The main legal point established in the judgment is that the CBDT circular dated 23. 2000 restricts the right of appeal conferred under Section 254 of the Income Tax Act based on the tax effect, and it is binding on the Revenue.

K. Raviraja Pandian, J.

The Revenue seeks the admission of the Tax Case for the assessment years 1997-98 and 1998-99 on the following substantial questions of law:-

(i) Whether the Tribunal was right in dismissing the appeal preferred by the Revenue without going into the merits of the case on the ground that the disputed tax exceeds the monetary limit prescribed in the CBDT circular dated 23. 2000?

(ii) Whether the right of appeal conferred under Section 254 of the Income Tax Act could be restricted or whittled down by the Central Board of Direct Taxes ?

(iii) While the Tribunal took into consideration of the circular issued by the CBDT whether it is empowered to neglect exemptions contained in the same and the subsequent clarifying circular issued by the CBDT ?

(iv) Whether the Tribunal was right in holding that the circular of CBDT restricts the right of appeal conferred under Section 254 of the Income Tax Act, even in spite of the judgment of the jurisdictional High Court reported in 261 ITR 406 ?

v) Whether the Tribunal is right in not considering the issue as one involving the substantial question of law and ought not to have dismissed the appeal without going into the merits of the case? and

vi) Whether or not on the admitted facts of the case that the income of the assessee an income from the property in view of the judgment of the jurisdictional High Court reported in 214 ITR 424?

2. The assessee company owned a commercial complex and received rent of Rs.14.61 lakhs for the period 1996-97 relating to the assessment year 1998-1999. In the Income tax assessment completed under Section 143(3)/147, it has been held that the income from letting of commercial complex is assessable as income from house property in terms of Sections 22 to 24 of the Income Tax Act as against business income as claimed. Therefore, the value of commercial complex as reduced by debts owned by the assessee as on the valuation date is assessed to wealth tax. As there was reason to believe that net wealth chargeable to tax has escaped assessment, proceedings were initiated under Section 17 of the Wealth Tax Act. In response to the notice under Sections 17 and 16(4) served, the assessee filed a return on 26. 2000 admitting "nil" value of the net wealth.

3. In the note appended to the statement of wealth, the assessee stated as under:-

i) The building owned by the assessee has constructed on leasehold land. Hence, the value of the building or superstructure alone is included.

ii) Since the building is a business asset. WDV of the building has been admitted as per Rule 14 of Schedule III to Wealth Tax Act.

iii) Investment representing shares in companies and current assets are not assets within the meaning of Section 2(ca) of the Wealth Tax Act.

4. In response to notice under Section 16(2) served, the assessees representative appeared and after hearing the case, the net wealth of the assessee has been computed at Rs.17,19,535/-.

5. In respect of Income Tax assessment for the Assessment Year 1992-93, the assessee has filed the returns of income which were processed under Section 143(1). During the previous year relevant to assessment year 1992-93, the assessee company completed construction of commercial complex building at a cost of Rs.40,65,287/-and claimed depreciation.

6. The Revenue is of the view that as the assessees income is from letting out commercial complex, the same is assessable as income from house property. The For escapement of income, proceedings were initiated under Section 147 and notice under Section 148 was issued with the prior approval of the JCIT, Salem Range, Salem.

7. The assessee objected to the proposal for assessment of income under the head "house property" since the proposed action was as a result of objection from audit party relying on the decision of this Court in the case reported in 215 ITR 424 and the decision relied on by the Audit Party was entirely on different facts the proposed reassessment was