This is appeal filed by assessee against order of CIT(A), New Delhi dt. 23rd Nov., 2006 for asst. yr. 1997-98 in matter of order passed under s. 143(3) of IT Act, 1961. Revenue is aggrieved for deletion of addition of Rs. 3,75,885 on account of valuation of property. This appeal was filed on 29th Jan., 2007 i.e., after CBDT Instruction No. 2, dt. 24th Oct., 2005 according to which Revenue should not file any appeal where tax effect is less than Rs. 2,00,000. In instant case, undisputedly, tax effect is less than Rs. 2,00,000, Revenue should not have filed appeal. I have gone through grounds of appeal filed by Revenue and found that tax effect in instant appeal is less than Rs. 2 lakhs. In view of CBDT Instruction No. 2, dt. 24th Oct., 2005, Department should not have filed appeal before Tribunal. For this purpose reliance may be placed on decision of Tribunal Delhi Bench in case of Shri Vikram Bhatnagar (ITA No. 60/Del/2002, order dt. 10th March, 2006). Hon ble Bombay High Court in case of CIT vs. Pithwa Engg. Works (2005) 197 CTR (Bom) 655: (2005) 276 ITR 519 (Bom), have observed as under: "One fails to understand how Revenue can contend that so far as new cases are concerned, circular issued by Board is binding on them and in compliance with said instructions, they do not file references if tax effect is less than Rs. 2 lakhs. But same approach is not adopted with respect to old referred cases even if tax effect is less than Rs. 2 lakhs. In our view, there is no logic behind this approach. This Court can very well take judicial notice of fact that by passage of time money value has gone down, cost of litigation expenses has gone up, assessees on file of Departments have increased; consequently, burden on Department also increased to tremendous extent. corridors of superior Courts are choked with huge pendency of cases. In this view of matter, Board has rightly taken decision not to file references if tax effect is less than Rs. 2 lakhs. same policy for old matters needs to be adopted by Department. In our view, Board s Circular dt. 27th March, 2000, is very much applicable even to old references which are still undecided. Department is not justified in proceeding with old references wherein tax impact is minimal. Thus, there is no justification to proceed with decades old references having negligible tax effect." In case of Asstt. CIT vs. Rajoo Engineers Ltd. (2006) 102 TTJ (Rajkot) 733: (2006) 100 ITD 555 (Rajkot) it was observed that: "It is true that High Court decision in CIT vs. Pithwa Engg. Works (2005) 197 CTR (Bom) 655: (2005) 276 ITR 519 (Bom) was not dealing with new limit of circular dt. 24th Oct., 2005. It was with reference to earlier circular where reference was not required to be filed to High Court if tax effect was less than Rs. 2 lakh. contention of Revenue in that case was that Rs. 2 lakh limit was increased by circular dt. 27th March, 2000 and prior to that, limit was only Rs. 50,000 and contention of Revenue was that new limit would not be applicable to old references. High Court rejected said contention of Revenue. In those circumstances, though said High Court decision did not deal with circular dt. 24th Oct., 2005, but it had dealt with earlier circular and limits of that circular were applied even to cases which were prior to old circular. Therefore, ratio of that decision was applicable in instant case as well. CBDT has taken policy decision not to file appeals in such type of cases and circular is binding on Revenue even to appeals filed before 31st Oct., 2005 and Department would not be justified in proceeding with those appeals within monetary limit of tax effect prescribed in circular dt. 24th Oct., 2005." As per my considered view instructions for not filing appeals with regard to quantum of Revenue effect being less than particular amount have not been issued by CBDT in light hearted manner. These are issued after great deal of deliberations and discussion where every aspect of matter, more particularly question of loss of revenue is examined in depth. Every officer is enjoined with duty to advance policies laid down by CBDT and see that these are not defeated. instructions are also aimed at reducing arrears of appeals in Courts and Tribunals. CBDT, in circular dt. 27th March, 2000, had asked all officers of IT Department under their control not to file appeals before Tribunal in cases where tax effect involved in appeal did not exceed Rs. 1 lakh. These instructions in question are binding on all Departmental authorities and they could not be by passed and treated as of no consequence on pretext that these were private only, and authorities are bound to follow, comply with and see that policies laid down by Board achieve their objectives. These instructions had been issued to avoid unnecessary litigation in small cases particularly, it was very difficult for small assessee to come from remote and distant place to defend appeal filed against him in Tribunal. legal fees payable to lawyer, travelling and other incidental expenses involved, were likely to be more than tax effect in appeal and financial loss to such assessee would be more, even if he legally succeeded in appeal. Therefore, circular/instruction definitely aimed at redressing problems of small assessees. assessees are entitled to urge Tribunal to enforce it. It was observed by Hon ble Madras High Court in CWT vs. S. Annamalai (2003) 181 CTR (Mad) 450: (2002) 258 ITR 675 (Mad) that in order to reduce litigation for filing Departmental appeals/references before Tribunal, High Courts and Supreme Court, CBDT by Circular F.No. 279/126/98-ITJ, dt. 27th March, 2000, revised monetary limits. It was held that in case of matters not covered by exceptions like: (i) where Revenue audit objection in case has been accepted by Department, (ii) where Board s order, notification, instruction or circular is subject-matter of adverse order, (iii) where prosecution proceedings are contemplated against assessee, and (iv) where constitutional validity of provisions of Act are under challenge, appeals filed by Department should be dismissed. It was observed by Tribunal Special Bench in case ITO vs. Bir Engg. Works (2005) 93 TTJ (Asr) 257: (2005) 94 ITD 164 (Asr) that with view to reduce pendency of appeals in Tribunal, High Court and Supreme Court and also to redress difficulties of small assessees in meeting cost of litigation, CBDT has been issuing various instructions to revenue officials prescribing monetary limit for filing appeals before above forums. Impugned Instruction No. 1979 dt. 28th March, 2000 was issued in suppression of all earlier instructions stipulating such limit of tax effect. With regard to binding nature of these instructions issued by CBDT, on IT authorities, provisions of s. 119 of IT Act are very much clear. On plain reading of s. 119, it is clear that sub-s. (1) refers to orders, instructions and directions to IT authorities by Board. section itself provides that all such authorities and all other persons employed in execution of this Act shall observe and follow such orders, instructions and directions of Board. Only exceptions provided under proviso are that such instructions cannot interfere with the, discretion of CIT(A) in exercise of appellate functions and also cannot direct any IT authorities to make particular assessment or to dispose of particular case in particular manner. Otherwise, s. 119(1) itself mandates that such instructions shall be binding on IT authorities. Sec. 119(2) refers to specific orders with reference to any class of income or class of cases either by way of relaxation of any of provisions of s. mentioned therein or with reference to class of income or class of cases. These instructions could be in form of guidelines, principles or procedure to be followed by IT authorities in work relating to assessment, collection of revenue or initiation of proceedings for imposition of penalties. Here also Board may, if it is of t h e opinion that it is necessary in public interest to do so, publish and circulate such instructions. Therefore, it is not in all cases that instructions/circulars issued by Board under s. 119(2) are published by Board. Thus, only difference between sub-s. (1) and sub-s. (2) of s. 119 is that while sub-s. (2) is more specific with reference to particular class of income or class of cases. contention of Revenue could not be accepted that instructions issued under sub-s. (1) were more in nature of administrative instructions and, therefore, were not binding on authorities because section itself mandates that such instructions shall be followed by Revenue authorities. Nowhere s. 119 provides any exception to IT authorities not to follow such instructions except in case where such instructions interfere with discretion of CIT(A) or with jurisdiction and power of particular IT authorities in particular case. Admittedly, instructions issued by CBDT prescribing monetary limit for filing appeals before Tribunal, High Court or Supreme Court are not in nature which could interfere with discretion of CIT(A) or interfere with powers and jurisdiction of IT authorities to complete assessment order to dispose of particular matter in particular case in particular manner. Therefore, these instructions are binding on IT authorities. Tribunal, Hyderabad Bench in case of Dy. CWT vs. Nb. Syed Jaffar Ali Khan (2005) 95 TTJ (Hyd) 376: (2005) 1 SOT 691 (Hyd). Following was observations and conclusions of co-ordinate Bench: "It is necessary to bear in mind that expression which lacks clarity requires clarification but, in present case, policy decision taken by CBDT vide Instruction No. 1979 being very specific and explicit, it may not be proper to give different view on matter in garb of clarification. If CBDT is of view that earlier instructions contained unintended error, it could have been withdrawn and fresh circular/instruction would have been issued, which is within powers of CBDT under s. 119 of Act. However, in our considered opinion, CBDT is not justified in interpreting earlier circular, issued under s. 119 of Act. As stated earlier, Instruction No. 1979 leaves no room for doubt as to what should be monetary limit to be taken into consideration while filing appeal by Revenue. From para 2 of aforementioned instruction, it could be seen that following three points were stated explicitly i.e., (a) new monetary limit would apply with reference to each case taken singly. (b) In group cases, each case should individually satisfy that new monetary limits. (c) working out of monetary limits will, therefore, not take into consideration cumulative revenue effect." Such being policy decision taken by Revenue, with view to reduce litigation and also cost involved therein, it is duty of Revenue authorities to scrupulously follow policy decision taken by CBDT and in cases where tax effect in each case is less than Rs. 1 lakh, Departmental authorities should not prefer appeals before Tribunal. Tribunal Hyderabad Benches had consistently taken this view, which is in consonance with view taken by Hon ble Bombay High Court in case of CIT vs. Camco Colour Co. (2002) 173 CTR (Bom) 255: (2002) 254 ITR 565 (Bom) and judgment of Hon ble Madras High Court in case of S. Annamalai (supra). No doubt Circulars issued by CBDT are not binding on Courts and Tribunals but it is duty of Court to see to it that instructions, which are binding upon Revenue authorities, being issued in exercise of their powers under s. 119 of Act, are followed by them. In this connection, it would be relevant to extract observations of Hon ble Supreme Court in case of Union of India vs. Azadi Bachao Andolan (2003) 184 CTR (SC) 450: (2003) 263 ITR 706 (SC). "If, in teeth of this clarification, AO chose to ignore guidelines and spent their time, talent and energy on inconsequential matters, we think that CBDT was justified in issuing appropriate directions vide Circular No. 789 [see (2000) 160 CTR (St) 5: (2000) 243 ITR (St) 57], under its powers under s. 119, to set things on course by eliminating avoidable wastage of time, talent and energy of AO discharging onerous public duty of collection of revenue." I am well aware of judicial precedent that order passed by co- ordinate Bench should not be lightly disregard. In taking this view, we are supported by decision of Hon ble Supreme Court in case of Union of India vs. Paras Laminates (P) Ltd. (1990) 87 CTR (SC) 180: (1990) 186 ITR 722 (SC) wherein Hon ble Supreme Court has observed that it is true that Bench of two Members must not lightly disregard decision of another Bench of same Tribunal on identical question. rational of this rule is need of continuity, certainty and predictability in administration of justice. Persons effected by decision of Tribunal have right to expect that those exercising judicial function s will follow reasons or grounds of judicial decision in earlier cases on identical matters. Recent Hon ble Supreme Court in case of Tanna & Modi vs. CIT (2007) 210 CTR (SC) 273: (2007) 292 ITR 209 (SC), vide its order 17th May, 2007, has observed that executive instructions are binding on authorities under IT Act, 1961. In view of above discussion and keeping in view recent verdict of Hon ble Supreme Court mentioned hereinabove, tax effect in appeals undisputedly less than prescribed limit of Rs. 2 lakhs, I am inclined to dismiss appeal of Revenue. On merit also, we find that CIT(A) has deleted addition after having following observations: "The assessee has filed copies of bills of material purchased and also filed valuation report of registered valuer and AO has not found any defect in these documents. On other hand, AO has estimated cost of construction without any valuation report from DVO but on basis of standard rates supplied by DVO. AO has not compared quality of construction and other relevant fact of assessee s house with standard rates. At same time AO has not provided any opportunity of being heard as provide under s. 142A(3) or as required by natural justice to assessee on basis used by AO for estimating cost of construction. Therefore, in view of these facts, action of AO cannot, be sustained, hence addition made by AO of Rs. 3,75,885 is deleted and ground of appeal of assessee is allowed." We do not find any valid reason for interfering in findings recorded by CIT(A) resulting into deletion of disallowance of Rs. 3,75,885. In result, appeal of Revenue is dismissed. *** ASSISTANT COMMISSIONER OF INCOME TAX v. KAPOOR SINGH