(Judgment of the Court was delivered by K.RAVIRAJA PANDIAN,J.) The correctness of the order of the Tribunal dated 30.7.2008 made in I.T.A.Nos.385 and 518/Mds/ 2008 relating to the assessment years 2000-01 and 2001-02 is put in issue in this appeal by the revenue by formulating the following question of law:-
"Whether on the facts and circumstances of the case, the Tribunal was right in law in dismissing the appeal filed by the revenue without considering the merits of the case and observing that the tax effect is below monetary limit prescribed for filing the appeal before the Income Tax Appellate Tribunal is valid ?
2. The Statement of facts culled out from the memorandum of grounds are as follows:- The assessee is doing steel fabrication works for M/s.Bharat Heavy Electricals Limited. The raw materials are provided by M/s.Bharat Heavy Electricals. After manufacturing the items, the assessee company is returning the balance raw materials through M/s.Bharat Heavy Electricals Limited. Some time, the assessee is not returning the balance raw materials in good conditions, and M/s.Bharat Heavy Electricals is making recovery from the assessee on those items. The assessee is valuing those raw materials on the basis of recovery made by M/s.Bharat Heavy Electricals Limited and the assessee is selling those items in the open market and accordingly profit and loss is reflecting in the return. During the course of assessment proceedings, the assessee has furnished her explanation about the valuation of stock. But the assessing officer has not accepted the explanation filed by the assessee. The entire scrap stock value which is not shown either in the opening stock or in the closing stock of the previous year is being added to the total income as unaccounted stock by the assessing officer. Accordingly disallownace of scrap recovery of Rs.2,15,000/- and 86,990/- were added for the assessment years 2000-01 and 2001-02 respectively. It is ascertained from the records , the Accountant General (Audit) has pointed out that the assessee has not shown the value scrap lying with it and the same was brought to tax. The assessments were reopened and revised accordingly accepting the audit objection raised by the Accountant General (Audit). Aggrieved by that order, the assessee preferred appeals before the Commissioner of Income Tax (Appeals, who deleted the additiond made by the assessing officer by partly allowing the appeals. Aggrieved by the said order, the revenue filed appeals before the Income Tax Appellate Tribunal. The Tribunal without going into the merits of the case dismissed the appeals on the premise that the tax effect in these cases was less than Rs.2/- lakhs fixed for filing appeals before the Income Tax Appellate Tribunal. The correctness of the same is put in issue before this Court.
3. The issue involved in this appeal has been considered by this court in several cases, one of which is in the case of CWT v. S.Annamalai, (2002) 258 ITR 675, wherein it was held that in order to reduce the litigation for filing departmental appeals/references before the Income Tax appellate Tribunal, High Courts and the Supreme Court, the Central Board of Direct Taxes, by Circular F. No.279/126/98-IT, dated March 27,2000, refixed the monetary limits, however, carving out certain exceptions. The exceptions stated are (i) where revenue audit objection in the case has been accepted by the department, (ii) where the Board's order, notification, instruction or circular is the subject matter of an adverse order, (iii) where prosecution proceedings are contemplated against the assessee, and (iv) where the constitutional validity of the provisions of the Act are under challenge.
4. The Revenue had not taken the point before the Tribunal that the issue falls within the exceptions provided in the circular, but simply accepted the order. However, the Revenue projected before this court that the case falls within the exceptions stated in the CBDT circular, which is evident on the face of the order of the Tribunal. Inasmuch as the said point has not been agitated and argued before the Tribunal, it is apparent that the question does not arise for consideration by this court.
5. It is also pertinent to note that the judgment in which one of us is a party, in the case of the Commissioner of Income-Tax Vs. Associated Electrical Agencies (2007) 295 ITR 496, in which, this Court also relied on the Supreme Court decision in CGT Vs. Executors and Trustees of the Estate of late Sh.Ambalal Sarabhai reported in (1988) 170 ITR 144 under the Gift Tax Act, the Madhya Pradesh High Court judgment in CIT Vs. Digvijay Singh reported in (2007) 292 ITR 314, the Bombay High Court judgments in the case of CIT Vs. Zoeb Y.Topiwala (2006) 284 ITR 379 and in the case of CIT Vs. Camco Colour Company reported in (2002) 254 ITR 565 and held that the long line of judicial opinion is that if the tax effect is less than the one stated in the circular, the revenue need not agitate the issue on appeal and the circular is binding on them.
6. In view of the consistent view taken by this Court, the appeals are dismissed as the issue does not involve any question of law much less substantial question of law so as to entertain these appeals. Consequently, the connected M.P is closed. No costs.
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1.The Assistant Registrar Income-tax Appellate Tribunal Rajaji Bhavan, Besant Nagar, Che18 of 1998ai-90. (Five copies with records)
2. The Secretary, Central Board of Direct Taxes, New Delhi. (Three copies)
3. The Income Tax Officer Ward -I(4) Vellore