ACIT, Circle II, Moradabad.Vs. Sunil Saran Kothiwal,38, Civil Lines,Moradabad (PAN/GIR No.N.A.)
May, 25th 2012
IN THE INCOME TAX APPELLATE TRIBUNAL
(DELHI BENCH `G' : NEW DELHI)
BEFORE SHRI U.B.S. BEDI, JUDICIAL MEMBER AND
SHRI B.C. MEENA, ACCOUNTANT MEMBER
(Assessment Year : 2004-05)
ACIT, Circle II, Vs. Sunil Saran Kothiwal,
Moradabad. 38, Civil Lines,
Assessee by : Shri B.K. Singh, Adv.
Revenue by : Smt. Shumana Sen, Sr.DR
PER U.B.S. BEDI, J.M.
This appeal of the department emanates from the order passed by CIT(A),
Bareilly, dated 23 March, 2010, relevant to assessment year 2004-05. The assessee's
counsel filed one adjournment request, but at the same time submitted that the appeal was
filed on 9th July, 2010 and the tax involved in this appeal of the Revenue is less than Rs.3
lakhs fixed by CBDT Instruction No.3 of 2011. Therefore, appeal of the department is
liable to be dismissed which may be dismissed.
2. The tax effect in this case is found to be less than Rs.3 lac, the limit prescribed
under Instruction No. 3/2011 dated 09.02.2011 and when Ld.CIT(DR) was apprised of
this fact, she could not controvert the same and she was also unable to show that the case
of the department falls in any of the exceptions carved out in the said instructions.
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3. We have heard both the sides and considered the material on record and find that
the tax effect in this case is undisputedly less than the limit prescribed by Instruction No.
3/2011 and department has not been able to place material to show that its case falls in
the exceptions provided in the said instructions of CBDT and issue is also found to be
covered by various ITAT decisions including that of ITAT Delhi Bench in case of Shri
Vikram Bhatnagar ITA No. 60/D/2002, order dated 10.3.2006.
4. Further Hon'ble Bombay High Court in the case of Pithwa Engg. Works (276 ITR
519), have observed as under :-
"One fails to understand how the Revenue can contend that so far as new
cases are concerned, the circular issued by the Board is binding on them
and in compliance with the said instructions, they do not file references if
the tax effect is less than Rs. 2 lakhs. But the same approach is not
adopted with respect to the old referred cases even if the tax effect is less
than Rs. 2 lakh. In our view, there is no logic behind this approach.
This court can very well take judicial notice of the fact that by passage of
time money value has gone down, the cost of litigation expenses has gone
up, the assessees on the file of the Departments have increased;
consequently, the burden on the department also increased to a
tremendous extent. The corridors of the superior courts are choked with
huge pendency of cases. In this view of the matter, the Board has rightly
taken a decision not to file references if the tax effect is less than Rs. 2
lakhs. The same policy for old matters needs to be adopted by the
Department. In our view, the Board's circular dated March, 27, 2000 is
very much applicable even to the old references which are still undecided.
The Department is not justified in proceeding with the old references
wherein the tax impact is minimal. Thus, there is no justification to
proceed with decades old references having negligible tax effect."
5. It is also seen that recently the Hon'ble jurisdictional High Court vide their order
dated 1.8.2007 in ITA No. 683/2007 in the case of CIT v. Manish Bhambri has upheld
the order of Tribunal vide which the appeal filed by the revenue was refused to be
3 I.T.A. No.3395/Del./2010
entertained because of low tax effect. The said order of Hon'ble jurisdictional High
Court is reproduced below for the sake of convenience :-
"The Revenue is aggrieved by an order dated 8th August, 2006 passed by
the Income Tax Appellate Tribunal, Delhi Bench `D' in IT(SS) No.
513/Del/2003 relevant for the block period 1st April, 1990 to 14th
The question that arose before the Assessing Officer was with
regard to certain deposits in the bank account of the Assessee and since
the amounts were not explained, tax was levied.
In appeal, the Commissioner of Income Tax (Appeals) accepted
the view canvassed by the Assessee and held that the explanation given by
him was acceptable and, in any case, the Assessee cannot be expected to
recollect each and every entry made in the bank.
It may be mentioned that the amount in dispute is Rs. 30,000/- for
the assessment year 1999-2000, and Rs. 83,000/- for the assessment year
2001-2002. It may also be mentioned that for the Assessment year 1999-
2000, the Assessing Officer has already accepted the explanation with
regard to a gift of Rs. 60,000/-
Against the order of the Commissioner of Income Tax (Appeals),
an appeal was filed before the Income Tax Appellate Tribunal. The
Tribunal found that in view of Instructions issued by the CBDT where the
tax effect is less than Re. 1 lakh. The Department should not file an
appeal before the Tribunal. In the present case the tax effect is less than
Re. 1 lakh. Under the circumstances, the Tribunal did not entertain the
The Revenue, feeling aggrieved by the decision of the Tribunal,
has come up before us under Section 260A of the Income Tax Act, 1961.
It is contended by learned counsel for the Revenue that the Tribunal is a
fact finding authority and should have adjudicated the matter on merits.
We are of the view that the issue raised by the Revenue is not at all
substantial and the amount in dispute is quite insignificant, considering
that the case is one of a block assessment. There is no justification for the
Income Tax Department to go on burdening the Tribunal, the Court with
every case right up to the end. Apart from burdening the Tribunal and
Courts, it also causes avoidable expenses to the Assessee. It is common
knowledge that the Assessee has to pay for legal fees and merely because
4 I.T.A. No.3395/Del./2010
the Income Tax Department has got unlimited resources, there is no
justification that every case should be dragged on.
Under the circumstances, we are of the view that the Tribunal was
justified in refusing to entertain the appeal because of the insignificant
amount involved in the matter. No substantial question of law arises.
We, therefore, dismiss this appeal."
6. Since, tax effect is less than the limit prescribed, so in view of the instructions and
precedents of courts as cited above including that of Delhi High Court, the appeal is held
to be not maintainable, as such, is dismissed.
7. As a result, the appeal of the department gets dismissed.
Order pronounced in open court soon after the conclusion of the hearing on
(B.C. MEENA) (U.B.S. BEDI)
ACCOUNTANT EMBER JUDICIAL MEMBER
Dated : May 23 , 2012
Copy of the order forwarded to:-
4. CIT(A), Bareilly.
5. CIT(ITAT) Deputy Registrar, ITAT
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