CIT vs. Suman Dhamija (Supreme Court)

DATE: July 1, 2015 (Date of pronouncement)
DATE: August 26, 2015 (Date of publication)
AY: -
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CBDT Instruction No. 3/2011 dated 9.2.2011 specifying monetary limits for filing appeals by the department applies only to appeals filed after that date and not to pending appeals

The Supreme Court had to consider whether Instruction No. 3/2011 dated 9.2.2011 issued by the Central Board of Direct Taxes setting out limits for filing appeals to the ITAT and the High Courts applied even to appeals filed before the date of the Instruction. The High Court dismissed the appeals of the Department on the ground that the said Instruction applied even to appeals filed before that date. On appeal by the department to the Supreme Court HELD reversing the High Court:

The appeals and review petitions preferred by the department before the High Court, were disposed of on the basis of the instructions issued by the Central Board of Direct Taxes dated 9.2.2011. It is not a matter of dispute, that all the appeals were preferred prior to 2011, whereas, the instructions dated 9.2.2011 clearly indicate in paragraph 11 thereof, that they shall not govern cases which have been filed before 2011, and that, the same will govern only such cases which are filed after the issuance of the aforesaid instructions dated 9.2.2011. In view of the above, the instant appeals are allowed, the impugned orders passed by the High Court hereby set aside. The matters are remitted back to the High Court for re-adjudication of the appeals on merits, in accordance with law.

Note: This reverses the judgements in Madhukar K. Inamdar 318 ITR 149 (Bom), Pithwa Engineering 276 ITR 519 (Bom) & Ashok Patel 317 ITR 386 (MP) CIT Vs. Varsha Dilip Kolhe (2013) 350 ITR 248 but affirms CIT vs. Shambhubhai Mahadev Ahir and CIT vs. M/s Varindera Construction Co (P&H High Court – Full Bench)(Gujarat High Court – Full Bench) and CBDT Circular That Monetary Limits For Filing Appeals Are Applicable Prospectively

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