom.), it is categorically ruled that the circulars issued by the Central Board of Direct Taxes, from time to time, are binding on the Income-tax Department, since they have a statutory force. The said judgments clearly lay down that the Department is not expected to file appeals wherein the tax effect is less than Rs. 2 lakhs, now revised to Rs. 4 lakhs. 4. In view of the circulars of the Central Board of Direct Taxes and our judgments referred to hereinabove, we expect from the Income-tax Department that wherever tax effect is less than the limit prescribed in the…

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