26 February 2016
The circulars issued by the CBDT are binding on the department but not on the assessee and the courts But are the notifications issued by the CBDT binding on the assessee and courts ?
27 February 2016
Various Supreme Court Decisions have held that Departmental Circulars are binding on the officers of the Department, but not on courts and appellate authorities. Circulars are interpretations of the provisions of the Act as per the Department. Whether to take benefit of a circular or not depends on the assessee. Suppose the assessee does want the application of a circular, he can say so. The Departmental order will be as per the Circular and the assessee has go in appeal to CIT (A) / ITAT / High Court / Supreme Court.
The Supreme Court has in the case of SUCHITRA COMPONENTS LTD Vs COMMISSIONER OF CENTRAL EXCISE, GUNTUR, 2007-TIOL-09-SC-CX, held A beneficial circular has to be applied retrospectively while oppressive circular has to be applied prospectively.
Earlier also the Supreme Court has held that a circular beneficial to the assessee has to be applied while an oppressive circular is applicable only at the assessees option.
Notifications on the other hand are like Rules and would be applicable to all. The Courts however will apply it only if it was issued within the powers of the Board and is not ultra vires the Constitution of India.
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