JUDGMENT judgment of court was delivered by Tarun Agarwala J.-The present appeal relates to assessment year 1993-94. Since tax effect was more than Rs. 2 lakhs, appeal was presented on December 24, 2004, on basis of Instruction No. 1979, dated March 27, 2000. When appeal was taken up for hearing, preliminary objection was raised by learned counsel for respondentassessee on issue of maintainability of instant appeal. Reliance was placed on section 268A of Income-tax Act, 1961 (hereinafter referred to as "the Act"), as well as Instruction No. 3 of 2011, dated February 9, 2011, by Central Board of Direct Taxes (hereinafter referred to as "the CBDT") laying down monetary limits for regulating filing of appeals. learned counsel for assessee contended that under Instruction No. 3 of 2011, monetary limit for filing appeal by Department was Rs. 10 lakhs, whereas tax effect in instant appeal is less than Rs. 10 lakhs and, therefore, appeal should be dismissed as not maintainable. Since preliminary objection raised had far reaching consequence affecting pending appeals in High Court, court invited other counsels to address court on this issue. In this manner, we have heard Sri Bharat Ji Agarwal, learned senior counsel along with Sri Shambhu Chopra and Sri Govind Krishna, learned counsels for Department and Sri R. P. Agarwal, Sri Piyush Agarwal, Sri Ashish Bansal and Sri Suyash Agarwal, learned counsels for assessee. learned senior counsel for Income-tax Department (hereinafter referred to as Department) vehemently repudiated preliminary objection raised by learned counsel for assessee. learned senior counsel for Department contended that instructions issued by Central Board of Direct Taxes only lays down monetary limits for regulating filing of appeals and not to regulate appeals already filed. It was urged that appeals already filed as per earlier instructions will have to be decided on merits irrespective of fact that tax effect was less than prescribed limit as per latest instructions. learned senior counsel urged that right to file appeal is substantive right under section 260A of Act which cannot be taken away by section 268A or by instructions issued by Central Board of Direct Taxes under section 119 of Act. It was contended that instructions are at best guidelines and are not mandatory upon Department. In support of his submission, reliance was placed on following decisions, namely, Hoosein Kasam Dada (India) Ltd. v. State of Madhya Pradesh [1953] 4 STC 114 (SC); AIR 1953 SC 221, Garikapati Veeraya v. N. Subbiah Choudhry, AIR 1957 SC 540 and Ramesh Singh v. Cinta Devi [1996] 3 SCC 142. It was urged that paragraph 11 of Instruction clearly indicate that instruction is prospective in nature. learned senior counsel contended that paragraph 11 of Instruction makes it clear that instruction is not applicable to pending appeals and that language employed in Instruction is clear and unambiguous and, therefore, literal rule of interpretation would apply and it is not for court to interpret same in different way. On other hand, counsels in support of assessee, in addition to submission on monetary limit, contended that Instructions has been issued pursuant to National Litigation Policy, which also provided for review of pending cases so as to reduce Government litigation in courts so that valuable court time was spent in resolving other serious issues. underlying idea under policy was to filter out frivolous appeals where stakes were not so high and was less than amount fixed by revisional authorities. It was also contended that Instruction was beneficial piece of legislation and would be applicable retrospectively. It was also urged that right of appeal under section 260A of Act is now regulated by section 268A of Act. In support of their submissions, learned counsels for parties have placed reliance on various decisions which would be referred hereinafter. In light of submissions made by learned counsels, reference in first instance must be made to National Litigation Policy. In 2009, Central Government formulated National Litigation Policy to reduce cases pending in various courts of India in attempt to reduce average pendency time from 15 years to 3 years. National Litigation Policy reads as under: "National Litigation Policy In this background, it is necessary to notice the'National Litigation Policy Document Released'. Centre has formulated National Litigation Policy to reduce cases pending in various courts in India under National Legal Mission to reduce average pendency time from 15 years to 3 years. It reads as under: 'Introduction Whereas at National consultation for strengthening judiciary toward reducing pendency and delays held on October 24/25, 2009, Union Minister of Law and Justice, presented resolutions which were adopted by entire conference unanimously. And wherein said resolution acknowledged initiative undertaken by Government of India to frame National Litigation Policy with view to ensure conduct of responsible litigation by Central Government and urges every State Government to evolve similar policies. National Litigation Policy is as follows: Vision/Mission 1. National Litigation Policy is based on recognition that Government and its various agencies are pre-dominant litigants in courts and Tribunals in country. Its aim is to transform Government into efficient and responsible litigant. This policy is also based on recognition that it is responsibility of Government to protect rights of citizens, to respect fundamental rights and those in charge of conduct of Government litigation should never forget this basic principle. "Efficient litigant" means Focusing on core issues involved in litigation and addressing them squarely. Managing and conducting litigation in cohesive, co-ordinated and time-bound manner. Ensuring that good cases are won and bad cases are not needlessly persevered with. litigant who is represented by competent and sensitive legal persons: competent in their skills and sensitive to facts that Government is not, ordinary litigant and that litigation does not have to be won at any cost. "Responsible litigant" means That litigation will not be resorted to for sake of litigating. That false pleas and technical points will not be taken and shall be discouraged. Ensuring that correct facts and all relevant documents will be placed before court. That nothing will be suppressed from court and there will be no attempt to mislead any court or Tribunal. 2. Government must cease to be compulsive litigant. philosophy that matters should be left to courts for ultimate decision has to be discarded. easy approach, "Let court decide" must be eschewed and condemned. 3. purpose underlying this policy is also to reduce Government litigation in courts so that valuable court time would be spent in resolving other pending cases so as to achieve goal in National Legal Mission to reduce average pendency time from 15 years to 3 years. Litigators on behalf of Government have to keep in mind principles incorporated in National mission for judicial reforms which includes identifying bottlenecks which Government and its agencies may be concerned with and also removing unnecessary Government cases. Prioritisation in litigation has to be achieved with particular emphasis on welfare legislation, social reform, weaker sections and senior citizens and other categories requiring assistance must be given utmost priority.' In respect of filing of appeals in revenue matter it is stated as under: '(G) Appeals in revenue matters will not be filed: (a) if stakes are not high and are less than that amount to be fixed by Revenue authorities; (b) if matter is covered by series of judgments of Tribunal or of High Court which have held field and which have not been challenged in Supreme Court; (c) where assessee has acted in accordance with long standing industry practice; (d) merely because of change of opinion on part of jurisdictional officers.' Review of pending cases (A) All pending cases involving Government will be reviewed. This due diligence process shall involve drawing upon statistics of all pending matters which shall be provided for by all Government Departments (including public sector undertakings). Office of Attorney General and Solicitor General shall also be responsible for reviewing all pending cases and filtering frivolous and vexatious matters from meritorious ones. (B) Cases will be grouped and categorised. practice of grouping should be introduced whereby cases should be assigned particular number of identity according to subject and statute involved. In fact, further sub- grouping will also be attempted. To facilitate this process, standard forms must be devised which lawyers have to fill up at time of filing of cases. Panels will be set up to implement categorisation, review such cases to identify cases which can be withdrawn. These include cases which are covered by decisions of courts and cases which are found without merit withdrawn. This must be done in time bound fashion." This policy was formulated with purpose that Central Government would be responsible litigant and would not be involved in frivolous litigation, especially where stakes were not high. policy aimed to transform Government into efficient and responsible litigant and urged every State Government to evolve similar policies. policy defined efficient litigant to mean that litigation should not be resorted to for sake of litigating and that Government ceases to compulsive litigant. underlying purpose of policy was to reduce Government litigation in courts so that valuable court time was spent in resolving other pending issues to enable average pendency of case in court reduced from 15 years to 3 years. policy, therefore, provided that Government would identify bottlenecks and that appeals would not be filed where stakes are not so high and was less than by amount fixed by Revenue authorities. policy also formulated that all pending cases involving Government would be reviewed to filter frivolous and vexatious matters from meritorious one. Such cases so identified would be withdrawn, which would also include cases, which are covered by previous decisions of courts. Such withdrawal of cases would be done in time bound fashion. In this background, Instruction No. 3 of 2011 was issued by Central Board of Direct Taxes (CBDT) dated February 9, 2011, reported in 332 ITR (St.) 1. For facility, said Instruction No. 3 of 2011 is extracted hereunder : "C. B. D. T. Instructions Instruction No. 3 of 2011, dated 9th February 2011. To All Chief Commissioners of Income-tax and All Directors General of Income-tax. Subject: Revision of monetary limits for filing of appeals by Department before Income-tax Appellate Tribunal, High Courts and Supreme Court-Measures for reducing litigation-Regarding. Reference is invited to Board's instruction No. 5 of 2008, dated May 15, 2008, wherein monetary limits and other conditions for filing Departmental appeals (in Income-tax matters) before Appellate Tribunal, High Courts and Supreme Court were specified. 2. In supersession of above instruction, it has been decided by Board that Departmental appeals may be filed on merits before Appellate Tribunal, High Courts and Supreme Court keeping in view monetary limits and conditions specified below. 3. Henceforth appeals shall not be filed in cases where tax effect does not exceed monetary limits given hereunder: Sl. Monetary limit Appeals in income-tax matters No. (in Rs.) 1 Appeal before Appellate Tribunal 3,00,000 Appeal under section 260A before 2 10,00,000 High Court 3 Appeal before Supreme Court 25,00,000 It is clarified that appeal should not be filed merely because tax effect in case exceeds monetary limits prescribed above. Filing of appeal in such cases is to be decided on merits of case. 4. For this purpose,'tax effect' means difference between tax on total income assessed and tax that would have been chargeable had such total income been reduced by amount of income in respect of issue against which appeal is intended to be filed (hereinafter referred to as'disputed issues'). However, tax will not include any interest thereon, except where chargeability of interest itself is in dispute. In case chargeability of interest is issue under dispute, amount of interest shall be tax effect. In cases where returned loss is reduced or assessed as income, tax effect would include notional tax on disputed additions. In case of penalty orders, tax effect will mean quantum of penalty deleted or reduced in order to be appealed against. 5. Assessing Officer shall calculate tax effect separately for every assessment year in respect of disputed issues in case of every assessee. If, in case of assessee, disputed issues arise in more than one assessment year, appeal, can be filed in respect of such assessment year or years in which tax effect, in respect of disputed issues exceeds monetary limited specified in paragraph 3. No appeal shall be filed in respect of assessment year or years in which tax effect is less than monetary limit specified in paragraph 3. In other words, henceforth, appeals can be filed only with reference to tax effect in relevant assessment year. However, in case of composite order of any High Court or appellate authority, which involves more than one assessment year and common issues in more than one assessment year, appeal shall be filed in respect of all assessment years even if the'tax effect' is less than prescribed monetary limits in any of year(s), if it is decided to file appeal in respect of year(s) in which'tax effect' exceeds monetary limit prescribed. In case where composite order/judgment involves more than one assessee, each assessee shall be dealt with separately. 6. In case where appeal before Tribunal or court is not filed only on account of tax effect being less than monetary limit specified above, Commissioner of Income-tax shall specifically record that "even though decision is not acceptable, appeal is not being filed only on consideration that tax effect is less than monetary limit specified in this instruction". Further, in such cases, there will be no presumption that Income-tax Department has acquiesced in decision on disputed issues. Income- tax Department shall not be precluded from filing appeal against disputed issues in case of same assessee for any other assessment year, or in case of any other assessee for same or any other assessment year, if tax effect exceeds specified monetary limits. 7. In past, number of instances have come to notice of Board, whereby assessee has claimed relief from Tribunal or court only on ground that Department has implicitly accepted decision of Tribunal or court in case of assessee for any other assessment year or in case of any other assessee for same or any other assessment year, by not filing appeal on same disputed issues. Departmental representatives/counsels must make every effort to bring to notice of Tribunal or court that appeal in such cases was not filed or not admitted only for reason of tax effect being less than specified monetary limit and therefore, no inference should be drawn that decision rendered therein were acceptable to Department. Accordingly, they should impress upon Tribunal or court that such cases do not have any precedent value. As evidence of not filing appeal due to this instruction may have to be produced in courts, judicial folders in office of Commissioners of Income-tax must be maintained in systemic manner for easy retrieval. 8. Adverse judgments relating to following issues should be contested on merits notwithstanding that tax effect entailed is less than monetary limits specified in paragraph 3 above or there is no tax effect, (a) Where Constitutional validity of provisions of Act or Rules are under challenge, or (b) Where Board's order, notification, instruction or circular has been held to be illegal or ultra vires, or (c) Where Revenue audit objection in case has been accepted by Department. 9. proposal for filing special leave petition under article 136 of Constitution before Supreme Court should, in all cases, be sent to Directorate of Income-tax (Legal and Research) New Delhi and decision to file special leave petition shall be in consultation with Ministry of Law and Justice. 10. monetary limits specified in paragraph 3 above shall not apply to writ matters and direct tax matters other than Income-tax. Filing of appeals in other direct tax matters shall continue to be governed by relevant provisions of statute and rules. Further, filing of appeal in cases of income-tax, where tax effect is not quantifiable or not involved, such as case of registration of trusts or institutions under section 12A of Income-tax Act, 1961, shall not be governed by limits specified in paragraph 3 above and decision to file appeal in such cases may be taken on merits of particular case. 11. This instruction will apply to appeals filed on or after February 9, 2011. However, cases where appeals have been filed before February 9, 2011, will be governed by instructions on this subject, operative at time when such appeal was filed. 12 This issues under section 268A(1) of Income-tax Act, 1961. Yours faithfully, (Sd.)...... A. K. Bharadwaj, Under Secretary to Government of India (ITJ-II), CBDT" Prior to aforesaid instructions, Central Board of Direct Taxes had issued Instruction No. 1777, dated November 4, 1987, fixing monetary limit by which appeal would not be filed before High Court where tax effect was less than Rs. 50,000. This was enhanced to Rs. 2 lakhs by Instruction No. 1979, dated March 27, 2000. By Instruction No. 2 of 2005 dated October 24, 2005, limit was enhanced to Rs. 4 lakhs. Similar instructions were again issued by Instruction No. 5 of 2008, dated May 15, 2008. By Instruction No. 3 of 2011, limit was enhanced to Rs. 10 lakhs and reiterated by Instruction No. 5 of 2014, dated July 10, 2014, wherein limit for filing appeal before High Court remained same. Paragraph 3 of Instruction No. 3 of 2011 indicates that appeal would only be filed where tax effect exceeds monetary limits, namely, Rs. 10 lakhs before High Court. Paragraph 11 of instructions indicate that Instruction No. 3 of 2011 would apply to appeals filed on or after February 9, 2011 and where appeals having been filed before February 9, 2011, said appeals would be governed by instructions, which were operative at time when such appeal was filed. present appeal was filed in 2004. At that time Instruction No. 1979, dated March 27, 2000, was applicable. said instruction is extracted hereunder: "Board's Instruction No. 1979- "F. No.279/126/98- ITJ, dated March 27, 2000. Subject: Revising monetary limits for filing Departmental appeals/ references before Income-tax Appellate Tribunal, High Courts and Supreme Court-Measures for reducing litigation-Regarding. Reference is invited to Board's Instruction No.1903, dated October 28, 1992, and Instruction No. 1777, dated November 4, 1987, wherein monetary limits of Rs. 25,000 for Departmental appeals (in income-tax matters) before Appellate Tribunal, Rs. 50,000 for filing reference to High Court and Rs. 1,50,000 for filing appeal to Supreme Court were laid down. 2. In supersession of above instruction, it has now been decided by Board that appeals will be filed only in cases where tax effect exceeds revised monetary limits given hereunder: (Tax Effect) Rs. Appeal before Appellate Tribunal (in (i) 1,00,000 income-tax matters) Appeal under section 260A/reference (ii) 2,00,000 under section 256(2) before High Court (iii) Appeal in Supreme Court 5,00,000 new monetary limits would apply with reference to each case taken singly. In other words, in group cases, each case should individually satisfy new monetary limits. working out of monetary limits will therefore not taken into consideration cumulative revenue effect as envisaged in Board's earlier instruction referred to above. 3. Adverse judgments relating to following should be contested irrespective of revenue effect: (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. (iv) Where constitutional validity of provisions of Act are under challenge. 4. Special leave petitions under article 136 of Constitution are filed before Supreme Court court only in consultation with Ministry of Law. Therefore, where Chief Commissioner decides to contest adverse judgment by filing special leave petition before Supreme Court, they should send proposal to Board for fur ther processing. 5. These instructions will apply to litigation under other direct taxes also, e.g., wealth-tax, gift-tax, estate duty, etc. 6. These monetary limits will apply to writ matters. 7. This instruction will come into effect from April 1, 2000." perusal of aforesaid instructions and earlier instructions of Central Board of Direct Taxes indicate that it was issued to reduce litigation in court. Previously, only instructions were issued by Central Board of Direct Taxes under section 119 of Act and, in order to give it legislative measure, new section 268A was inserted by Finance Act, 2008, with retrospective effect from April 1, 1999, in Income-tax Act, 1961. For ready reference, said provision is extracted hereunder: "268A. Filing of appeal or application for reference by income-tax authority.-(1) Board may, from time to time, issue orders, instructions or directions to other income-tax authorities, fixing such monetary limits as it may deem fit, for purpose of regulating filing of appeal or application for reference by any income-tax authority under provisions of this Chapter. (2) Where, in pursuance of orders, instructions or directions issued under sub-section (1), income-tax authority has not filed any appeal or application for reference on any issue in case of assessee for any assessment year, it shall not preclude such authority from filing appeal or application for reference on same issue in case of- (a) same assessee for any other assessment year; or (b) any other assessee for same or any other assessment year. (3) Notwithstanding that no appeal or application for reference has been filed by income-tax authority pursuant to orders or instructions or directions issued under sub-section (1), it shall not be lawful for assessee, being party in any appeal or reference, to contend that income-tax authority has acquiesced in decision on disputed issue by not filing appeal or application for reference in any case. (4) Appellate Tribunal or court, hearing such appeal or reference, shall have regard to orders, instructions or directions issued under sub-section (1) and circumstances under which such appeal or application for reference was filed or not filed in respect of any case. (5) Every order, instruction or direction which has been issued by Board fixing monetary limits for filing appeal or application for reference shall be deemed to have been issued under sub-section (1) and provisions of sub- sections (2), (3) and (4) shall apply accordingly." Sub-section (4) of section 268A of Act clearly indicates that Tribunal and court shall have regard to all instructions issued under subsection (1) of Act by Central Board of Direct Taxes and circumstances under which such appeal or application for reference was filed or not filed in respect of any case. Sub-section (5) indicates that instructions issued by Central Board of Direct Taxes shall be deemed to have been issued under section 268 of Act. object of introduction of section 268A of Act was to regulate filing of appeals by Government. said object is extracted hereunder (see [2008] 298 ITR (St.) 142, 170): "The proposed section seeks to provide that Board may, from time to time, issue orders, instructions or directions to other incometax authorities, fixing such monetary limits as it may deem fit, for purpose of regulating filing of appeal or application for reference by any income-tax authority under provisions of Chapter XX. It is further proposed to provide that where, in pursuance of orders, instructions or directions issued under sub-section (1), income tax authority has not filed any appeal or application for reference on any issue in case of assessee for any assessment year, it shall not preclude such authority from filing appeal or application for reference on same issue in case of- (a) same assessee for any other assessment year; or (b) any other assessee for same or any other assessment year. It is also proposed to provide that notwithstanding that no appeal or application for reference has been filed by income-tax authority pursuant to orders, instructions or directions issued under subsection (1), it shall not be lawful for assessee, being party in any appeal or reference, to contend that income-tax authority has acquiesced in decision on disputed issue by not filing appeal or application for reference in any case. It is also proposed to provide that Appellate Tribunal or court, hearing any appeal or reference filed under this Chapter, shall have regard to orders, instructions or directions issued by Board from time to time either before or after insertion of this section and circumstances in which such appeal or application for reference was filed or was not filed in any case; and, accordingly, Tribunal or court shall decide appeal or reference on merits of issue under consideration. It is also proposed to provide that every order or instruction or direction which has been issued by Board fixing monetary limits for filing appeal or application for reference shall be deemed to have been issued under sub-section (1) and provisions of sub-sections (2), (3) and (4) shall apply accordingly. This amendment will take effect retrospectively from April 1, 1999." At this stage it would be relevant to make reference to section 260A of Act, which is extracted hereunder: "260A. Appeal to High Court.-(1) appeal shall lie to High Court from every order passed in appeal by Appellate Tribunal before date of establishment of National Tax Tribunal, if High Court is satisfied that case involves substantial question of law. (2) Chief Commissioner or Commissioner or assessee aggrieved by any order passed by Appellate Tribunal may file appeal to High Court and such appeal under this sub-section shall be- (a) filed within one hundred and twenty days from date on which order appealed against is received by assessee or Chief Commissioner or Commissioner;... (c) in form of memorandum of appeal precisely stating therein substantial question of law involved. (2A) High Court may admit appeal after expiry of period of one hundred and twenty days referred to in clause (a) of sub-section (2), if it is satisfied that there was sufficient cause for not filing same within that period. (3) Where High Court is satisfied that substantial question of law is involved in any case, it shall formulate that question. (4) appeal shall be heard only on question so formulated, and respondents shall, at hearing of appeal, be allowed to argue that case does not involve such question: Provided that nothing in this sub-section shall be deemed to take away or abridge power of court to hear, for reasons to be recorded, appeal on any other substantial question of law not formulated by it, if it is satisfied that case involves such question. (5) High Court shall decide question of law so formulated and deliver such judgment thereon containing grounds on which such decision is founded and may award such cost as it deems fit. (6) High Court may determine any issue which- (a) has not been determined by Appellate Tribunal; or (b) has been wrongly determined by Appellate Tribunal, by reason of decision on such question of law as is referred to in subsection (1). (7) Save as otherwise provided in this Act, provisions of Code of Civil Procedure, 1908 (5 of 1908), relating to appeals to High Court shall, as far as may be, apply in case of appeals under this section." Numerous rules of interpretation have been formulated by courts. If statutory provision is open to more than one interpretation, court has to choose that interpretation which represents true intention of Legislature. duty of court is to expound and not to legislate. However, at times, there is marginal area in which court could mould or creatively interpret legislation. court in such situation are called refiners or polishers of legislation. At times there are gaps in legislation and courts are called upon to fill in gaps. Lord Due Parco in Cutler v. Wandsworth Stadium Ltd. [1949] 1 All ER 544 (HL) was of view that in some cases it becomes necessary for courts "to fill in such gaps as Parliament may choose to leave in its enactments". In Guiseppi v. Walling, 144 F.2d 608 pages 620, 622 (CCA 2d 1944) which is quoted in 60 Harvard Review at 372, judge Frank held: "The necessary generality in wordings of many statutes, and ineptness of drafting in others frequently compels courts, as best as they can, to fill in gaps, activity which no matter how one may label it, is in part legislative. Thus, courts in their way, as administrators in their way perform task of supplementing statutes. In case of courts, we call it'interpretation' or'filling in gaps', in case of administrators we call it'delegation' or authority to supply details." aforesaid opinion was approved by Supreme Court in Directorate of Enforcement v. Deepak Mahajan, AIR 1994 SC 1775; [1995] 82 Comp Cas 103 (SC). Normally, courts should be slow to pronounce Legislature and take its plain grammatical meaning of words of enactment as best guide but to winch up legislative intent, it is permissible for courts to take into account purpose and object and real legislative intent, otherwise bare mechanical interpretation of words and application of legislative intent devoid of concept of purpose and object will render Legislature inane. In instant case, question is not what words in relevant provision mean but what national litigation policy meant requiring courts to interfere and fill in gaps which was excluded by Legislature. In our view, it is permissible for courts to look into legislative intention and go behind enactment and take other factors into consideration in order to give effect to legislative intent and to purpose of national litigation policy. process of construction, therefore, combines both literal and purposive approaches, namely, true meaning of words used in enactment in light of any discernible purpose or object which comprehends mischief and its remedy to which enactment is directed. Once this is achieved, it would be called "the cardinal principle of construction". difference between purposive and literal constructions is in truth one of degree only as held in Oliver Ashworth (Holdings) Ltd. v. Ballard (Kent) Ltd. [1999] 2 All ER 791 (CA) at 805 and reiterated in Tanna and Modi v. CIT [2007] 292 ITR 209 (SC); [2007] 7 SCC 434. real distinction lies in balance to be struck in particular case between literal meaning of words on one hand and context and purpose of measure in which they appear on other. In Francis Bennion's Statutory Interpretation, purposive construction has been described in following manner: "A purposive construction of enactment is one which gives effect to legislative purpose by- (a) following literal meaning of enactment where that meaning is in accordance with legislative purpose (in this code called purposive and literal construction)." Heydon's case now known as "purposive construction" or "mischief rule" was explained by Supreme Court in Bengal Immunity Co. Ltd. v. State of Bihar, AIR 1955 SC 661 holding: "(22) It is sound rule of construction of statute firmly established in England as far back as 1584 when -'Heydon's case [1584] 3 Co. Rep 7a (V) was decided that- '... for sure and true interpretation of all statutes in general (be they penal or beneficial, restrictive or enlarging of common law) four things are to be discerned and considered: 1st. What was common law before making of Act, 2nd. What was mischief and defect for which common law did not provide, 3rd. What remedy Parliament hath resolved and appointed to cure disease of Commonwealth, and 4th. true reason of remedy; and then office of all judges is always to make such construction as shall suppress mischief, and advance remedy, and to suppress subtle inventions and evasions for continuance of mischief, and'pro privato commodo', and to add force and life to cure and remedy, according to true intent of makers of Act,'pro bono publico'." rule is equally applicable to large extent. In order to properly interpret provisions of instructions, it is, therefore necessary to consider how matter stood immediately before circular came into existence, what was intention and object necessitating Legislature to issue impugned circular and defect which circular did not provide. Consequently, we are of opinion that courts should adopt purposive approach in order to give effect to true purpose of legislation by looking at National Litigation Policy which is relevant material on basis of which circular was issued. In New India Assurance Co. Ltd. v. Nusli Neville Wadia, AIR 2008 SC 876, Supreme Court held: "For proper interpretation not only basic principles of natural justice have to be borne in mind, but also principles of constitutionalism involved therein. With view to read provisions of Act in proper and effective manner, we are of opinion that literal interpretation, if given, may give rise to anomaly or absurdity which must be avoided. So as to enable superior court to interpret statute in reasonable manner, court must place itself in chair of reasonable legislator/author. So done, rules of purposive chair of reasonable legislator/author. So done, rules of purposive construction have to be resorted to which would require construction of Act in such manner so as to see that object of Act fulfilled; which in turn would lead beneficiary under statutory scheme to fulfil its constitutional obligations..." Bombay High Court, being conscious of instructions issued by Central Board of Direct Taxes dismissed large number of appeals on ground that instructions issued by Central Board of Direct Taxes from time to time were not being adhered to and that appeals were being filed in utter disregard to monetary limits. Bombay High Court insisted that all appeals filed by Department where tax effect was below Board's prescribed limit should be withdrawn forthwith. In this regard, Central Board of Direct Taxes issued instruction dated June 5, 2007, directing Department to examine all appeals pending before Bombay High Court on case to case basis with further direction to withdraw cases wherein criteria of monetary limits as per prevailing instruction was not satisfied unless question of law involved or raised in appeal or referred to High Court for opinion was of recurring nature requiring it to be settled by High Court. When hearing of present appeal started, instructions of Central Board of Direct Taxes dated June 5, 2007, was brought to notice of court. court, accordingly, directed Ministry of Finance and/or Central Board of Direct Taxes to take conscious decision as to whether they would like to pursue pending appeals where tax effect was less than Rs. 10 lakhs and that this conscious decision should be taken keeping in mind National Litigation Policy which was framed by Central Government with object of reducing burden of pending appeals before court. For facility, order of court dated July 22, 2014, is extracted hereunder: "We have heard Sri Shambhoo Chopra, Sri Govind Krishna and Sri Dhananjay Awasthi for Income-tax Department and Sri R. P. Agarwal, learned counsel for assessee. Upon insertion of section 268A in Income-tax Act, Instruction No. 3 of 2011, dated February 9, 2011, was issued by Central Board of Direct Taxes increasing monetary limit of filing appeal by Department before Tribunal, High Court and Supreme Court. By this instruction it was indicated that where tax effect is less than Rs. 10 lakhs, no appeal shall be filed by Department before High Court. When present appeal came up for hearing, objection was taken that since tax effect is less than Rs. 10 lakhs, appeal should be dismissed as not maintainable. question whether Instruction No. 3 of 2011, dated February 9, 2011, will have retrospective effect on pending appeals filed before February 9, 2011, has engaged attention of various High Courts giving divergent opinions. Without going into said controversy, we find that there was circular issued on June 5, 2007, directing Income-tax Department to examine all appeals pending before Bombay High Court on case to case basis with further direction to withdraw cases wherein criteria for monetary limit as per prevailing instructions was not satisfied. We are of opinion that Ministry of Finance and/or Central Board of Direct Taxes should take conscious decision as to whether they would like to pursue pending appeals where tax effect is less than Rs. 10 lakhs. This conscious decision must be taken keeping in mind national litigation policy framed by Central Government with object of reducing burden of pending appeals before various courts across country. We, accordingly, adjourn matter for period of two weeks and direct Income-tax Department to take necessary instructions and intimate court on affidavit. List on August 6, 2014." Based on aforesaid direction, Income-tax Officer, Allahabad filed affidavit dated August 14, 2014, indicating that Instruction No. 3 of 2011 was issued in light of National Litigation Policy. Since affidavit was not in consonance with direction of court dated July 22, 2014, further directions was issued directing that affidavit should be filed by Joint Secretary of Ministry of Finance or Central Board of Direct Taxes. Based on aforesaid order, affidavit of Central Board of Direct Taxes dated September 1, 2014, was filed. Central Board of Direct Taxes contended that earlier instruction dated June 5, 2007, was only confined to appeals pending before Bombay High Court and that it was not applicable to other High Courts. Central Board of Direct Taxes in affidavit further contended that instructions issued from time to time were prospective in nature as is clear from paragraph 11 of Instruction No. 3 of 2011 and contended that pending appeals filed prior to issuance of Instruction No. 3 of 2011 have to be decided on merits. Central Board of Direct Taxes further contended that National Litigation Policy has been considered and in order to reduce litigation with taxpayers, monetary limits have been revised. Central Board of Direct Taxes, however, has said nothing in affidavit as to why pending appeals as per National Litigation Policy should not be reviewed and frivolous and vexatious cases should not be withdrawn as has been done before Bombay High Court. It is strange that since Bombay High Court insisted, Central Board of Direct Taxes issued instructions dated June 5, 2007, directing Income-tax Department to examine all appeals pending before Bombay High Court on case to case basis and withdraw cases where criteria for monetary limit as per prevailing instructions was not satisfied but same criteria was not adopted by Central Board of Direct Taxes for this High Court or for other High Courts across country. National Litigation Policy has clearly indicated that pending cases should be reviewed filtering frivolous and vexatious matters from meritorious ones. Various courts have dealt with instructions issued by Central Board of Direct Taxes from time to time. Bombay High Court in CIT v. Pithwa Engineering Works [2005] 276 ITR 519 (Bom) held (page 520): "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 Department have increased; consequently, burden on Department has 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 dated March 27, 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." Bombay High Court held that instructions would apply to pending appeals and, therefore, will have retrospective effect. Similar view was again reiterated by Bombay High Court in CIT v. Camco Colour Co., [2002] 254 ITR 565 (Bom), CIT v. Smt. Vijaya V. Kavekar L/H of Late Vijaykumar B. Kavekar [2013] 350 ITR 237 (Bom), CIT v. Madhukar K. Inamdar (HUF) [2009] 318 ITR 149 (Bom) and CIT v. Vitessee Trading Ltd. [2011] 331 ITR 433 (Bom). Delhi High Court also took same view in CIT v. P. S. Jain and Co. [2011] 335 ITR 591 (Delhi). Madhya Pradesh High Court in CIT v. Ashok Kumar Manibhai Patel and Co., [2009] 317 ITR 386 (MP) followed Bombay High Court and extended benefit to assessee. Karnataka High Court in CIT v. Ranka and Ranka [2013] 352 ITR 121 (Karn) considered Instruction No. 3 of 2011 and held that said instruction would be applicable to pending appeals. Karnataka High Court held (page 140): "In instant case, Instruction No. 3 of 2011 is more beneficial than Instruction No. 2 of 2005. If Instruction No. 3 of 2011 is also made applicable to pending appeals before this court, it would grant relief to assessee. Apart from granting relief to assessee, if number of appeals pending before this court are disposed of on basis of said circular, precious time which would be saved by this court could be better utilised for deciding disputes where tax effect is enormous. That apart, duration, appeal takes in this court would be reduced as desired by National Litigation Policy... It is also not out of place to mention herein that Parliament wanted to grant statutory recognition to these orders/instructions/circulars, issued by Department from time to time retrospectively to take care to protect interests of Revenue by introducing sub-sections (2) and (3) in section 268A of Act. This benefit conferred on these assessees would be only in nature of one-time settlement because if same issue arises for consideration in subsequent years and tax effect is more than Rs. 10 lakhs, it is not open to them to plead that either Department is estopped from claiming such amount or that order passed by this court dismissing appeals on ground that tax effect being within monetary limit would come in way of Department proceeding against assessee. circular also makes it clear that in pending appeals, where constitutional validity of provisions of Act or Rule or under challenge, or where Board's order, notification, instruction or circular has been held to be illegal or ultra vires or whether Revenue audit objection in case has been accepted by Department notwithstanding fact that tax effect is less than monetary limit fixed under aforesaid circular, still it is open to Department to request court to permit them to prosecute such appeals. Thus, Department has to apply its mind in all pending appeals and point out to court, which are those appeals in which they intend to prosecute. Therefore, sufficient safeguards have been made to protect interests of public revenue. By this approach we would be saving time of court, time of Department and public time in general and giving effect to National Litigation Policy, 2011, so that it can be used for better and productive purpose... Yet another anomaly which requires to be noticed is, if Tribunal where number of cases which are pending are more, decides appeal, subsequent to these latest circulars and amount involved is less than Rs. 10 lakhs, assessee in such cases get benefit of latest circular. However, if Tribunal has decided case expeditiously or in Tribunals where pendency is less and if subjectmatter of appeal preferred by Revenue in such cases is more than Rs. 4 lakhs and less than Rs. 10 lakhs, assessees in those appeals are denied benefit of latest circular. In other words, where there is huge pendency of cases in Tribunal or court, appeal filed earlier is disposed of after circular, benefit accrues to assessee. However, in Tribunals and courts where pendency of cases is less, appeal filed recently is decided before circular or where assessee co-operates with court in speed disposal of appeal and appeal is disposed of before date of circular, he is denied benefit of circular. Therefore, benefit to which assessee is entitled to should not be dependant on date of decision, over which neither assessee nor Revenue has no control. In this context, circular would be discriminatory, it it is held to be prospective only. It could be saved from such vice of discrimination by holding it as retrospective. Though Circular/Instruction No. 3 of 2011 is issued by Department in pursuance of power conferred under statutory provisions while issuing such circular/instruction, Department has not kept in mind object with which such circulars/instructions are issued from time to time. object sought to be achieved by such circulars/instructions and also law declared by apex court, National Litigation Policy, 2011, as well as various schemes introduced by Department granting relief to persons who have not even filed returns and paid taxes, are kept in mind, to bring circular/instruction in harmony with National Litigation Policy, it would be appropriate to hold that benefit of such circular/instruction also applies to pending cases appeal in various courts and Tribunals on date of circular/instruction." On other hand, Full Bench of Gujarat High Court in CIT v. Shambhubhai Mahadev Ahir [2014] 363 ITR 572 (Guj) [FB] held that circulars/instructions issued by Central Board of Direct Taxes are not applicable to pending appeals. Gujarat High Court held that language employed was clear and unambiguous and, therefore, it is not for court to interpret same in different way. Full Bench further held that where language was clear and unambiguous, literal rule of interpretation would apply and it is not required to take aid of other rules of construction of statutes and that purposive construction should only be used in rare case. Similarly, Full Bench of Punjab and Haryana High Court in CIT v. Varindera Construction Co. [2011] 331 ITR 449 (P&H) [FB] also held that pending appeals could not be governed by subsequent circular unless it was specifically provided in circular. Punjab and Haryana High Court held that object of circular was to regulate filing of appeal and not to regulate appeals already filed. Similar view was reiterated by Madras High Court in CIT v. Kodanand Tea Estates Co. [2005] 275 ITR 244 (Mad). Kerala High Court in case of CWT v. John L. Chackola [2011] 337 ITR 385 (Ker) and Chhattisgarh High Court in case of CIT v. Navbharat Explosives Co. P. Ltd. [2011] 337 ITR 515 (Chhattisgarh), have held that (page 525 of 337 ITR): "... maintainability of appeals/references at instance of Revenue is to be considered on basis of circulars/ instructions prevailing at relevant time when appeal/reference was made and instruction issued, vide circular dated May 15, 2008, is prospective and it has no application whatsoever to any proceedings initiated before May 15, 2008, and same remain undecided and pending after May 15, 2008." In light of contentions raised by parties and various provisions indicated above, we find that instructions issued by Central Board of Direct Taxes is not merely administrative instruction but is extension of statute being issued under section 268A of Act. Division Bench of Punjab and Haryana High Court in CIT v. Oscar Laboratories P. Ltd. [2010] 324 ITR 115 (P&H) held that as consequence of insertion of section 268A in Act, orders, instructions, or directions issued on subject of monetary limits for filing appeals must be deemed to have attained statutory status. Legislature in its wisdom clearly desired to give effect to all instructions issued on subject of monetary limits for regulating filing of appeals retrospectively. Accordingly, all instructions laying down monetary limits for filing appeals issued on or after April 1, 1999, by deeming fiction has to be treated as having been issued under section 268(1) of Act. contention of Department that section 260A of Act authorises Department to prefer appeal to High Court from every order passed in appeal by appellate authority subject to condition that Department should satisfy High Court that case involves substantial question of law and, consequently, this substantive right cannot be curtailed by provision of section 268A of Act or by instructions issued by Central Board of Direct Taxes under section 119 of Act cannot be accepted. At outset, instructions issued by Central Board of Direct Taxes are binding on Department. Prior to introduction of section 268A in Act, object of issuing instructions under section 119 of Act was apparent and obvious, namely, to alleviate unnecessary hardship to assessee and also to avoid financial hardship and long drawn appellate proceedings even for Department. objects recorded in Bill while introducing section 268A into Act was aimed at alleviating and remedying hardship being caused to assessee as well as to reduce financial burden upon Income-tax Department in pursuing appeals where tax effect was negligible. perusal of sub-section (1) of section 268A of Act indicates that Central Board of Direct Taxes was authorised to issue orders, instructions or directions to income- tax authorities laying monetary limits for purpose of filing appeals. As consequence of insertion of section 268A in Act, orders and instructions or directions issued on subject of monetary limits for filing appeals has attained statutory status and it has become mandatory for Department to comply with requirement on subject of monetary limits for filing appeals. Sub-section (5) of section 268A of Act indicates that earlier instructions issued by Central Board of Direct Taxes fixing monetary limits for filing appeal shall be deemed to have been issued under section 268A of Act. After introduction of section 268A into Act, section 260A of Act cannot be read independently. Both section 260A and section 268A of Act will have to be interpreted by reading two provisions harmoniously. Section 268A was inserted in Act with retrospective effect from April 1, 1999. Legislature desired to give statutory effect to all instructions issued on subject of monetary limits in regulating filing of appeals retrospectively. We are of view that instructions issued by Central Board of Direct Taxes laying down monetary limits for filing appeal is mandatory and binding on Revenue. contention of Department that right to file appeal under section 260A of Act by Department cannot be restricted or carved by any instructions of Central Board of Direct Taxes or by section 268A is patently erroneous and cannot be accepted. Similar view was also given by Punjab and Haryana High Court in Oscar Laboratories's case (supra). In light of aforesaid, there is no doubt that instructions issued by Central Board of Direct Taxes only regulates monetary limits for filing appeal. Instruction No. 3 of 2011 clearly indicates that no appeal could be filed where tax effect was less than Rs. 10 lakhs. mandatory provision has been made that no appeal would be filed where tax effect is less than prescribed limit. Paragraph 3 of Instruction also indicates that appeal above prescribed limit cannot be filed merely on ground that tax effect is more than monetary limit. embargo has been created that even where tax effect is more than monetary limit, appeal could only be filed on merits and not otherwise. Paragraph 4 of Instruction further indicates that if composite order has been passed for several assessment years then appeal could be filed notwithstanding that tax effect in one of assessment years was less than prescribed limit. Central Board of Direct Taxes has carved out certain exceptions under paragraph 8 by which appeal could be filed where tax effect was less than monetary limits, namely, where constitutional validity of provisions of Act or rule was under challenge or where Board's order, notification, instruction or circulation has been held to be illegal or ultra vires or where Revenue's audit objection in case has been accepted by Department. We find that Central Board of Direct Taxes, while issuing aforesaid instruction, has partly complied with National Litigation Policy. Central Board of Direct Taxes has not fully applied its mind in this regard. policy clearly indicated that all pending cases would be reviewed from time to time so that frivolous and vexatious cases are filtered and that cases, which are covered by previous decisions of court are also withdrawn. only measure taken by Central Board of Direct Taxes in reducing litigation was to raise monetary limit. No effort was made to review pending cases. Consequently, we are of opinion that Instruction No. 3 of 2011 does not fulfil we are of opinion that Instruction No. 3 of 2011 does not fulfil requirement prescribed by National Litigation Policy and that Instruction No. 3 of 2011 only fulfils requirement partially. If only Instruction No. 3 of 2011 had been made applicable to pending cases also as laid down by National Litigation Policy, object of policy would have been fulfilled. No doubt, instructions issued by Central Board of Direct Taxes only regulates filing of appeal. Paragraph 11 only indicates that instruction would apply to appeals filed on or after February 9, 2011, and where appeals have been filed before February 9, 2011, said appeals would be governed by instructions operative at time when such appeal was filed, which in instant case was Instruction No. 1979, dated March 27, 2000. Whereas instructions issued by Central Board of Direct Taxes only regulates filing of appeal, sub-section (4) of section 268A will come into play when appeal is being heard and court will then have regard to orders, instructions or directions issued under sub-section (1) of section 268A and circumstances under which such appeal was filed or not filed in respect of any case. Meaning thereby, that at stage of hearing of appeal, court can see where circumstances contemplated under paragraph 3 of instructions was existing or not. At this stage paragraph 3 of instruction dated March 27, 2000, is again being reproduced: "3. Adverse judgments relating to following should be contested irrespective of revenue effect: (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. (iv) Where constitutional validity of provisions of Act are under challenge." These exceptions as indicated in paragraph 3 of Instruction dated March 27, 2000, is more or less same as given in Instruction No. 3 of 2011. If aforesaid exceptions are not existing at time of hearing of appeal, court can decline to hear matter on merits and can dismiss appeal on ground that monetary limit is less than prescribed limit applicable to appeals being filed as on date, i.e., as per latest instructions. Consequently, paragraph 11 of Instruction No. 3 of 2011 will only be considered at stage of filing appeal but when said appeal is being heard, exceptions as depicted in paragraph 3 of Instructions of March 27, 2000, would be considered as to whether those exceptions still exists or not. If exceptions exists, court will hear and decide matter on merits, failing which it will decline and dismiss appeal on ground of monetary limits. object of issuing such instruction is apparent and obvious, namely, to alleviate unnecessary hardship to assessee and also to avoid financial hardship even for Department where tax effect at time of hearing of appeal becomes negligible. In this regard, Bombay High Court in Pithwa Engineering Works (supra) has held that judicial notice of fact should be taken that by passage of time, value of money has gone down and that cost of litigation expenses have gone up. value of tax effect at time when appeal was filed may have been substantial but by passage of time, money value has gone down at stage when appeal was being heard. In our view, monetary limit as per latest instructions should apply equally to pending appeals unless exception indicating in instructions at time of filing appeal is carved out, which, according to Department, still exists. Punjab and Haryana High Court in Oscar Laboratories (supra) held (page 143 of 324 ITR): "There can be no doubt, that process of litigation is financial hardship. individual assessee may have to suffer hardship far beyond effect thereof on Revenue. Revenue also incurs financial expense, which when taken to its logical effect, falls on shoulders of general public as same is incurred out of money collected from innocent taxpayers. Filing of appeal should be fruitful exercise. appeal should not be filed only to press proposition of law, unless it results in adverse inference against Revenue. veracity of filing appeal must be gauged with reference to tax, which is likely to be recovered by Revenue, on success thereof. If tax, which is likely to be recovered by Revenue, on success thereof. If proportion of aforesaid recovery of tax as against expenses incurred in pursuing appellate remedy is negligible, and there is no other adverse effect, inference should be, that remedy of appeal would be exercise in futility. In such eventuality, appeal should not be filed." There is another aspect of matter. As per latest instructions, no appeal could be filed and, consequently, cannot be heard where tax effect is less than Rs. 10 lakhs. Would it be justified if pending appeal, which has tax effect of less than Rs. 10 lakhs is now heard on merits ? In our opinion, there is no logic behind this approach. If instruction is only held to be prospective and is not applicable to pending appeals, it would be hit by vice of discrimination. Consequently, in our view, we have no hesitation in holding that if exceptions indicated in instructions exists at time of hearing of appeal, same would be decided on merits otherwise appeal would be dismissed on ground of monetary limit. By doing this, instructions would be saved from vice of discrimination. At this stage, we may take notice that underlying purpose of National Litigation Policy was to reduce Government litigation in courts so that valuable court time is spent in resolving other pending issues. Bombay High Court in Pithwa Engineering Works (supra) has held that corridors of superior courts are choked with huge pendency of cases. National Litigation Policy was formulated to reduce cases pending in various courts and to make Government efficient litigant. Consequently, if Central Board of Direct Taxes has issued policy not to file appeals, which is less than Rs. 2 lakhs and now Rs. 10 lakhs, same policy should also be adopted for pending appeals. Department is not justified in proceeding with pending matters where tax impact has now become minimal. In light of aforesaid, object and intention and surrounding circumstances of National Litigation Policy introduced by Central Government has to be kept in mind. As stated earlier, underlying purpose was to reduce pending Government litigation in courts from 15 years to 3 years so that valuable court time could be saved for several contentious issues. Pending cases were required to be reviewed and frivolous and vexatious matters was required to be filtered out from meritorious ones. Unfortunately, instructions issued by Central Board of Direct Taxes only partially satisfied requirement in respect of future litigation but did not take into consideration reviewing pending cases. Full Bench of Gujarat High Court and Punjab and Haryana High Court held that instructions issued by Central Board of Direct Taxes was only prospective in nature. Full Bench further held that where language of instructions were clear and unambiguous only literal interpretation should be given and that it is not for court to interpret language in different way. There is no quarrel with aforesaid proposition laid down by Full Bench of Gujarat High Court and Punjab and Haryana High Court but in deference to said decisions, we find that National Litigation Policy was not taken into consideration and, consequently, Full Bench only applied literal interpretation of instructions. Considering object and intention and surrounding circumstances of National Litigation Policy, it is necessary for court to iron out creases bearing in mind principles of interpretation as discussed above and legal proposition that flows from such interpretation. We find that there is defect in instructions issued by Central Board of Direct Taxes. only measure taken in reducing litigation was to raise monetary limit. No effort was made to review pending cases. Accordingly, we are of opinion that literal rule of interpretation cannot be applied in instant case. Since instructions is beneficial piece of legislation, pendulum is tilted more in favour of assessee and impels court to interpret provisions harmoniously by adopting purposive method of construction. We must not shut our eyes to object for which instructions were issued and if instructions had been made applicable to pending cases as laid down by National Litigation Policy, object of policy would have been fulfilled. We are not here to legislate but to expound and in such situation, we at best could be called reformers or polishers of legislation as to fill up gaps left in legislation. Paragraph 11 of Instruction No. 3 of 2011 makes it apparently clear that it applies to appeals that would be filed on or after February 9, 2011. However, section 268(4) of Act allows court to consider circumstances under which such appeal was filed while hearing appeal. By reading paragraph 11 harmoniously with sub-section (4) of section 268 one can remove mischief or defect in Instruction No. 3 of 2011. By our orders, we had directed Central Board of Direct Taxes and Incometax Department to take conscious decision and review pending cases, which they failed to do so. On other hand, Department insisted in hearing appeal on merits. We find that exception carved out under of instructions are not existing and that appeal was only filed because tax effect was above monetary limit. We also find that there is nothing to indicate that issue involved in instant appeal has cascading effect which would affect same issue in subsequent assessment years. In light of aforesaid, we find that since Central Board of Direct Taxes while issuing Instruction No. 3 of 2011 had not kept in mind object and intention sought to be achieved by National Litigation Policy and, in order to bring harmony with National Litigation Policy, we are of opinion that Instruction No. 3 of 2011 would also apply to pending appeals in various courts or tribunals unless it is pointed out by Department that appeal would have cascading effect in other assessment years of assessee or that it is within exception provided in instructions that was issued at time when appeal was presented. In view of aforesaid, appeal is dismissed on ground of monetary limit without expressing any opinion on merits of claim making it clear that it would be open to department to proceed against assessee in any other assessment year on same issue if it is above monetary limit prescribed. In circumstances of case, parties shall bear their own cost. *** Commissioner of Income-tax v. Shyam Biri Work