Dr. M.P. Naresh Kumar, CHENNAI V. ACIT, CHENNAI

CO 119/CHNY/2012

• Counselvise Citation: [2012] 122 COUNSELVISE.COM (IT) 7623 (ITAT-CHENNAI)
• Duration Of Justice: 1 month(s) 29 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 28-08-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2006-2007
• Appeal Filed On: 29-06-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: S DASGUPTA
• Keywords: Gift; Tax effect
• Section: 12A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, CHENNAI BEFORE SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBER AND SHRI VIKAS AWASTHY, JUDICIAL MEMBER W.T.A. NO.29/MDS/2012 (ASSESSMENT YEAR : 2006-07) THE ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE I(2), CHENNAI - 600 034. (APPELLANT) V. DR. M.P. NARESH KUMAR, 93, POES GARDEN, GOPALAPURAM, CHENNAI - 600 086. PAN : AACPN7535M (RESPONDENT) C.O. NO. 119/MDS/2012 (IN W.T.A. NO. 29/MDS/2012) (ASSESSMENT YEAR : 2006-07) DR. M.P. NARESH KUMAR, 93, POES GARDEN, GOPALAPURAM, CHENNAI - 600 086. (CROSS-OBJECTOR) V. THE ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE I(2), CHENNAI - 600 034. (RESPONDENT) REVENUE BY : SHRI S. DASGUPTA, JCIT ASSESSEE BY : NONE DATE OF HEARING : 28.08.2012 DATE OF PRONOUNCEMENT : 28.08.2012 O R D E R PER ABRAHAM P. GEORGE, ACCOUNTANT MEMBER : THESE ARE APPEAL AND CROSS-OBJECTION FILED BY THE REVENUE AND ASSESSEE RESPECTIVELY, AGAINST AN ORDER DATED 12.3. 2012 OF COMMISSIONER OF INCOME TAX (APPEALS)-I, CHENNAI, FO R THE IMPUGNED 2 W.T.A. NO.29/MDS/12 C.O. NO. 119/MDS/12 ASSESSMENT YEAR. CROSS-OBJECTION FILED BY THE ASSE SSEE IS IN SUPPORT OF THE ORDER OF CIT(APPEALS). 2. WHEN THE APPEAL CAME UP FOR HEARING, IT WAS POIN TED OUT BY THE BENCH THAT THE PENALTY LEVIED WAS ONLY ` 13,874/- UNDER SECTION 18(1)(C) OF WEALTH TAX ACT, 1957 AND LEARNED D.R. WAS REQUES TED TO EXPLAIN HOW THE APPEAL WAS MAINTAINABLE IN VIEW OF LOW TAX EFFE CT. AT THIS LEARNED D.R. SUBMITTED THAT CBDT INSTRUCTION NO.3/2011 DATE D 9.2.2011 APPLIED ONLY TO INCOME-TAX MATTERS. ACCORDING TO LEARNED D .R., THE APPEAL WAS FILED ON 30.5.2012 AND THEREFORE, INSTRUCTION NO.3/ 2011 APPLIED. AS PER THE LEARNED D.R., THE SAID INSTRUCTION WAS APPLICAB LE ONLY ON INCOME-TAX MATTERS AND NOT ON WEALTH-TAX MATTERS. 3. NOBODY APPEARED ON BEHALF OF ASSESSEE. 4. WE HAVE PERUSED THE ORDERS AND ALSO HEARD THE CO NTENTION OF LEARNED D.R. AS PER LEARNED D.R., THOUGH THE PENAL TY AMOUNT INVOLVED WAS ONLY A PALTRY SUM OF ` 13,874/-, THE APPEAL WAS STILL MAINTAINABLE FOR A REASON THAT INSTRUCTION NO.3/2011 DATED 9.2.2011 PRESCRIBING MONETARY LIMITS FOR FILING APPEALS, APPLIED ONLY TO INCOME-T AX MATTERS. ON GOING THROUGH INSTRUCTION NO.3/2011, IT IS SEEN THAT AT P ARA 10 IT IS MENTIONED THAT MONETARY LIMITS SPECIFIED THEREIN DID NOT APPL Y TO DIRECT TAX MATTERS OTHER THAN INCOME-TAX. IT IS ALSO MENTIONED THAT F ILING OF APPEALS IN OTHER 3 W.T.A. NO.29/MDS/12 C.O. NO. 119/MDS/12 DIRECT TAX MATTERS SHALL BE GOVERNED BY RELEVANT PR OVISIONS OF STATUTE AND RULES. RELEVANT PARA OF INSTRUCTION NO.3/2011 OF 9 .2.2011 IS REPRODUCED HEREUNDER FOR BREVITY:- 10. THE MONETARY LIMITS SPECIFIED IN PARA 3 ABOVE SHA LL NOT APPLY TO WRIT MATTERS AND DIRECT TAX MATTERS OTHER THAN IN COME-TAX, FILING OF APPEALS IN OTHER DIRECT TAX MATTERS SHALL CONTINU E TO BE GOVERNED BY RELEVANT PROVISIONS OF STATUTE AND RULES. FURTH ER, FILING OF APPEAL IN CASES OF INCOME-TAX, WHEN THE TAX EFFECT IS NOT QU ANTIFIABLE OR NOT INVOLVED, SUCH AS THE CASE OF REGISTRATION OF T RUSTS OR INSTITUTIONS UNDER SECTION 12A OF THE I.T. ACT, 1961, SHALL NOT BE GOVERNED BY THE LIMITS SPECIFIED IN PARA 3 ABOVE AND DECISION TO FILE APPEAL IN SUCH CASE MAY BE TAKEN ON MERITS OF A PAR TICULAR CASE. 5. NOW THE QUESTION BEFORE US WILL THE ABOVE PARA IN THE CIRCULAR ENABLE THE REVENUE TO FILE AN APPEAL IN A WEALTH-TA X MATTER, EVEN WHEN THE TAX EFFECT IS LESS THAN ` 3 LAKHS MENTIONED IN THE SAID CIRCULAR? THE CIRCULAR SPECIFICALLY MENTIONS THAT IT IS IN SUPERS ESSION OF EARLIER INSTRUCTION NO.5/2008 DATED 15.5.2008. A LOOK AT C BDT INSTRUCTION NO.5/2008 DATED 15.5.2008 CLEARLY SHOWS THAT THESE INSTRUCTIONS WERE ISSUED IN SUPERSESSION OF CERTAIN EARLIER INSTRUCTI ONS ON THE MATTER. THE INSTRUCTIONS WHICH STOOD SUPERSEDED BY CBDT INSTRUC TION NO.5/2008 IS MENTIONED AT THE PREAMBLE OF THE SAID INSTRUCTION I TSELF WHICH READS AS UNDER:- REFERENCE IS INVITED TO BOARDS INSTRUCTIONS NO.1979 DA TED 27.3.2000, NO.1985 DATED 29.6.2000, NO.6 OF 2003 DATED 17.7.2003, NO.19 OF 2003 DATED 23.12.2003, NO.5/2004 DATED 27.5.2004, NO.2/2005 DATED 24.10.2005 AND NO.5/2007 DATED 16.7.2007, WHEREIN MONETARY LIMITS FOR FILING DEPARTMENTAL APP EALS (IN INCOME- 4 W.T.A. NO.29/MDS/12 C.O. NO. 119/MDS/12 TAX MATTERS) AND OTHER CONDITIONS WERE SPECIFIED, FO R FILING APPEALS BEFORE APPELLATE TRIBUNALS, HIGH COURTS AND SUPREME COURT. 6. OF THE MANY INSTRUCTIONS THAT WERE SUPERSEDED, W HAT ARE RELEVANT HERE ARE INSTRUCTION NO.5/2007 DATED 16.7.2007 AND INSTRUCTION NO.1979 DATED 27.3.2000. PARA 5 OF INSTRUCTION NO.1979 DAT ED 27.3.2000 CLEARLY MENTIONS THAT THE SAID INSTRUCTION APPLIED TO OTHER DIRECT TAX MATTERS ALSO INCLUDING WEALTH-TAX, GIFT-TAX AND ESTATE DUTY. PA RA 4 OF INSTRUCTION NO.5 OF 2007 DATED 16.7.2007 CLEARLY MENTIONS THAT EXCEP T FOR CHANGES IN MONETARY LIMITS MENTIONED THEREIN, EARLIER INSTRUCT ION NO.1979 DATED 27.3.2000 CONTINUED TO APPLY. IN OUR OPINION, CBDT INSTRUCTION NO.5/2008 WHICH STATES THAT IT SUPERSEDES CIRCULARS RELATING TO MONETARY LIMITS FOR FILING DEPARTMENTAL APPEALS IN INCOME-TA X MATTERS, WILL NOT EFFECT THE MONETARY LIMITS FOR FILING DEPARTMENTAL APPEALS IN RELATION TO OTHER DIRECT TAX MATTERS MENTIONED AT PARA 5 OF INSTRUCTI ON NO.1979 OF 27.3.2000. FROM PARA 10 OF INSTRUCTION NO.3/2011 D ATED 9.2.2011, WHICH WE HAVE REPRODUCED AT PARA 4 ABOVE, IT IS CLE AR THAT WITH REGARD TO APPEALS ON OTHER DIRECT TAX MATTERS, VIZ. MATTERS O THER THAN INCOME-TAX, THEY SHALL BE GOVERNED BY RELEVANT PROVISIONS OF ST ATUTE AND RULES. CBDT INSTRUCTIONS EARLIER ISSUED, THOUGH SUPERSEDED WITH REGARD TO INCOME-TAX MATTERS, WERE ALL ISSUED UNDER POWERS VE STED ON IT UNDER SECTION 119 OF INCOME-TAX ACT, 1961. THUS, WHEN IT IS CLEARLY MENTIONED IN INSTRUCTION NO.3/2011 THAT FOR MATTERS RELATING TO DIRECT TAX OTHER THAN 5 W.T.A. NO.29/MDS/12 C.O. NO. 119/MDS/12 INCOME-TAX, RELEVANT PROVISIONS OF STATUTE AND RULE S WILL CONTINUE TO APPLY, IT WOULD BY IMPLICATION MEANS THAT EARLIER I NSTRUCTIONS INSOFAR AS IT RELATED TO MATTERS OTHER THAN INCOME-TAX WOULD CONT INUE TO APPLY. BY VIRTUE OF INSTRUCTION NO.5/2007 DATED 16.7.2007, TH E MONETARY LIMIT FOR FILING OF APPEALS BEFORE THIS TRIBUNAL WAS INCREASE D ` 1 LAKH. BY VIRTUE OF INSTRUCTION NO.1979 DATED 27.3.2000, THE MONETARY L IMITS MENTIONED APPLIED ALSO TO WEALTH-TAX, GIFT-TAX AND ESTATE DUT Y MATTERS. IN OUR OPINION, WHEN THESE INSTRUCTIONS ARE READ TOGETHER, DESPITE THE SUPERSESSION EFFECTED BY INSTRUCTION NO.3/2011 DATE D 9.2.2011 OF EARLIER INSTRUCTION NO.5/2008 DATED 15.5.2008 AND SUPERSESS ION OF INSTRUCTIONS MENTIONED AT PARA 5 ABOVE BY US, THROUGH INSTRUCTIO N NO.5/2008 DATED 15.5.2008, THE EARLIER INSTRUCTIONS INSOFAR AS IT A PPLIED TO WEALTH-TAX, GIFT- TAX AND ESTATE DUTY MATTER WOULD CONTINUE IN FORCE. FOR TAKING THE VIEW THAT THE INSTRUCTION NO.5/2008 AS ALSO INSTRUCTION NO.3/2011 WILL APPLY TO WEALTH-TAX MATTER ALSO, WE ARE FORTIFIED BY THE DEC ISION OF HONBLE KERALA HIGH COURT IN THE CASE OF CWT V. JOHN L. CHACKOLA I N WTA NO.108 OF 2009 DATED 7 TH DECEMBER, 2009. THOUGH IN THE SAID CASE, IT WAS DECIDED THAT THE APPEAL WAS INDEED MAINTAINABLE, IT WAS SO RULED FOR A REASON THAT THE APPEAL WAS FILED PRIOR TO THE DATE OF INSTRUCTION NO.5/2008 COMING INTO EFFECT AND PRIOR TO THAT DATE LIMITS MENTIONED IN INSTRUCTION NO.2/2005 ONLY APPLIED. NEVERTHELESS, IT IS CLEAR FROM THIS 6 W.T.A. NO.29/MDS/12 C.O. NO. 119/MDS/12 DECISION OF HONBLE KERALA HIGH COURT THAT THE SAID INSTRUCTIONS DID APPLY TO WEALTH-TAX MATTERS ALSO. 7. AS FOR THE ISSUE WHETHER MONETARY LIMITS WILL AL SO APPLY TO PENALTY APPEALS, IT IS CLEARLY MENTIONED IN PARA 4 OF INSTR UCTION NO.3/2011 DATED 9.2.2011 ITSELF THAT IN CASE OF PENALTY ORDERS, TAX EFFECT WOULD MEAN QUANTUM OF PENALTY DELETED OR REDUCED. 8. IN THIS VIEW OF THE MATTER, WE ARE OF THE OPINI ON THAT THE APPEAL FILED BY THE REVENUE IS NOT MAINTAINABLE DUE TO LOW TAX EFFECT. 9. REVENUES APPEAL IS DISMISSED. 10. AS FOR THE CROSS-OBJECTION FILED BY THE ASSESSE E, THIS BEING IN SUPPORT OF THE ORDER OF CIT(APPEALS), HAS BECOME IN FRUCTUOUS AND IS ALSO DISMISSED. 11. TO SUMMARIZE THE RESULT, APPEAL FILED BY THE RE VENUE IS DISMISSED AND CROSS-OBJECTION FILED BY THE ASSESSEE IS ALSO D ISMISSED. THE ORDER WAS PRONOUNCED IN THE COURT ON TUESDAY, T HE 28 TH OF AUGUST, 2012, AT CHENNAI. SD/- SD/- (VIKAS AWASTHY) (ABRAHAM P. GEORGE) JUDICIAL MEMBER ACCOUNTANT MEMBER CHENNAI, DATED THE 28 TH AUGUST, 2012. KRI. 7 W.T.A. NO.29/MDS/12 C.O. NO. 119/MDS/12 COPY TO: (1) ASSESSEE (2) ASSESSING OFFICER (3) CIT(A)-I, CHENNAI (4) CIT, CENTRAL-I, CHENNAI (5) D.R. (6) GUARD FILE