CIT vs. Virendra & Co (Bombay High Court)

DATE: (Date of pronouncement)
DATE: August 17, 2012 (Date of publication)

Click here to download the judgement (virendra_low_tax_effect_circular.pdf)

Low Tax Effect Circular is retrospective & applies to pending appeals

The department filed an appeal in June 2000, the tax effect of which was less than Rs. 10 lakhs. The assessee claimed, relying on Instruction No. 3/2011 dated 9.2.2011, that as the tax effect was less than Rs. 10 lakhs, the appeal was not maintainable. The department opposed the plea on the ground that the said Instruction was prospective and did not apply to appeals filed before 9.2.2011. HELD by the High Court dismissing the appeal:

S. 268A was inserted by the Finance Act 2008 w.r.e.f. 1.4.1999 to reduce litigation in small cases and regulate the right of Revenue to file or not to file appeal. Instruction no.3/2011 dated 9.2.2011 has been issued by the CBDT pursuant to this power. Though clause 11 provides that the instruction would apply to appeals filed on or after 9.2.2011 and appeals filed that date would be governed by the instructions operative at the time the appeal was filed, in a number of cases, it has been interpreted to mean that the monetary limits specified in the Instruction would apply to pending appeals as well (Vijaya V. Kavekar (Bom) followed (included in file).

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