Brij Basant Hospitals Pvt.Ltd., Ahmedabad V. The Dy.CIT.,Cent.Circle-2(3), Ahmedabad

CO 214/AHD/2011

• Counselvise Citation: [2015] 123 COUNSELVISE.COM (IT) 1577 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 2 month(s) 4 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 22-12-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 22-12-2015
• Assessment Year: 2005-2006
• Appeal Filed On: 18-10-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: MEHUL K PATEL; CROSS OBJECT
• Assessee Lawyers: DINESH SINGH
• Keywords: Audit objection; Tax effect

Judgement Text

IT(SS)A NO 494 AND 495 /AHD/ 2011 CO 214/AHD/11 ASSESSMENT YEARS 2004 - 05 AND 2005 - 06 PAGE 1 OF 5 IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD A BENCH, AHMEDABAD [CORAM: PRAMOD KUMAR AM AND RAJPAL YADAV JM] IT(SS)A NOS 494 AND 495/AHD/11 ASSESSMENT YEARS 2004 - 05 AND 2005 - 06 DY. COMMISSIONER OF INCOME TAX ....... .. . .....APPELLANT CE NTRAL CIRCLE 2(3) , AHMEDABAD. VS. BRIJ HOSPITAL PVT LTD .... .................. .... .. RESPONDENT 23, HATKESH SOCIETY, DAROAN SIX ROAD AHMEDABAD [PAN: AABCB7677A ] CO NO. 214/AHD/2011 ARISING OUT OF IT(SS)A NO. 495/AHD/11 ASSESSMENT YEARS AND 2005 - 06 BRIJ HOSPITAL PVT LTD ....... .. ..CROSS - OBJECTOR 23, HATKESH SOCIETY, DAROAN SIX ROAD AHMEDABAD [PAN: AABCB7677A ] . VS. DY. COMMISSIONER OF INCOME TAX .... .................. .... .. RESPONDENT CENTRAL CIRCLE 2(3), AHMEDABAD APPEARANCES BY: DI NESH SINGH FOR THE APPELLANT MEHUL K PATEL FOR THE RESPONDENT AND CROSS OBJECTOR DATE OF CONCLUDING THE HEARING : DECEMBER 22, 2015 DATE OF PRONOUNCING THE ORDER : DECEMBER 22, 2015 O R D E R PER PRAMOD KUMAR AM: 1. THESE TWO APPEALS AND ONE CROSS OBJEC TION PERTAIN TO THE SAME ASSESSEE AND WERE HEARD TOGETHER. AS A MATTER OF CONVENIENCE, THEREFORE, THE APPEALS AND THE CROSS OBJECTION ARE BEING DISPOSED OF BY WAY OF THIS CONSOLIDATED ORDER. IT(SS)A NO 494 AND 495 /AHD/ 2011 CO 214/AHD/11 ASSESSMENT YEARS 2004 - 05 AND 2005 - 06 PAGE 2 OF 5 2. AS FAR AS THE APPEALS ARE CONCERNED, BOTH THESE APPEALS ARE F ILED BY THE ASSESSING OFFICER AND THE TAX EFFECT INVOLVED IN EACH OF THE APPEAL IS WELL BELOW RS 10 LAKHS. IN THE ASSESSMENT YEAR 2004 - 05, THE IMPUGNED ADDITION, AGAINST DELETION OF WHICH THE ASSESSING OFFICER IS IN APPEAL BEFORE US, IS OF RS 9,72,238. IN THE ASSESSMENT YEAR 2005 - 06, THE IMPUGNED DISALLOWANCE, AGAINST DELETION OF WHICH THE ASSESSING OFFICER IS IN APPEAL BEFORE US, IS OF RS 11,96, - 10. THE TAX EFFECT OF THESE DEPARTMENTAL APPEAL S IS INDIVIDUALLY THUS WELL BELOW RS 10 LAKHS AND THE ORDERS P ASSED BY THE CIT(A) ARE NOT A COMPOSITE ORDER - IN FACT, THESE ARE TWO SEPARATE ORDERS PASSED ON 2 ND JUNE 2011 AND 31 ST MAY 2011. 3 . IT IS IN THIS LIGHT THAT WE NEED TO TAKE NOTE OF A RECENT DEVELOPMENT WITH RESPECT TO CBDT INSTRUCTIONS ON THE PENDING DEPA RTMENTAL APPEALS BEFORE THE ITAT IN WHICH TAX EFFECT IS LESS THAN RS 10 LAKHS. T HE CENTRAL BOARD OF DIRECT TAXE HAS, VIDE CIRCULAR NO. 21/ 2015 DATED 10 TH DECEMBER 2015, INTER ALIA, ANNOUNCED THAT, SUBJECT TO CERTAIN EXCEPTIONS - WHICH ARE NOT RELEVANT IN THE PRESENT CONTEXT, HENCEFORTH, NO DEPARTMENTAL APPEALS WILL BE FILED AGAINST RELIEF GIVEN BY THE CIT(A), BEFORE THIS TRIBUNAL, UNLESS THE TAX EFFECT, EXCLUDING INTEREST, EXCEEDS RS 10,00,000. WHAT IS EVEN MORE IMPORTANT IS THAT NOT ONLY THAT SUCH A TAXP AYER FRIENDLY MEASURE WILL BE IMPLEMENTED IN ALL FUTURE TAX LITIGATION, EVEN THE PENDING APPEALS, WHEREVER THE TAX INVOLVED IN THE APPEALS DOES NOT EXCEED RS 10,00,000, SHALL NOT BE PRESSED OR WITHDRAWN. IN EFFECT THUS, IRRESPECTIVE OF THE YEAR TO WHICH T HE DEPARTMENTAL APPEAL BEFORE THE TRIBUNAL PERTAINS, AS LONG AS SUCH AN APPEAL IS PENDING BEFORE THE TRIBUNAL, THIS WILL BE A LEGAL NULLITY. THE RELEVANT EXTRACTS OF THE AFORESAID CIRCULAR ARE AS FOLLOWS: 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 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/ - IT(SS)A NO 494 AND 495 /AHD/ 2011 CO 214/AHD/11 ASSESSMENT YEARS 2004 - 05 AND 2005 - 06 PAGE 3 OF 5 IT IS CLARIFIED THAT AN APPEAL SHOULD NOT BE FILED MERELY BECAUSE THE TAX EFFECT IN A CASE EXCEEDS THE MONETARY LIMITS PRESCRIBED ABOVE. FILING OF APPEAL IN SUCH CASES IS TO BE DECIDED ON MERITS OF THE CASE. 4. FOR THIS PURPOSE, TAX EFFECT M EANS THE DIFFERENCE BETWEEN THE TAX ON THE TOTAL INCOME ASSESSED AND THE TAX THAT WOULD HAVE BEEN CHARGEABLE HAD SUCH TOTAL INCOME BEEN REDUCED BY THE AMOUNT OF INCOME IN RESPECT OF THE ISSUES AGAINST WHICH APPEAL IS INTENDED TO BE FILED (HEREINAFTER REFER RED TO AS DISPUTED ISSUES ). HOWEVER THE TAX WILL NOT INCLUDE ANY INTEREST THEREON, EXCEPT WHERE CHARGEABILITY OF INTEREST ITSELF IS IN DISPUTE. IN CASE THE CHARGEABILITY OF INTEREST IS THE ISSUE UNDER DISPUTE, THE AMOUNT OF INTEREST SHALL BE THE TAX EFFE CT. IN CASES WHERE RETURNED LOSS IS REDUCED OR ASSESSED AS INCOME, THE TAX EFFECT WOULD INCLUDE NOTIONAL TAX ON DISPUTED ADDITIONS. IN CASE OF PENALTY ORDERS, THE TAX EFFECT WILL MEAN QUANTUM OF PENALTY DELETED OR REDUCED IN THE ORDER TO BE APPEALED AGAINS T. 5. THE ASSESSING OFFICER SHALL CALCULATE THE TAX EFFECT SEPARATELY FOR EVERY ASSESSMENT YEAR IN RESPECT OF THE DISPUTED ISSUES IN THE CASE OF EVERY ASSESSEE. LF, IN THE CASE OF AN ASSESSEE, THE DISPUTED ISSUES ARISE IN MORE THAN ONE ASSESSMENT YEAR, APP EAL, 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 SPECIFIED IN PARA 3. NO APPEAL SHALL BE FILED IN RESPECT OF AN ASSESSMENT YEAR OR YEARS IN WHICH THE TAX EFFE CT IS LESS THAN THE MONETARY LIMIT SPECIFIED IN PARA 3. IN OTHER WORDS, HENCEFORTH, APPEALS CAN BE FILED ONLY WITH REFERENCE TO THE TAX EFFECT IN THE RELEVANT ASSESSMENT YEAR. HOWEVER, IN CASE OF A 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 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 WHERE A COMPOSITE ORDER/ JUDGEMENT INVOLVES MORE THAN ONE ASSESSEE, EACH ASSESSEE SHALL BE DEALT WITH SEPARATELY. 4 . SO FAR AS RETROSP ECTIVE OPERATION OF THIS MEASURE IS CONCERNED, THE RELEVANT PORTION OF THE CBDT CIRCULAR IS AS FOLLOWS: 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........ 5 . HAVING NOTED THAT THE ABOVE, IT IS ALSO IMPORTANT TO NOTE SUCH A DISMISSAL OF APPEAL SHALL NOT ACT TO THE PREJUDICE OF THE REVENUE AUTHORITIES TO RAISE THE SAME ISSUE, IN TH E CASE OF THE RELEVANT ASSESSEE OR ANY OTHER ASSESSEE, AS AND WHEN THE TAX EFFECT INVOLVED IN SUCH IT(SS)A NO 494 AND 495 /AHD/ 2011 CO 214/AHD/11 ASSESSMENT YEARS 2004 - 05 AND 2005 - 06 PAGE 4 OF 5 LITIGATION CROSSES THE THRESHOLD LIMIT FOR THAT ASSESSMENT YEAR. THE RELEVANT PARAGRAPHS OF THE CBDT CIRCULAR, FOR READY REFERENCE, ARE AS FOLLOWS: 6. IN A C ASE WHERE APPEAL BEFORE A TRIBUNAL OR A COURT IS NOT FILED ONLY ON ACCOUNT OF THE TAX EFFECT BEING LESS THAN THE MONETARY LIMIT SPECIFIED ABOVE, THE COMMISSIONER OF INCOME - TAX SHALL SPECIFICALLY RECORD THAT EVEN THOUGH THE DECISION IS NOT ACCEPTABLE, APPE AL IS NOT BEING FILED ONLY ON THE CONSIDERATION THAT THE TAX EFFECT IS LESS THAN THE MONETARY LIMIT SPECIFIED IN THIS INSTRUCTION . FURTHER, IN SUCH CASES, THERE WILL BE NO PRESUMPTION THAT THE INCOME - TAX DEPARTMENT HAS ACQUIESCED IN THE DECISION ON THE DI SPUTED ISSUES. THE INCOME - TAX DEPARTMENT SHALL NOT BE PRECLUDED FROM FILING AN APPEAL AGAINST THE DISPUTED ISSUES IN THE CASE OF THE SAME ASSESSEE FOR ANY OTHER ASSESSMENT YEAR, OR IN THE CASE OF ANY OTHER ASSESSEE FOR THE SAME OR ANY OTHER ASSESSMENT YEAR , IF THE TAX 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 FROM THE TRIBUNAL OR THE COURT ONLY ON THE GROUND THAT THE DEPARTMENT HAS IMPLICIT LY ACCEPTED THE DECISION OF THE TRIBUNAL OR COURT IN THE CASE OF THE ASSESSEE FOR ANY OTHER ASSESSMENT YEAR OR IN THE CASE 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 THE TAX EFFECT BEING LESS THAN THE SPECIFIED MONETARY LIMIT AND, THEREF ORE, 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 ANY PRECEDENT VALUE. AS THE EVIDENCE OF NOT FILING APPEAL D UE TO THIS INSTRUCTION MAY HAVE TO BE PRODUCED IN COURTS, THE JUDICIAL FOLDERS IN THE OFFICE OF CSIT MUST BE MAINTAINED IN A SYSTEMIC MANNER FOR EASY RETRIEVAL 6 . WE MAY FURTHER NOTE THAT THE EXCEPTIONS TO THE CASES COVERED BY THE AFORESAID CIRCULAR ARE SE T OUT IN PARAGRAPH 8 OF THE CIRCULAR AS FOLLOWS; 8. ADVERSE JUDGMENTS RELATING TO THE FOLLOWING ISSUES SHOULD BE CONTESTED ON MERITS NOTWITHSTANDING THAT THE TAX EFFECT ENTAILED IS LESS THAN THE MONETARY LIMITS SPECIFIED 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 IT(SS)A NO 494 AND 495 /AHD/ 2011 CO 214/AHD/11 ASSESSMENT YEARS 2004 - 05 AND 2005 - 06 PAGE 5 OF 5 (D) WHERE THE ADDITION RELATES TO UNDISCLOSED FOREIGN ASSETS/ BANK ACCOUNTS. 7 . IN VIEW OF THE ABOVE CBDT CIRCULAR, WHICH IS BINDING ON ALL THE FIELD OFFICERS INCLUDING THE APPELLANT BEFORE US, THE APPE AL BEFORE US IS LIABLE TO BE DISMISSED AS WITHDRAWN. 8 . THIS DISMISSAL IS, HOWEVER, SUBJECT TO THE CONDITION THAT IN THE EVENT OF THE APPELLANT BEING ABLE TO SHOW US THAT THE APPEAL BEFORE US IS NOT COVERED BY THE AFORESAID CIRCULAR, OR IS COVERED BY THE EXCEPTIONS SET OUT IN THE SAID CIRCULAR, THE APPELLANT WILL HAVE THE LIBERTY TO MOVE AN APPROPRIATE PETITION TO THIS TRIBUNAL FOR RECALLING THIS ORDER. 9 . AS THE APPEAL IS DISMISSED AS WITHDRAWN, FOR THE REASONS SET OUT ABOVE, THERE IS NO OCCASION TO D EAL WITH THE MATTER ON MERITS . THAT ASPECT OF THE MATTER, GIVEN OUR ABOVE DECISION, IS PURELY ACADEMIC. 10. AS FOR THE CROSS OBJECTION FILED BY THE ASSESSEE, LEARNED COUNSEL STATED AT THE BAR THAT HE DOES NOT WISH TO PURSUE THE SAME. IT IS ALSO, THEREFORE , DISMISSED AS WITHDRAWN. 11 . IN THE RESULT, BOTH THE APPEALS AND THE CROSS OBJECTION ARE DISMISSED. PRONOUNCED IN THE OPEN COURT TODAY ON THE 22 ND DAY OF DECEMBER, 2015. SD/ - SD/ - RAJPAL YADAV PRAMOD KUMAR (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) AHMEDABAD , THE 22 ND DAY OF DECEMBER , 201 5 COPIES TO: (1) THE APPELLANT (2) THE RESPONDENT (3) COMMISSIONER (4) CIT(A) (5) DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCHES, AHMEDABAD