IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT:- THE HONOURABLE THE CHIEF JUSTICE MR.H.L.DATTU & THE HONOURABLE MR. JUSTICE A.K.BASHEER THURSDAY, THE 17TH JULY 2008 / 26TH ASHADHA 1930 I.T.A.No.18 of 2008 ---------------------------------- I.T.A.NO.477/COCH/2006 OF THE INCOME TAX APPELLATE TRIBUNAL, COCHIN BENCH, COCHIN (ORDER DATED 9.10.2006) (ASSESSMENT YEAR 2003-04) .................... APPELLANT/APPELLANT:- -------------------------------------- THE COMMISSIONER OF INCOME TAX, THIRUVANANTHAPURAM. BY STANDING COUNSEL FOR GOVERNMENT OF INDIA (TAXES) SRI.P.K.R.MENON (SENIOR ADVOCATE) & STANDING COUNSEL FOR GOVERNMENT OF INDIA (TAXES) SRI.GEORGE K. GEORGE. RESPONDENT/RESPONDENT:- -------------------------------------------- SRI. K. SREEKANTAN PILLAI, THOTTATHIL RUBBERS, KOTTUKAL, ANCHAL. BY ADV. SRI.S.MOHAMMED AL RAFI. THIS INCOME TAX APPEAL HAVING COME UP FOR ADMISSION ON 17/07/2008, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:- H.L.Dattu, C.J. & A.K.Basheer, J. --------------------------------------------- I.T.Appeal No.18 of 2008 --------------------------------------------- Dated, this the 17th day of July, 2008 JUDGMENT H.L.Dattu,C.J. This Income Tax Appeal is directed against the orders passed by the Income Tax Appellate Tribunal, Cochin Bench, Cochin in I.T.A.No.477 of 2006, for the assessment year 2003-04, dated 9th October, 2006. The Tribunal has rejected the Revenue's appeal only on the ground that the tax effect in the appeal filed by the assessee is less than Rupees Two Lakhs. 2. In the memorandum of appeal filed, the Revenue has asserted, that, in view of the Board's Circular dated 24.10.2005, even though the monetary limit of tax effect does not exceed more than Rupees Two Lakhs, since it involves a substantial question of law of importance, which is urged in the appeal and which may arise in future cases, the Tribunal should consider the appeal and decide the same on merits without being hindered by the monetary limits. 3. The Tribunal, without considering the aforesaid aspect of the matter, has rejected the appeal, is the grievance of the Revenue and its learned counsel. Reliance is placed on Board's Circular dated 20.10.2005. 4. The Board's intimation/circular dated 24.10.2005 is as under: “Sub:- Revision of monetary limits for filing appeals I.T.Appeal No.18 of 2008 - 2 - by Department before various appellate bodies or appellate authorities - clarification therefore - regarding. ---- Reference is invited to Board's instruction No.1979 dated 27.3.2000 [F.No.279/126/98-IT] dt.27.3.2000] and Instruction No.1985 dated 29.6.2000 [F.No.279/126/98-IT] dated 29.6.2000] wherein monetary limits for filing appeals/references before various appellate authorities have been prescribed. 2. In partial modification of the above Instruction, it has now been decided by the Board that appeals will henceforth be filed only in cases where the tax effect exceeds the revised monetary limits given hereunder:- Sl.No. INCOME-TAX TAX EFFECT (i) Appeal before Appellate Tribunal Rs.2,00,000/- (ii) Appeal u/s 260A Rs.4,00,000/- (iii) Appeal before the Supreme Court Rs.10,00,000/- 3. The Board has also decided that in cases involving substantial question of law of importance as well as in cases where the same question of law will repeatedly arise; either in the case concerned or in similar cases, should be separately considered on merits without being hindered by the monetary limits. xx xx xx”. 5. Para 3 of the said Circular would make it clear that in a case involving a substantial question of law, the Tribunal, without being hindered I.T.Appeal No.18 of 2008 - 3 - by the monetary limit, is expected to decide the question of law raised. 6. In the instant case, the Tribunal, without adverting to the aforesaid aspect of the matter and merely on the ground that the tax effect would not exceed more than Rupees Two Lakhs, has rejected the appeal. In our view, in view of what has been said by the Board in its Circular dated 24th October, 2005, it is difficult for us to sustain the orders passed by the Tribunal. 7. Therefore, we pass the following: Order (i) The order passed by the Tribunal is set aside. (ii) The matter is remanded back to the Tribunal to consider the Revenue's appeal in accordance with law, keeping in view the Circular issued by the Board dated 24th October, 2005. (iii) All the contentions of the parties are left open. Ordered accordingly. H.L.Dattu Chief Justice A.K.Basheer Judge vku/-