M/s. Orchid Infrastructure & Developers Pvt. Ltd., New Delhi V. ACIT, New Delhi

CO 135/DEL/2010

• Counselvise Citation: [2016] 123 COUNSELVISE.COM (IT) 2103 (ITAT-DELHI)
• Duration Of Justice: 5 year(s) 8 month(s) 25 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 29-02-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 24-02-2016
• Assessment Year: 2001-2002
• Appeal Filed On: 04-06-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: MITALI MANUSMITA
• Keywords: Audit objection; Retrospective amendment; Tax effect
• Section: 12A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: E: NEW DELHI BEFORE SMT. DIVA SINGH, JUDICIAL MEMBER AND SH. O.P. KANT, ACCOUNTANT MEMBER ITA NOS. 446 TO 449/DEL/2010 ASSESSMENT YEARS: 2001-02 TO 2004-05 ACIT, CENT. CIRCLE 2, ROOM NO. 323, E-2, ARA CENTRE, JHANDEWALAN EXTN., NEW DELHI VS. M/S. ORCHID INFRASTRUCTURE & DEVELOPERS PVT. LTD., 1011, SURYA KIRAN BLDG. K.G. MARG, NEW DELHI (PAN:AAACB0370M ) (APPELLANT) (RESPONDENT) AND C.O. NOS. 135 TO 138/DEL/2010 [ IN ITA NOS. 446 TO 449/DEL/2010] ASSESSMENT YEARS: 2001-02 TO 2004-05 M/S. ORCHID INFRASTRUCTURE & DEVELOPERS PVT. LTD., 1011, SURYA KIRAN BLDG. K.G. MARG, NEW DELHI (PAN:AAACB0370M ) VS. ACIT, CENT. CIRCLE 2, ROOM NO. 323, E-2, ARA CENTRE, JHANDEWALAN EXTN., NEW DELHI (APPELLANT) (RESPONDENT) APPELLANT BY SMT. MITALI MANUSMITA, CIT(DR) RESPONDENT BY SH. ASHU GOEL, CA DATE OF HEARING 24.02.2016 DATE OF PRONOUNCEMENT 29.02.2016 ORDER PER BENCH: THESE APPEALS BY THE REVENUE AND THE CROSS OBJECTIO NS BY THE ASSESSEE ARISE OUT OF THE ORDERS PASSED BY LD. CIT(A) IN REL ATION TO THE CAPTIONED ASSESSMENT YEARS. 2 2. ASSESSEE-RESPONDENTS WERE REPRESENTED BY SH. ASHU GOEL, CA. DURING THE COURSE OF HEARING, THE LD. CIT D.R., FAIRLY SUB MITTED THE FACT THAT THAT TAX EFFECT INVOLVED IN EACH OF THESE APPEALS WAS LESS T HAN RS.10,00,000/- AND THEREFORE THOSE APPEALS NEED TO BE WITHDRAWN IN VIE W OF THE CIRCULAR ISSUE BY THE CBDT, NEW DELHI. 3. AFTER CONSIDERING THE SUBMISSIONS OF LD. CIT D.R . IN ALL THE APPEALS BY THE REVENUE, LD. AR, AND THE MATERIAL ON RECORD, IT IS NOTICED THAT SECTION 268A HAS BEEN INSERTED BY THE FINANCE ACT, 2008 WIT H RETROSPECTIVE EFFECT FROM 01.04.1999, READING AS UNDER: 268A. (1) THE BOARD MAY, FROM TIME TO TIME, ISSUE ORDERS, INSTRUCTIONS OR DIRECTIONS TO OTHER INCOME-TAX AUTH ORITIES, FIXING SUCH MONETARY LIMITS AS IT MAY DEEM FIT, FOR THE PU RPOSE OF REGULATING FILING OF APPEAL OR APPLICATION FOR REFE RENCE BY ANY INCOME-TAX AUTHORITY UNDER THE PROVISIONS OF THIS C HAPTER. (2) WHERE, IN PURSUANCE OF THE ORDERS, INSTRUCTIONS OR DIRECTIONS ISSUED UNDER SUB-SECTION (1), AN INCOME-TAX AUTHORI TY HAS NOT FILED ANY APPEAL OR APPLICATION FOR REFERENCE ON AN Y ISSUE IN THE CASE OF AN ASSESSEE FOR ANY ASSESSMENT YEAR, IT SHA LL NOT PRECLUDE SUCH AUTHORITY FROM FILING AN APPEAL OR APPLICATION FOR REFERENCE ON THE SAME ISSUE IN THE CASE OF (A) THE SAME ASSESSEE FOR ANY OTHER ASSESSMENT YEAR ; OR (B) ANY OTHER ASSESSEE FOR THE SAME OR ANY OTHER AS SESSMENT YEAR. (3) NOTWITHSTANDING THAT NO APPEAL OR APPLICATION F OR REFERENCE HAS BEEN FILED BY AN INCOME-TAX AUTHORITY PURSUANT TO THE ORDERS OR INSTRUCTIONS OR DIRECTIONS ISSUED UNDER SUB-SECT ION (1), IT SHALL NOT BE LAWFUL FOR AN ASSESSEE, BEING A PARTY IN ANY APPEAL OR REFERENCE, TO CONTEND THAT THE INCOME-TAX AUTHORITY HAS ACQUIESCED IN THE DECISION ON THE DISPUTED ISSUE BY NOT FILING AN APPEAL OR APPLICATION FOR REFERENCE IN ANY CASE. (4) THE APPELLATE TRIBUNAL OR COURT, HEARING SUCH A PPEAL OR REFERENCE, SHALL HAVE REGARD TO THE ORDERS, INSTRUC TIONS OR DIRECTIONS ISSUED UNDER SUB-SECTION (1) AND THE CIR CUMSTANCES UNDER WHICH SUCH APPEAL OR APPLICATION FOR REFERENC E WAS FILED OR NOT FILED IN RESPECT OF ANY CASE. (5) EVERY ORDER, INSTRUCTION OR DIRECTION WHICH HAS BEEN ISSUED BY THE BOARD FIXING MONETARY LIMITS FOR FILING AN A PPEAL OR APPLICATION FOR REFERENCE SHALL BE DEEMED TO HAVE B EEN ISSUED UNDER SUB-SECTION (1) AND THE PROVISIONS OF SUB-SEC TIONS (2), (3) AND (4) SHALL APPLY ACCORDINGLY.] 3 4. PURSUANT TO THE MANDATE OF SECTION 268A, THE CBD T HAS ISSUED CIRCULAR NO. 21 OF 2015 DATED 10.12.2015, REVISING THE MONET ARY LIMIT TO RS.10,00,000/- FOR NOT FILING APPEALS BEFORE THE T RIBUNAL. THE SAID CIRCULAR READ AS UNDER: SUBJECT : REVISION OF MONETARY LIMITS FOR FI LING OF APPEALS BY THE DEPARTMENT BEFORE INCOME TAX APPELLATE TRIBUN AL AND HIGH COURTS AND SLP BEFORE SUPREME COURT MEASURES FOR REDUCING LITIGATION REG. REFERENCE IS INVITED TO BOARDS INSTRUCTION NO 5/20 14 DATED 10.07.2014 WHEREIN MONETARY LIMITS AND OTHER CONDIT IONS FOR FILING DEPARTMENTAL APPEALS (IN INCOME-TAX MATTERS) BEFORE APPELLATE TRIBUNAL AND HIGH COURTS AND SLP BEFORE THE SUPREME COURT WERE SPECIFIED. 2. IN SUPERSESSION OF THE ABOVE INSTRUCTION, IT HAS BEEN DECIDED BY THE BOARD THAT DEPARTMENTAL APPEALS MAY BE FILED ON MERITS BEFORE APPELLATE TRIBUNAL AND HIGH COURTS AND SLP BEFORE T HE SUPREME COURT KEEPING IN VIEW THE MONETARY LIMITS AND CONDI TIONS SPECIFIED BELOW. 3. HENCEFORTH, APPEALS/ SLPS SHALL NOT BE FILED IN CASES WHERE THE TAX EFFECT DOES NOT EXCEED THE MONETARY LIMITS GIVEN HEREUNDER: S. NO APPEALS IN INCOME -TAX MATTER 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/- 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 DECIDED ON MERITS OF THE CASE. 4. FOR THIS PURPOSE, TAX EFFECT MEANS THE DIFFERE NCE BETWEEN THE TAX ON THE TOTAL INCOME ASSESSED AND THE TAX TH AT WOULD HAVE BEEN CHARGEABLE HAD SUCH TOTAL INCOME BEEN REDUCED BY TH E AMOUNT OF INCOME IN RESPECT OF THE ISSUES AGAINST WHICH APPEA L IS INTENDED TO BE FILED (HEREINAFTER REFERRED TO AS DISPUTED ISSU ES). HOWEVER THE TAX WILL NOT INCLUDE ANY INTEREST THEREON, EXCEPT W HERE CHARGEABILITY OF INTEREST ITSELF IS IN DISPUTE. IN CASE THE CHARG EABILITY 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 NOTIONAL TAX ON DISPUTED A DDITIONS. IN CASE OF PENALTY ORDERS, THE TAX EFFECT WILL MEAN QUANTUM OF PENALTY DELETED OR REDUCED IN THE ORDER TO BE APPEALED AGAINST. 5. THE ASSESSING OFFICER SHALL CALCULATE THE TAX EF FECT SEPARATELY FOR EVERY ASSESSMENT YEAR IN RESPECT OF THE DISPUTE D ISSUES IN THE CASE OF EVERY ASSESSEE. IF, IN THE CASE OF AN ASSES SEE, THE DISPUTED ISSUES ARISE IN MORE THAN ONE ASSESSMENT YEAR, APPE AL, CAN BE FILED 4 IN RESPECT OF SUCH ASSESSMENT YEAR OR YEARS IN WHIC H THE TAX EFFECT IN RESPECT OF THE DISPUTED ISSUES EXCEEDS THE MONETARY LIMIT SPECIFIED IN PARA 3. NO APPEAL SHALL BE FILED IN RESPECT OF AN A SSESSMENT YEAR OR YEARS IN WHICH THE TAX EFFECT IS LESS THAN THE MONE TARY LIMIT SPECIFIED IN PARA 3. IN OTHER WORDS, HENCEFORTH, APPEALS CAN BE FILED ONLY WITH REFERENCE TO THE TAX EFFECT IN THE RELEVANT ASSESSM ENT YEAR. HOWEVER, IN CASE OF A COMPOSITE ORDER OF ANY HIGH COURT OR A PPELLATE AUTHORITY, WHICH INVOLVES MORE THAN ONE ASSESSMENT YEAR AND COMMON ISSUES IN MORE THAN ONE ASSESSMENT YEAR, APP EAL SHALL BE FILED IN RESPECT OF ALL SUCH ASSESSMENT YEARS EVEN IF THE TAX EFFECT IS 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 CASE WHER E A COMPOSITE ORDER/ JUDGEMENT INVOLVES MORE THAN ONE ASSESSEE, E ACH ASSESSEE SHALL BE DEALT WITH SEPARATELY. 6. IN A CASE WHERE APPEAL BEFORE A TRIBUNAL OR A CO URT IS NOT FILED ONLY ON ACCOUNT OF THE TAX EFFECT BEING LESS THAN THE MONETARY LIMIT SPECIFIED ABOVE, THE COMMISSIONER OF INCOME-T AX SHALL SPECIFICALLY RECORD THAT EVEN THOUGH THE DECISION IS NOT ACCEPTABLE, APPEAL IS NOT BEING FILED ONLY ON THE CONSIDERATION THAT THE TAX EFFECT IS LESS THAN THE MONETARY LIMIT SPECIFIED IN THIS I NSTRUCTION. FURTHER, IN SUCH CASES, THERE WILL BE NO PRESUMPTION THAT TH E INCOME-TAX DEPARTMENT HAS ACQUIESCED IN THE DECISION ON THE DI SPUTED ISSUES. THE INCOME-TAX DEPARTMENT SHALL NOT BE PRECLUDED FR OM FILING AN APPEAL AGAINST THE DISPUTED ISSUES IN THE CASE OF T HE SAME ASSESSEE FOR ANY OTHER ASSESSMENT YEAR, OR IN THE CASE OF AN Y OTHER ASSESSEE FOR THE SAME OR ANY OTHER ASSESSMENT YEAR, IF THE T AX EFFECT EXCEEDS THE SPECIFIED MONETARY LIMITS. 7. IN THE PAST, A NUMBER OF INSTANCES HAVE COME TO THE NOTICE OF THE BOARD, WHEREBY AN ASSESSEE HAS CLAIMED RELIEF F ROM THE TRIBUNAL OR THE COURT ONLY ON THE GROUND THAT THE DEPARTMENT HAS IMPLICITLY ACCEPTED THE DECISION OF THE TRIBUNAL OR COURT IN T HE CASE OF THE ASSESSEE FOR ANY OTHER ASSESSMENT YEAR OR IN THE CA SE OF ANY OTHER ASSESSEE FOR THE SAME OR ANY OTHER ASSESSMENT YEAR, BY NOT FILING AN APPEAL ON THE SAME DISPUTED ISSUES. THE DEPARTMENTA L REPRESENTATIVES/COUNSELS MUST MAKE EVERY EFFORT TO BRING TO THE NOTICE OF THE TRIBUNAL OR THE COURT THAT THE APPEAL IN SUCH CASES WAS NOT FILED OR NOT ADMITTED ONLY FOR THE REASON OF TH E TAX EFFECT BEING LESS THAN THE SPECIFIED MONETARY LIMIT AND, THEREFO RE, NO INFERENCE SHOULD BE DRAWN THAT THE DECISIONS RENDERED THEREIN WERE ACCEPTABLE TO THE DEPARTMENT. ACCORDINGLY, THEY SHOULD IMPRESS UPON THE TRIBUNAL OR THE COURT THAT SUCH CASES DO NOT HAVE A NY PRECEDENT VALUE. AS THE EVIDENCE OF NOT FILING APPEAL DUE TO THIS INSTRUCTION MAY HAVE TO BE PRODUCED IN COURTS, THE JUDICIAL FOL DERS IN THE OFFICE OF CIT MUST BE MAINTAINED IN A SYSTEMIC MANNER FOR EASY RETRIEVAL. 8. ADVERSE JUDGMENTS RELATING TO THE FOLLOWING ISSU ES SHOULD BE CONTESTED ON MERITS NOTWITHSTANDING THAT THE TAX EFFECT ENTAILED IS LESS THAN THE MONETARY LIMITS SPECIFIED IN PARA 3 A BOVE 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 BOARDS ORDER, NOTIFICATION, INSTRUCTION OR C IRCULAR HAS BEEN HELD TO BE ILLEGAL OR ULTRA VIRES, OR 5 (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 SH ALL NOT APPLY TO WRIT MATTERS AND DIRECT TAX MATTERS OTHER THAN I NCOME TAX. FILING OF APPEALS IN OTHER DIRECT TAX MATTERS SHALL CONTIN UE TO BE GOVERNED BY RELEVANT PROVISIONS OF STATUTE & RULES. FURTHER, FILING OF APPEAL IN CASES OF INCOME TAX, WHERE THE TAX EFFECT IS NOT QU ANTIFIABLE OR NOT INVOLVED, SUCH AS THE CASE OF REGISTRATION OF TRUST S OR INSTITUTIONS UNDER SECTION 12A OF THE IT ACT, 1961, SHALL NOT BE GOVERNED BY THE LIMITS SPECIFIED IN PARA 3 ABOVE AND DECISION TO F ILE APPEAL IN SUCH CASES MAY BE TAKEN ON MERITS OF A PARTICULAR CASE. 10. THIS INSTRUCTION WILL APPLY RETROSPECTIVELY TO PENDING APPEALS AND APPEALS TO BE FILED HENCEFORTH IN HIGH COURTS/ TRIBUNALS. PENDING APPEALS BELOW THE SPECIFIED TAX LIMITS IN PARA 3 ABOVE MAY BE WITHDRAWN/ NOT PRESSED. APPEALS BEFORE THE SUPREME COURT WILL BE GOVERNED BY THE INSTRUCTIONS ON THIS SUBJECT, OPERATIVE AT THE TIME WHEN SUCH APPEAL WAS FILED. 11. THIS ISSUES UNDER SECTION 268A (1) OF THE INCOM E-TAX ACT 1961. 5. FROM PARA 10 OF THE ABOVE CIRCULAR IT IS PALPABL E THAT THESE INSTRUCTIONS ARE APPLICABLE TO THE PENDING APPEALS ALSO AND THER E IS A CLEAR CUT INSTRUCTION TO THE DEPARTMENT TO WITHDRAW OR NOT PRESS SUCH APP EALS FILED BEFORE THE ITAT WHEREIN TAX EFFECT IS LESS THAN RS.10,00,000/- . THESE INSTRUCTIONS ARE OPERATIVE RETROSPECTIVELY TO THE PENDING APPEALS AL SO. 7. IT GOES WITHOUT SAYING THAT THE BOARDS INSTRUCT IONS OR DIRECTIONS ISSUED TO THE INCOME-TAX AUTHORITIES ARE BINDING ON THEM. GOING BY THE PRESCRIPTION OF THE AFORE NOTED CIRCULAR, WE AGREE WITH THE VIEW OF THE LD CIT DR THAT THE REVENUE SHOULD HAVE EITHER NOT FILED THE INSTANT AP PEALS BEFORE THE TRIBUNAL OR WITHDRAWN THE SAME AS THE TAX EFFECT IN EACH OF SUCH APPEALS IS LESS THAN THE PRESCRIBED LIMIT FOR NOT FILING THE APPEALS. 8. KEEPING IN VIEW THE ABOVE CIRCULAR AND THE PROVI SIONS OF SECTION 268A OF INCOME-TAX ACT, 1961, AND WITHOUT GOING INTO MER ITS OF THE CASES, WE DISMISS THE INSTANT APPEALS FILED BY THE REVENUE AS TAX EFFECT IN EACH OF THESE APPEALS IS LESS THAN RS.10.00 LAC. HOWEVER, THE DEP ARTMENT IS AT LIBERTY TO FILE 6 THE MISC. APPLICATION, IF THE TAX EFFECT IS MORE TH AN THE PRESCRIBED LIMITED OF RS. 10 LACS OR OTHERWISE. THE CROSS OBJECTIONS FIL ED BY THE ASSESSEE, WHICH ARE IN SUPPORT OF THE RESPECTIVE IMPUGNED ORDERS, A RE ALSO DISMISSED AS INFRUCTUOUS. 9. IN THE RESULT, ALL APPEALS OF THE REVENUE AND CR OSS OBJECTIONS OF THE ASSESSEES STAND DISMISSED. THE DECISION IS PRONOUNCED IN THE OPEN COURT ON 29 TH FEBRUARY, 2016. SD/- SD/- (DIVA SINGH) (O.P. KANT) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 29 TH FEBRUARY, 2016. RK/- COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ASST. REGISTRAR, ITAT, NEW DELHI 7 SL. NO. PARTICULARS DATE 1. DATE OF DICTATION (HAND WRITTEN ) 26.02.2016 2. DATE ON WHICH THE DRAFT IS PLACED BEFORE THE DICTATING MEMBER 26.02.2016 3. DRAFT PLACED BEFORE THE OTHER MEMBER 4. APPROVED DRAFT COMES TO THE SR. PS/PS 5. KEPT FOR PRONOUNCEMENT ON 6. FINAL ORDER RECEIVED AFTER PRONOUNCEMENT 7. FILE SENT TO THE BENCH CLERK 8. DATE ON WHICH FILES GOES TO THE HEAD CLERK 9. DATE ON WHICH FILE GOES TO THE ASSISTANT REGISTRAR 10. DATE OF DISPATCH OF ORDER