Income Tax Appellate Tribunal - KolkataBiswanath Industries Ltd., Kolkata vs Department Of Income Tax on 25 January, 2011आयकर अपीलीय अधीकरण, Ûयायपीठ - "ए ", कोलकाता,
      IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH "A", KOLKATA

        (सम¢)Before ौी महावीर िसंह, Ûयायीक सदःय,                 एवं/and
                      Shri Mahavir Singh, Judicial
                      Member.
                      ौी सी.
                          सी.डȣ.
                             डȣ.राव, लेखा सदःय
                     Shri C.D.Rao, Accountant Member
      आयकर अपील संÉया /
      ITA No.590/Kol/2011
       िनधॉरण वषॅ/Assessment Year : 2004-05

                                                    -वनाम-
                  (अपीलाथȸ/APPELLANT )                 -       (ू×यथȸ/RESPONDENT)
               D.C.I.T., Circle-5, Kolkata          Versus- M/s. Biswanath
                                                       .    Industries Ltd., Kolkata
                                                             (PAN: AACCB 1425 H)

      अपीलाथȸ कȧ ओर से/ For the Appellant:                  Shri A.K.Pramanik
        ू×यथȸ कȧ ओर से/For the Respondent:                  Shri R.Salarpuria


                                   आदे श/ORDER
 (सी.
  सी.डȣ.
     डȣ.राव)
        राव), लेखा सदःय
 Per Shri C.D.Rao, AMThe above appeal is filed by the Revenue against the order dated 25.01.2011
of the CIT(A)-VI, Kolkata pertaining to A.Yr. 2004-05.2.    In this appeal the Revenue has taken the following grounds of appeal :-"1. That on the facts and circumstances of the case the ld. CIT(A-VI, Kolkata
      has erred in law as well as on facts by deleting the disallowance u/s 14A of
      Rs.4,18,637/- and computing disallowance u/s 14A at Rs.3,91,415/-, @1% of
      exempt income i.e. Rs.3,91,41,597/- without any basis and logic, which is more
      so as in the case ofCIT vs Hero Cycles, November4, 2009 (P&H) it was held
      that even if the funds are merged in a common kitty, the disallowance u/s 14A
      is justified and in the case of Godrej & Boyce Manufacturing Co. Ltd. certain
      principles have been laid down to compute disallowance u/s 14A.2. That the appellant craves for leave to add, delete or modify any of the
      grounds of appeal before or at the time of hearing."23.     At the outset, at the time of hearing before us, the ld. Counsel appearing on
behalf of the assessee submitted that the tax effect in this case is only Rs.1,75,913/-
which is below Rs.2 lakhs.. Therefore, as per the instruction of CBDT Circular the
Revenue is barred from filing of the appeal before this Tribunal.4.     The ld. DR appearing on behalf of the revenue could not contradict the above
submissions of the ld. Counsel of the assessee.5.     After hearing the rival submissions and on careful perusal of the assessment
order, it is observed that the tax effect in this case is below Rs.2 lakhs.
5.1.   Admittedly the tax payable in respect of grounds of appeal by the Department
is less than Rs.2 lakhs and as per revised Instruction of the CBDT No. 279 dated 24th
October, 2005 w.e.f. 31.10.2005 and since in the present case, the above revised
instruction of CBDT is well applicable and therefore, in our considered opinion, the
revenue should have refrained from filing second appeal before the Tribunal. It would
be apt to quote the observation of the Delhi High Court in the case of CIT -vs.- ITAT
232 ITR 207 at page 216 as below :-"The Central Board of Direct Taxes instructions are
              binding on the Department. If the case at hand is covered
              by a policylaid down bythe Central Board of Direct Taxesin that caseno fault can be found with the order of the
              Tribunal refusing to state the case and there is no reason
              why the High Court should interfere with such discretion of
              the Tribunal as has been exercised consistently with the
              uniform policylaid down bythe Central Board of Direct
              Taxes which binds all the subordinate authorities of the
              Income Tax Department. The High Court would not
              ordinarily encourage breach of policy decisions and the
              Departmental Instructions which have a public purpose
              behind them. Valuable time of High Courts and highly
              placed Tribunals is not to be wasted on petty matters".5.2.   Further, the Bombay High Court has also held in the case of CIT -vs.- Camco
Colour Ltd. (supra) and in the case of Pithwa Engineering Works reported in 276 ITR
519 Mumbai that the Circular is binding on the revenue and an appeal or reference
contrary to the instruction issued in the circular would not be considered by the Court.
5.3.   We further find that it is a settled law that the Circulars issued by CBDT are
binding on the Revenue.This position was confirmed by the Apex Court in the case3ofCommissioner of Customs vs Indian Oil Corporation Ltd.reported in 267 ITR 272
wherein their Lordships examined the earlier decisions of the Apex Court with regard
to binding nature of the Circular and laid down that when a circular issued by the
Board remains in operation then the Revenue is bound by it and cannot be allowed to
plead that it is not valid or that it is contrary to the terms of the statute. The appeal
under consideration has certainly been filed contrary to the Circular issued by the
CBDT Instruction No.5 of 2008 dated 15.5.2008.5.4.      In view of the above, We hold that the appeal filed by the Department, against
the impugned order of the Ld. CIT(A), is contrary to the policy decision of the
Department and as such the appeal filed by the Department is dismissed in limine.6.        In the result, the appeal filed by the Revenue is dismissed.Order pronounced in the open court on 22.07.2011.Sd/-                                         Sd/-
 महावीर िसंह, Ûयाियक सदःय                          सी.
                                                   सी.डȣ.
                                                      डȣ.राव,
                                                         राव, लेखा सदःय,
                                                                   सदःय
 Mahavir Singh, Judicial Member                    C.D.Rao, Accountant Member.

 (तारȣख)
  तारȣख)Date: 22.07.2011

R.G.(.P.S.)

         आदे श कȧ ूितिलǒप अमेǒषतः-
         Copy of the order forwarded to:1. M/s.Biswanath Industries Ltd., 16, India Exchange Place, Kolkata-700001.2    The DCIT, Circle-5, Kolkata3. The CIT,                              4. The CIT(A)-VI, Kolkata5. DR, Kolkata Benches, Kolkata
         स×याǒपत ूित/True Copy,
                                                      आदे शानुसार/ By order,

                                       Deputy /Asst. Registrar, ITAT, Kolkata Benches4