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ACIT, Circle 42,New Delhi. Vs. Nisith Chandra Chatterjee,B-14, Basement, Lajpat Nagar-III,New Delhi.
August, 24th 2012
                     (DELHI BENCH `E' : NEW DELHI)

                                      ITA No.615/Del./2012
                                      (Assessment Year : 2007-08)

ACIT, Circle 42,                      Vs.            Nisith Chandra Chatterjee,
New Delhi.                                           B-14, Basement, Lajpat Nagar-III,
                                                     New Delhi.
                                                     (PAN/GIR No.AAAPC2452N)

(Appellant)                                          (Respondent)

                              Assessee by : None
                              Revenue by : Shri R.S. Negi, Sr.DR


PER U.B.S. Bedi, J.M.

        This appeal of the department is directed against the order passed by the CIT (A)-
XXX, New Delhi, dated 16.11.2011, relevant to assessment years 2007-08.

2.      At the time of hearing of the appeal, none appeared on behalf of the assessee. At
the very outset, it was observed that 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.Sr.DR was apprised of this fact, he could not controvert the same and he was also
unable to show that the case of the department falls in any of the exceptions carved out in
the said instructions.

3.      We have heard Ld.DR 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.

                                            2                    I.T.A. No.615/Del./2012
                                                                         (A.Y. : 2007-08)
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
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
              February, 2001.

                     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
                                             3                      I.T.A. No.615/Del./2012
                                                                            (A.Y. : 2007-08)
               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
               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.
                                           4                    I.T.A. No.615/Del./2012
                                                                        (A.Y. : 2007-08)
7.    As a result, the appeal of the department stands dismissed.

      Order pronounced in open court soon after the conclusion of hearing on

          Sd/-                                                      Sd/-
      (B.C. MEENA)                                              (U.B.S. BEDI)
 ACCOUNTANT MEMBER                                           JUDICIAL MEMBER

Dated : Aug. 22, 2012
Copy of the order forwarded to:-
   1. Appellant
   2. Respondent
   3. CIT
   4. CIT(A)-XXX, New Delhi.
   5. DR                                         By Order
                                           Deputy Registrar, ITAT
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