Nangalia Hydrocarbon Ltd., Kolkata V. DCIT, Central Circle - XVIII, Kolkata, Kolkata

CO 21/KOL/2011

• Counselvise Citation: [2011] 122 COUNSELVISE.COM (IT) 5992 (ITAT-KOLKATA)
• Duration Of Justice: 1 month(s) 8 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 05-05-2011
• Appeal Filed By: Assessee
• Bench Allotted: B
• Assessment Year: 2005-2006
• Appeal Filed On: 28-03-2011
• Court: TRIBUNAL
• Department Lawyers: BONANI GHOSH
• Assessee Lawyers: A K TIBREWAL
• Keywords: Tax effect
• Section: 14A

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL, BEN CH B, KOLKATA () BEFORE . .. . , , , , , SHRI B.R.MITTAL, JUDICIAL MEMBER. /AND ! ' ! ' ! ' ! ' , #$ SHRI AKBER BASHA, ACCOUNTANT MEMBER % % % % / IT(SS)A NOS . 8 & 9/KOL/2011 &' ()/ ASSESSMENT YEARS : 2005-06 & 2007-08 (+, / APPELLANT ) D.C.I.T., CENTRAL CIRCLE-XVIII, KOLKATA - & - - VERSUS - . (./+,/ RESPONDENT ) NANGALIA HYDROCARBON LTD., KOLKATA (PAN: AAACN 9534 B) 0 1 0 1 0 1 0 1 /C.O.NO.21/KOL/2011 % % % % / A/O IT(SS)A NO . 8 /KOL/2011 &' ()/ ASSESSMENT YEAR : 2005-06 (+, / APPELLANT ) NANGALIA HYDROCARBON LTD., KOLKATA (PAN: AAACN 9534 B) - & - - VERSUS - . (./+,/ RESPONDENT ) D.C.I.T., CENTRAL CIRCLE- XVIII, KOLKATA +, 2 3 #/ FOR THE DEPARTMENT : SMT.BONANI GHOSH ./+, 2 3 #/ FOR THE ASSESSEE: SHRI A.K.TIBREWAL #' / ORDER 4 4 4 45 55 5 PER BENCH THE APPEALS FILED BY THE REVENUE ARE AGAINST THE OR DER DATED 30.11.2010 AND 26.11.2010 RESPECTIVELY, OF THE CIT (A)-CENTRAL-II, KOLKATA PERTAINING TO THE ASSESSMENT YEARS 2005-06 AND 2007-08 AND THE CROSS OBJECTION FILED BY THE ASSESSEE 2 IS AGAINST THE ORDER OF THE CIT [A]-CENTRAL-II, KOL KATA, PERTAINING TO THE ASSESSMENT YEAR 2005-06. FOR THE SAKE OF CONVENIENCE ALL THE APPEALS ARE DISPOSED OF TOGETHER BY A CONSOLIDATED ORDER. 2. IN THIS APPEAL, THE REVENUE HAS TAKEN, IN BOTH THE APPEALS, SIMILAR AND IDENTICAL GROUNDS RELATING TO THE ESTIMATION OF EXPENDITURE U NDER SECTION 14A OF THE ACT READ WITH RULE 8D IN THE ASSESSMENT COMPLETED UNDER SECT ION 153A/143[3] OF THE ACT. 3. AT THE TIME OF HEARING THE LEARNED AUTHORIZED REPRESENTATIVE APPEARING ON BEHALF OF THE ASSESSEE SUBMITTED THAT IN BOTH TH E APPEALS, THE TAX EFFECT IS BELOW RS.2 LAKHS. THEREFORE, AS PER THE INSTRUCTION OF CB DT CIRCULAR THE REVENUE IS BARRED FROM FILING OF THE APPEALS BEFORE THIS TRIBUNAL. 4. THE LEARNED DEPARTMENTAL REPRESENTATIVE APPEAR ING ON BEHALF OF THE REVENUE DID NOT RAISE ANY SERIOUS OBJECTION TO THE CONTENTION OF THE LEARNED AUTHORIZED REPRESENTATIVE OF THE ASSESSEE. 5. AFTER HEARING THE RIVAL SUBMISSIONS AND ON CARE FUL PERUSAL OF THE ASSESSMENT ORDER, IT IS OBSERVED THAT THE TAX EFFEC T IN THESE TWO APPEALS IS BELOW RS.2 LAKHS. 6. ADMITTEDLY THE TAX PAYABLE IN RESPECT OF GROUND S OF APPEAL BY THE DEPARTMENT IS LESS THAN RS.2 LAKHS AND THE REVISED INSTRUCTION OF THE CBDT NO. 5/2008 DATED 15.05.2008 IS VERY MUCH APPLICABLE AND THEREFORE, IN OUR CONSIDERED OPINION, THE REVENUE SHOULD HAVE REFRAINED FROM FIL ING SECOND APPEALS BEFORE THE TRIBUNAL. IT WOULD BE APT TO QUOTE THE OBSERVATION OF THE DELHI HIGH COURT IN THE CASE OF CIT VS.- ITAT 232 ITR 207 AT PAGE 216 AS BELOW :- THE CENTRAL BOARD OF DIRECT TAXES INSTRUCTIONS ARE BINDING ON THE DEPARTMENT. IF THE CASE AT HAND IS C OVERED BY A POLICY LAID DOWN BY THE CENTRAL BOARD OF DIREC T TAXES IN THAT CASE NO FAULT CAN BE FOUND WITH THE ORDER O F THE TRIBUNAL REFUSING TO STATE THE CASE AND THERE IS NO REASON 3 WHY THE HIGH COURT SHOULD INTERFERE WITH SUCH DISCR ETION OF THE TRIBUNAL AS HAS BEEN EXERCISED CONSISTENTLY WIT H THE UNIFORM POLICY LAID DOWN BY THE CENTRAL BOARD OF DI RECT TAXES WHICH BINDS ALL THE SUBORDINATE AUTHORITIES O F THE INCOME TAX DEPARTMENT. THE HIGH COURT WOULD NOT ORDINARILY ENCOURAGE BREACH OF POLICY DECISIONS AND THE DEPARTMENTAL INSTRUCTIONS WHICH HAVE A PUBLIC PURPO SE BEHIND THEM. VALUABLE TIME OF HIGH COURTS AND HIGHL Y PLACED TRIBUNALS IS NOT TO BE WASTED ON PETTY MATTE RS. 6.1. WE FURTHER FIND THAT IT IS A SETTLED LAW THAT THE CIRCULARS ISSUED BY CBDT ARE BINDING ON THE REVENUE. THIS POSITION WAS CONFI RMED BY THE APEX COURT IN THE CASE OF COMMISSIONER OF CUSTOMS VS. INDIAN OIL CORP ORATION LTD., REPORTED IN 267 ITR 272 WHEREIN THEIR LORDSHIPS EXAMINED THE EARLIE R DECISIONS OF THE APEX COURT WITH REGARD TO BINDING NATURE OF THE CIRCULAR AND L AID DOWN THAT WHEN A CIRCULAR ISSUED BY THE BOARD REMAINS IN OPERATION THEN THE REVENUE IS BOUND BY IT AND CANNOT BE ALLOWED TO PLEAD THAT IT IS NOT VALID OR THAT IT IS CONTRARY TO THE TERMS OF THE STATUTE. THE APPEALS UNDER CONSIDERATION HAVE CERTAINLY BEEN FIL ED CONTRARY TO THE CIRCULAR ISSUED BY THE CBDT INSTRUCTION NO.5 OF 2008 DATED 15.5.200 8. 6.2. IN VIEW OF THE ABOVE, WE HOLD THAT BOTH THE A PPEALS FILED BY THE DEPARTMENT, AGAINST THE IMPUGNED ORDER OF THE CIT ( A), ARE CONTRARY TO THE POLICY DECISION OF THE DEPARTMENT AND AS SUCH THE APPEALS FILED BY THE DEPARTMENT ARE DISMISSED IN LIMINE . 7. AT THE TIME OF HEARING, THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT HE IS WITHDRAWING THE CROSS OBJECTION FILED BY THE ASSESSEE AND HENCE, THE SAME IS DISMISSED AS WITHDRAWN. 4 8. IN THE RESULT, THE APPEALS FILED BY THE REVENUE ARE DISMISSED AND THE CROSS OBJECTION FILED BY THE ASSESSEE IS DISMISSED AS WITHDRAWN. ORDER PRONOUNCED IN THE OPEN COURT ON 05.05.2011. SD/- SD/- . .. . . .. . , , , , B.R.MITTAL, JUDICIAL MEMBER ! ' ! ' ! ' ! ', ,, , #$ #$ #$ #$ , AKBER BASHA, ACCOUNTANT MEMBER. ( (( (6$ 6$ 6$ 6$) )) ) DATE: 05.05.2011. #' 2 .1 7#1(8- COPY OF THE ORDER FORWARDED TO: 1. M/S. NANGALIA HYDROCARBON LTD., 7C, KIRAN SHANKAR R OY ROAD, KOLKATA- 700001. 2 THE DCIT, CENTRAL CIRCLE-XVIII, KOLKATA 3. THE CIT, 4. THE CIT(A)-CENTRAL-II, KOLKATA 5. DR, KOLKATA BENCHES, KOLKATA /1 ./ TRUE COPY, #'&=/ BY ORDER, DEPUTY /ASST. REGISTRAR , ITAT, KOLKATA BENCHES R.G.(.P.S.)