Tuesday, April 29, 2014

Larger bench gives prospective effect to CBDT’s Instructions on revised monetary limits for filing of an appeal

IT: Revised monetary limits for filing of an appeal as specified by CBDT through an Instruction of 2011 would not apply to all pending appeals.
The following question of law has been referred to the larger bench of Court:

Whether the view taken by the High Court [in case of CIT v. Sureshchandra Durgaprasad Khatod(HUF)[2013] 31 taxmann.com 74 (Gujarat)] that the instructions of 2011 of the Board providing for revised monetary limits for filing the appeals, would apply to all pending cases, irrespective of the date of filing of such appeals was correct?

The High Court held as under:
1)  The clause 11 of the Instructions of 2011 specifically states that “this instruction will apply to appeals filed on or after 9thFebruary 2011. However, the cases where appeals have been filed before 9th of February, 2011 will be governed by the instructions on this subject, operative at the time when such appeal was filed”.
2)  There was no ambiguity in the instructions of 2011as regards its applicability, and it had been made clear that if those appeals were not filed after the dates mentioned in those instructions, the fate of the appeals would be governed in accordance with the instructions prevailing on the date of presentation of such appeals.
3)  In view of such clear legislative intention, it could not be held that even if an appeal was filed prior to February 9, 2011 the same would be barred notwithstanding the fact that at the time of filing such appeal, the same was not barred by the then instructions of the CBDT. The view taken in case of DurgaprasadKathod [HUF](supra) could not be accepted because in that decision, the well-settled principle relating to literal construction was not followed.
4)  In the absence of any ambiguity, there was no scope of interpreting the said provision in a different way by ignoring the literal meaning of the words used in the said delegated statutory provisions.
5)  From the language of the enabling provisions of the statute, it was clear that no power had been conferred on the CBDT to make the pending appeals or references filed in accordance with the then existing law infructuous by issuing any such direction or instruction with retrospective effect.
6)  The CBDT being fully conscious of its limitation had given clear prospective effect to those instructions in paragraph 11 of the instructions. Thus, the conclusion arrived at by the High Court was in conflict with the existing law of the land.- CIT v. Shambhubhai Mahadev Ahir [2014] 44 taxmann.com 344 (Gujarat)