IN THE HIGH COURT OF JUDICATURE AT PATNA MA No.497 of 2006 Commissioner Of Income Tax (Central), Patna, Assistant Commissioner of Income Tax, Central Circle-1, Patna. . ……Appellants Versus Sri Sandeep Malik, 1/158, Gali Bagichi Wali, Punja Sharif, Kashmere Gate, Delhi-110006. Respondent ============================================ APPEARANCE For the Appellant : Mr. Rishi Raj Sinha, Advocate ============================================= CORAM: HONOURABLE THE CHIEF JUSTICE And HONOURABLE MR. JUSTICE JYOTI SARAN ORAL ORDER (Per: HONOURABLE THE CHIEF JUSTICE) 3 3/2/2011 Feeling aggrieved by the common judgment and order dated 26th July 2006 passed by the Income-tax Appellate Tribunal, Patna Bench, in ITA Nos.270, 271 & 272/Pat/2005, the Commissioner of Income-tax and another have preferred the present Appeal under Section 260A of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’) on the following substantial questions of law: 1) Whether on the facts circumstances of case the Income Tax Appellate Tribunal was correct in dismissing the revenue appeal on the sole ground of CBDT instruction no.2/2005 dated 24.10.2005 which is not applicable to the fact of the appellant case. 2) Whether the board has excluded from its purview vide Circular no.2/2005 dated 24.10.2005. Substantial question of law as well as cases where the same question of law repeatedly arises and appellant’s cases is not covered by CBDT circular 23.3.2000. The appeal should have been decided on merits. 2 3) Whether the tribunal has failed to appreciate that the view vindicated by it citing different High Court decision is still to be decided finally by the Apex Court on the point and in this view also the question involved is a substantial question of law to be decided by the High Court. The matter at dispute relates to the assessment years 1993-94, 1994-95 & 1998-99 in respect of one Sandeep Malik, the respondent herein. The Assistant Commissioner of Income-tax, Central Circle, Patna re-opened the assessment of the assessee Sandeep Malik after issuing a notice under section 148 of the Act. The assessing officer, after receiving opinion from the valuation officer, was of the opinion that the assessee had purchased a property at 26, Engineers Enclave at New Delhi. The cost of construction of the said property was understated in the return. The assessing officer by his order dated 1st January 2003 assessed the income of Rs.1,18,830/- from undisclosed sources; charged tax on such income and directed proceeding to be initiated for concealing the income and furnishing inaccurate particulars of the income. The said order was set aside by the Commissioner of Income-tax on 2nd February 2005 in Appeal No.580/A-I/02-03. The Commissioner of Income-tax was of the opinion that on the date the assessing officer reopened the matter, no proceeding was pending. He, therefore, could not have obtained a report of the valuation officer which was the basis for re-assessment. Feeling aggrieved, the appellants preferred the Appeal before the Income Tax Appellate Tribunal, Patna Bench. 3 The Tribunal was of the opinion that the tax effect of each assessment year was less than Rs.2,00,000/-. In view of circular no.2 of 2005 issued by the Central Board of Direct Taxes, the appeals were not maintainable. The appeals were accordingly dismissed on 26th July 2006. Therefore, the present Appeal. Learned advocate Mr. Rishi Raj Sinha has appeared for the appellants. He has submitted that at the relevant time section 268A of the Act was not yet enacted. The circular in question was, therefore, not binding upon the Tribunal. The Tribunal, therefore, ought to have decided the appeals on merits. We are unable to agree with Mr. Sinha. We do not need elaborate discussion to hold that the instructions issued by the Central Board of Direct Taxes are binding to the income-tax authorities. In view of than prevalent instruction no.1979 dated 27th March 2000, having regard to the tax effect involved, the Deputy Commissioner of Income-tax ought not to have preferred the appeal before the Tribunal. In our opinion, the Tribunal was justified in refusing to entertain the appeal filed contrary to the instructions issued by the Central Board of Direct Taxes. For the aforesaid reasons, the Appeal is dismissed. There shall be no order as to cost. Neyaz/ ( R. M. Doshit,CJ.) (Jyoti Saran, J.)