Lankadasu Anila, Vijayawada V. THE DCIT, CIRCLE - 2(1), Vijayawada

CO 101/VIZ/2013

• Counselvise Citation: [2015] 123 COUNSELVISE.COM (IT) 1785 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 2 year(s) 1 month(s) 4 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 18-12-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2007-2008
• Appeal Filed On: 13-11-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: K RAJESWA R
• Assessee Lawyers: D KOMALI KRISHNA
• Keywords: Audit objection; Tax effect
• Section: 12

Judgement Text

ITA NO.481/VIZAG/2013 LANKADASU ANILA, VIJAYAWADA 1 , , IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM . . . . , . . . . , $ $ $ $ BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER & SHRI G. MANJUNATHA, ACCOUNTANT MEMBER ./ I.T.A.NO.481/VIZAG/2013 ( / ASSESSMENT YEAR : 2007-08 ) DCIT CIRCLE - 2(1) VIJAYAWADA VS. LANKADASU ANILA VIJAYAWADA [ PAN : AA VPL 4491R ] ( & & & & / APPELLANT) ( '(& '(& '(& '(& / RESPONDENT ) C.O. NO.101/VIZAG/2013 (ARISING OUT OF I.T.A.NO.481/VIZAG/2013) ( / ASSESSMENT YEAR : 2007-08 ) LANKA DASU ANILA VIJAYAWADA VS. DCIT CIRCLE - 2(1) VIJAYAWADA ( & & & & / APPELLANT) ( '(& '(& '(& '(& / RESPONDENT ) & ) / APPELLANT BY : SMT. D. KOMALI KRISHNA, DR '(& ) / RESPONDENT BY : SHRI K. RAJESWAR, AR ) - / DATE OF HEARING : 11.12.2015 ) - / DATE OF PRONOUNCEMENT : 18.12.2015 ITA NO.481/VIZAG/2013 LANKADASU ANILA, VIJAYAWADA 2 / O R D E R PER G. MANJUNATHA, ACCOUNTANT MEMBER: THIS APPEAL IS PREFERRED BY THE REVENUE AGAINST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) VIJAYA WADA DATED 23.04.2013. 2. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AND ALSO PERUSED THE RELEVANT MATERIAL ON RECORDS. AT THE OUTSET, IT IS OBSERVED THAT THE TAX EFFECT INVOLVED IN THIS APPEAL OF THE REVENUE I S LESS THAN THE MONETARY LIMIT OF RS.10 LAKHS PRESCRIBED BY THE LAT EST CIRCULAR NO.21/2015 OF CBDT FOR FILING THE APPEALS BEFORE TH E TRIBUNAL BY THE REVENUE, WHICH READS AS FOLLOWS: CIRCULAR NO. 21/2015 F NO 279/MISC.142/2007-ITJ (PT) GOVERNMENT OF INDIA MINISTRY OF FINANCE DEPARTMENT OF REVENUE CENTRAL BOARD DIRECT TAXES NEW DELHI THE 10TH DECEMBER, 2015 SUBJECT: REVISION OF MONETARY LIMITS FOR FILING OF APPEALS BY THE DEPARTMENT BEFORE INCOME TAX APPELLATE TRIBUNAL AND HIGH COURTS AND SLP BEFORE SUPREME COURT - MEASURES FOR REDUCING LITIGATION - REG - REFERENCE IS INVITED TO BOARDS INSTRUCTION NO 5/201 4 DATED 10.07.2014 WHEREIN MONETARY LIMITS AND OTHER CONDIT IONS FOR FILING DEPARTMENTAL APPEALS (IN INCOME-TAX MATT ERS) BEFORE APPELLATE TRIBUNAL AND HIGH COURTS AND SLP B EFORE THE SUPREME COURT WERE SPECIFIED. ITA NO.481/VIZAG/2013 LANKADASU ANILA, VIJAYAWADA 3 2. IN SUPERSESSION OF THE ABOVE INSTRUCTION, IT HAS BE EN DECIDED BY THE BOARD THAT DEPARTMENTAL APPEALS MAY BE FILED ON MERITS BEFORE APPELLATE TRIBUNAL AND HIGH COURTS AND SLP BEFORE THE SUPREME COURT KEEPING IN VIEW THE MONETA RY LIMITS AND CONDITIONS SPECIFIED BELOW. 3. HENCEFORTH, APPEALS! SLPS SHALL NOT BE FILED IN CAS ES WHERE THE TAX EFFECT DOES NOT EXCEED THE MONETARY LIMITS GIVEN HEREUNDER: IT IS CLARIFIED THAT AN APPEAL SHOULD NOT BE FILED MERELY BECAUSE THE TAX EFFECT IN A CASE EXCEEDS THE MONETARY LIMIT S PRESCRIBED ABOVE. FILING OF APPEAL IN SUCH CASES IS TO BE DECI DED ON MERITS OF THE CASE. 4. FOR THIS PURPOSE, 'TAX EFFECT' MEANS THE DIFFERENCE BETWEEN THE TAX ON THE TOTAL INCOME ASSESSED AND TH E TAX THAT WOULD HAVE BEEN CHARGEABLE HAD SUCH TOTAL INCOME BE EN REDUCED BY THE AMOUNT OF INCOME IN RESPECT OF THE I SSUES AGAINST WHICH APPEAL IS INTENDED TO BE FILED (HEREI NAFTER REFERRED TO AS 'DISPUTED ISSUES'). HOWEVER THE TAX WILL NOT INCLUDE ANY INTEREST THEREON, EXCEPT WHERE CHARGEAB ILITY OF INTEREST ITSELF IS IN DISPUTE. IN CASE THE CHARGEABILITY OF INTEREST IS THE ISSUE UNDER DISPUTE, THE AMOUNT OF INTEREST SHA LL BE THE TAX EFFECT. IN CASES WHERE RETURNED LOSS IS REDUCED OR ASSESSED AS INCOME, THE TAX EFFECT WOULD INCLUDE NO TIONAL TAX ON DISPUTED ADDITIONS. IN CASE OF PENALTY ORDERS, T HE TAX EFFECT WILL MEAN QUANTUM OF PENALTY DELETED OR REDU CED IN THE ORDER TO BE APPEALED AGAINST. 5. THE ASSESSING OFFICER SHALL CALCULATE THE TAX EFFEC T SEPARATELY FOR EVERY ASSESSMENT YEAR IN RESPECT OF THE DISPUTED ISSUES IN THE CASE OF EVERY ASSESSEE. IF, IN THE CASE OF AN ASSESSEE, THE DISPUTED ISSUES ARISE IN MORE THAN ONE ASSESSMENT YEAR, APPEAL, CAN BE FILED IN RESPECT OF SUCH ASSESSMENT YEAR OR YEARS IN WHICH THE TAX EFFECT IN RESPECT OF THE DISPUTED ISSUES EXCEEDS THE MONETARY LIMIT S PECIFIED IN PARA 3. NO APPEAL SHALL BE FILED IN RESPECT OF AN A SSESSMENT S.NO. APPEALS IN INCOME-TAX MATTERS MONETARY LIMIT (IN RS.) 1. BEFORE APPELLATE TRIBUNAL 10,00,000/- 2. BEFORE HIGH COURT 20,00,000/- 3. BEFORE SUPREME COURT 25,00,000/- ITA NO.481/VIZAG/2013 LANKADASU ANILA, VIJAYAWADA 4 YEAR OR YEARS IN WHICH THE TAX EFFECT IS LESS THAN THE MONETARY LIMIT SPECIFIED IN PARA 3. IN OTHER WORDS, HENCEFOR TH, APPEALS CAN BE FILED ONLY WITH REFERENCE TO THE TAX EFFECT IN THE RELEVANT ASSESSMENT YEAR. HOWEVER, IN CASE OF A COM POSITE ORDER OF ANY HIGH COURT OR APPELLATE AUTHORITY, WHI CH INVOLVES MORE THAN ONE ASSESSMENT YEAR AND COMMON ISSUES IN MORE THAN ONE ASSESSMENT YEAR, APPEAL SHALL BE FILED IN RESPECT OF ALL SUCH ASSESSMENT YEARS EVEN IF THE 'TAX EFFECT I S LESS THAN THE PRESCRIBED MONETARY LIMITS IN ANY OF THE YEAR(S ), IF IT IS DECIDED TO FILE APPEAL IN RESPECT OF THE YEAR(S) IN WHICH 'TAX EFFECT' EXCEEDS THE MONETARY LIMIT PRESCRIBED. IN C ASE WHERE A COMPOSITE ORDER/ JUDGEMENT INVOLVES MORE THAN ONE ASSESSEE, EACH ASSESSEE SHALL BE DEALT WITH SEPARAT ELY. 6. IN A CASE WHERE APPEAL BEFORE A TRIBUNAL OR A COURT IS NOT FILED ONLY ON ACCOUNT OF THE TAX EFFECT BEIN G LESS THAN THE MONETARY LIMIT SPECIFIED ABOVE, THE COMMISSIONE R OF INCOME-TAX SHALL SPECIFICALLY RECORD THAT 'EVEN THO UGH THE DECISION IS NOT ACCEPTABLE, APPEAL IS NOT BEING FIL ED ONLY ON THE CONSIDERATION THAT THE TAX EFFECT IS LESS THAN THE MONETARY LIMIT SPECIFIED IN THIS INSTRUCTION'. FURTHER, IN S UCH CASES, THERE WILL BE NO PRESUMPTION THAT THE INCOME-TAX DEPARTME NT HAS ACQUIESCED IN THE DECISION ON THE DISPUTED ISSUES. THE INCOME-TAX DEPARTMENT SHALL NOT BE PRECLUDED FROM F ILING AN APPEAL AGAINST THE DISPUTED ISSUES IN THE CASE OF T HE SAME ASSESSEE FOR ANY OTHER ASSESSMENT YEAR, OR IN THE C ASE OF ANY OTHER ASSESSEE FOR THE SAME OR ANY OTHER ASSESS MENT YEAR, IF THE TAX EFFECT EXCEEDS THE SPECIFIED MONET ARY LIMITS. 7. IN THE PAST, A NUMBER OF INSTANCES HAVE COME TO THE NOTICE OF THE BOARD, WHEREBY AN ASSESSEE HAS CLAIME D RELIEF FROM THE TRIBUNAL OR THE COURT ONLY ON THE GROUND T HAT THE DEPARTMENT HAS IMPLICITLY ACCEPTED THE DECISION OF THE TRIBUNAL OR COURT IN THE CASE OF THE ASSESSEE FOR A NY OTHER ASSESSMENT YEAR OR IN THE CASE OF ANY OTHER ASSESSE E FOR THE SAME OR ANY OTHER ASSESSMENT YEAR, BY NOT FILING AN APPEAL ON THE SAME DISPUTED ISSUES. THE DEPARTMENTAL REPRESENTATIVES/COUNSELS MUST MAKE EVERY EFFORT TO BRING TO THE NOTICE OF THE TRIBUNAL OR THE COURT THAT THE AP PEAL IN SUCH CASES WAS NOT FILED OR NOT ADMITTED ONLY FOR THE RE ASON OF THE TAX EFFECT BEING LESS THAN THE SPECIFIED MONETARY L IMIT AND, THEREFORE, NO INFERENCE SHOULD BE DRAWN THAT THE DE CISIONS RENDERED THEREIN WERE ACCEPTABLE TO THE DEPARTMENT. ACCORDINGLY, THEY SHOULD IMPRESS UPON THE TRIBUNAL OR THE COURT THAT SUCH CASES DO NOT HAVE ANY PRECEDENT VAL UE. AS THE EVIDENCE OF NOT FILING APPEAL DUE TO THIS INSTRUCTI ON MAY HAVE TO BE ITA NO.481/VIZAG/2013 LANKADASU ANILA, VIJAYAWADA 5 PRODUCED IN COURTS, THE JUDICIAL FOLDERS IN THE OFF ICE OF COT MUST BE MAINTAINED IN A SYSTEMIC MANNER FOR EASY RETRIEV AL. 8 ADVERSE JUDGMENTS RELATING TO THE FOLLOWING ISSUE S SHOULD BE CONTESTED ON MERITS NOTWITHSTANDING THAT THE TAX EFFECT ENTAILED IS LESS THAN THE MONETARY LIMITS SP ECIFIED IN PARA 3 ABOVE OR THERE IS NO TAX EFFECT: (A) WHERE THE CONSTITUTIONAL VALIDITY OF THE PROVISIONS OF AN ACT OR RULE 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 THE CASE HAS BEEN ACCEPTED BY THE DEPARTMENT, OR (D) WHERE THE ADDITION RELATES TO UNDISCLOSED FOREIGN A SSETS/ BANK ACCOUNTS. 9. THE MONETARY LIMITS SPECIFIED IN PARA 3 ABOVE SHALL NOT APPLY TO WRIT MATTERS AND DIRECT TAX MATTERS OTHER THAN INCOME TAX. FILING OF APPEALS IN OTHER DIRECT TAX M ATTERS SHALL CONTINUE TO BE GOVERNED BY RELEVANT PROVISION S OF STATUTE & RULES. FURTHER, FILING OF APPEAL IN CASES OF INCO ME TAX, WHERE THE TAX EFFECT IS NOT QUANTIFIABLE OR NOT INV OLVED, SUCH AS THE CASE OF REGISTRATION OF TRUSTS OR INSTITUTIO NS UNDER SECTION 12 A OF THE IT ACT, 1961, SHALL NOT BE GOVE RNED BY THE LIMITS SPECIFIED IN PARA 3 ABOVE AND DECISION T O FILE APPEAL IN SUCH CASES MAY BE TAKEN ON MERITS OF A PARTICULA R CASE. 10. THIS INSTRUCTION WILL APPLY RETROSPECTIVELY TO PEND ING APPEALS AND APPEALS TO BE FILED HENCEFORTH IN HIGH COURTS/T RIBUNALS. PENDING APPEALS BELOW THE SPECIFIED TAX LIMITS IN P ARA 3 ABOVE MAY BE WITHDRAWN/NOT PRESSED. APPEALS BEFORE THE SUPRE ME COURT WILL BE GOVERNED BY THE INSTRUCTIONS ON THIS SUBJECT, OP ERATIVE AT THE TIME WHEN SUCH APPEAL WAS FILED. 11. THIS ISSUES UNDER SECTION 268A (1) OF THE INCOM E-TAX ACT 1961. (D.S. CHAUDHRY) CIT(A&J), CBDT NEW DELHI. ITA NO.481/VIZAG/2013 LANKADASU ANILA, VIJAYAWADA 6 4. KEEPING IN VIEW OF THE OBJECTIVE OF THE CIRCULAR ISSUED BY THE CBDT TO REDUCE THE PENDING LITIGATION WHERE THE TAX EFFE CT IS CONSIDERABLY LOW OR SMALL THAT THE SAME WOULD APPLY RETROSPECTIVELY TO PENDING APPEALS. THEREFORE, WE HOLD THAT THE PRESENT APPEAL FILED BY THE DEPARTMENT INVOLVING A TAX EFFECT OF LESS THAN THE MONETARY LI MIT OF RS.10 LAKHS FIXED BY THE CBDT IN ITS CIRCULAR NO.21 OF 2015 DAT ED 10 TH DECEMBER, 2015 FOR FILING OF APPEALS BY THE DEPARTMENT BEFORE THE TRIBUNAL, IS NOT MAINTAINABLE. THE SAME IS ACCORDINGLY DISMISSED. 5. THE CROSS OBJECTION FILED BY THE ASSESSEE, IS ON LY SUPPORTING THE ORDER OF CIT(A). THEREFORE, FOR THE REASONS RECORD ED IN THE PRECEDING PARAGRAPHS, WE DISMISS THE CROSS OBJECTION FILED BY THE ASSESSEE. 6. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED AND THE CROSS OBJECTION FILED BY THE ASSESSEE IS ALSO DISMI SSED. ORDER PRONOUNCED IN THE OPEN COURT ON 18 TH DEC15. SD/- SD/- ( . ) ( . . . . ) ( (( ( V. DURGA RAO ) )) ) ( G. MANJUNATHA) / // / JUDICIAL MEMBER / // / ACCOUNTANT MEMBER /VISAKHAPATNAM: 3 / DATED : 18.12.2015 VG/SPS ITA NO.481/VIZAG/2013 LANKADASU ANILA, VIJAYAWADA 7 ) ' 4 / COPY OF THE ORDER FORWARDED TO :- 1. & / THE APPELLANT THE DCIT, CIRCLE-2(1), VIJAYAWADA 2. '(& / THE RESPONDENT SMT. LANKADASU ANILA, PROPX: M/S. MARUTHI ASSOCIATE S, D.NO.46-15-8, 1 ST FLOOR, RAKESH MANSION, BRINDAVAN COLONY, VIJAYAWAD A-520 010. 3. 5 / THE CIT, VIJAYAWADA 4. 5 () / THE CIT (A), VIJAYAWADA 5. ' , , / // / DR, ITAT, VISAKHAPATNAM 6 . . . . / GUARD FILE / BY ORDER // TRUE COPY // 9: ( SR.PRIVATE SECRETARY ) , / // / ITAT, VISAKHAPATNAM