SECTION 268A OF THE INCOME-TAX ACT, 1961 - APPEALS AND REVISION - FILING OF APPEAL OR APPLICATION FOR REFERENCE BY INCOME-TAX AUTHORITY - CBDT's INSTRUCTION NO. 3/2011, DATED 9-2-2011 REVISING MONETARY LIMITS NOT TO APPLY IPSO FACTO TO APPEALS FILED PRIOR TO 9-2-2011
LETTER NO. DIT(L&R)-I/SLP/393/2011/4589, DATED 2-9-2011
1. Kindly refer to the above.
2. In a large number of cases Hon'ble Delhi High Court has summarily dismissed the appeals filed by the department prior to 9-2-2011 on the ground that the tax effect involved was less than the revised monetary limits of tax effect involved prescribed by CBDT Instruction No. 3/2011, dated 9-2-2011.
3. As per Instruction No. 3/2011 the revised monetary limit was applicable only for the appeals filed on or after 9-2-2011 i.e. the date of issue of Instruction. As per para 11 of the Instruction, it was clarified that the appeals filed earlier would be governed by the old instructions operative at the time of filing.
4. On this issue SLP was filed in Supreme Court and one case namely Surya Herbal came up for hearing before the Hon'ble Supreme Court on 29-8-2011. The order passed by the Hon'ble Court in that case in SLP(C) CC No. 13694 of 2011 is enclosed herewith (see Annexure). The Supreme Court has directed that review petition be filed in High Court within two weeks. In such cases the attention of the High Court may be drawn to the observations of Supreme Court with a prayer not to apply the Instruction No. 3/2011 ipso facto in respect of appeals filed prior to 9-2-2011.
5. In view of the above, the Board desires that in all such cases (including the cases in which proposal to file SLP has been sent to Directorate of Legal & Research) immediate steps be taken to file review petition in High Court pointing out the observations of Supreme Court. The officers may be advised not to send any proposals henceforth to file SLP in such cases.
SUPREME COURT OF INDIA
Commissioner of Income-tax Central-III
Surya Herbal Ltd.
CHIEF JUSTICE; K.S. RADHAKRISHNAN
AND SWATANTER KUMAR, J.
AND SWATANTER KUMAR, J.
CC NO. 13694/2011
AUGUST 29, 2011
Goolam E. Vahanvati, Rupesh Kumar, Anand Kannan and B.V. Balaram Das for the Petitioner.
Liberty is given to the Department to move the High Court pointing out that the Circular, dated 9-2-2011, should not be applied ipso facto, particularly, when the matter has a cascading effect. There are cases under the Income-tax Act, 1961, in which a common principle may be involved in subsequent group of matters or large number of matters. In our view, in such cases if attention of the High Court is drawn, the High Court will not apply the Circular ipso facto. For that purpose, liberty is granted to the Department to move the High Court in two weeks.
The special leave petition is, accordingly, disposed of.