KEVIN TEXTILES INDUSTRIES, MUMBAI V. ITO 14(3)(2), MUMBAI

CO 57/MUM/2015

• Counselvise Citation: [2016] 112 COUNSELVISE.COM (IT) 4338 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 4 month(s) 18 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 24-08-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2002-2003
• Appeal Filed On: 06-04-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: A RAMACHANDRAN
• Assessee Lawyers: NIKITA AGARWAL
• Keywords: Audit objection; Tax effect
• Section: 12A; 268A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH A, MUMBAI BEFORE SHRI B.R. BASKARAN, ACCOUNTANT MEMBER AND SHRI SANJAY GARG, JUDICIAL MEMBER ITA NOS.712 & 713/M/2014 ASSESSMENT YEARS: 2002-03 & 2003-04 INCOME TAX OFFICER-14(3)-2, 6 TH FLOOR, EARNEST HOUSE, NARIMAN POINT, MUMBAI - 400021 VS. M/S. KEVIN TEXTILES INDUSTRIES, 416, GAUMUKH GALLI, M.J. MARKET, MUMBAI 400 002 PAN: AAAFK2410Q (APPELLANT) (RESPONDENT) CO NOS.57 & 58/M/2015 (ITA NOS.712 & 713/M/2015) ASSESSMENT YEARS: 2002-03 & 2003-04 M/S. KEVIN TEXTILES INDUSTRIES, 416, GAUMUKH GALLI, M.J. MARKET, MUMBAI 400 002 PAN: AAAFK2410Q VS. INCOME TAX OFFICER-14(3)-2, 6 TH FLOOR, EARNEST HOUSE, NARIMAN POINT, MUMBAI - 400021 (APPELLANT) (RESPONDENT) ITA NO.716/M/2014 ASSESSMENT YEAR: 2005-06 INCOME TAX OFFICER-14(3)-2, 6 TH FLOOR, EARNEST HOUSE, NARIMAN POINT, MUMBAI - 400021 VS. M/S. KIRON & CO., CHANDRA CHOWK, 521, 5 TH LANE, M.J. MARKET, MUMBAI 400 002 PAN: AAAFK 6707E (APPELLANT) (RESPONDENT) PRESENT FOR: ASSESSEE BY : MS. NIKITA AGARWAL, A.R. & MS. DINK LE HARIYA, A.R. REVENUE BY : SHRI A. RAMACHANDRAN, D.R. DATE OF HEARING : 24.08.2016 DATE OF PRONOUNCEMENT : 24.08.2016 O R D E R PER SANJAY GARG, JUDICIAL MEMBER: THE PRESENT IS A BUNCH OF APPEALS BY THE REVENUE A ND CORRESPONDING CROSS OBJECTIONS BY THE ASSESSEES. ITA NOS.712 & 713/M/2014, CO NOS.57 & 58/M/2015 & ITA NO.716/M/2014 M/S. KEVIN TEXTILES INDUSTRIES & M/S. KIRON & CO. 2 2. THE LD. D.R., AT THE OUTSET, HAS STATED THAT THE TAX EFFECT IN THE APPEALS OF THE REVENUE IS LESS THAN RS.10 LAKHS AND THE CBDT C IRCULAR NO.21/2015 IS APPLICABLE TO THESE APPEALS AND THE APPEALS ARE NOT MAINTAINABLE/NOT PRESSED IN TERMS OF THE SAID CBDT CIRCULAR NO.21/2015 DATED 10 /12/2015. 3. THE CBDT VIDE CIRCULAR DATED 10/12/2015 (SUPRA) HAS REVISED THE MONETARY LIMITS FOR FILING OF APPEALS BY THE DEPART MENT BEFORE THE TRIBUNAL WHEREBY IT HAS BEEN PROVIDED THAT NO APPEAL SHALL B E FILED BY THE REVENUE IN RESPECT OF AN ASSESSMENT YEAR OR YEARS IN WHICH THE TAX EFFECT IS LESS THAN THE MONETARY LIMIT SPECIFIED IN PARA 3 OF THE SAID CIRC ULAR AND FURTHER VIDE PARA 10 OF THE SAID CIRCULAR IT HAS BEEN CLARIFIED THAT SAI D CIRCULAR IS APPLICABLE RETROSPECTIVELY TO THE PENDING APPEALS ALSO AND THA T PENDING APPEALS BELOW THE SPECIFIED TAX LIMITS MAY BE WITHDRAWN/NOT PRESSED. THE RELEVANT PORTION OF THE CIRCULAR DATED 10/12/2015 (SUPRA) IS REPRODUCED BEL OW:- 3.HENCEFORTH APPEALS/SLPS SHALL NOT BE FILED IN CAS ES WHERE THE TAX EFFECT DOES NOT EXCEED THE MONETARY LIMITS GIVEN HEREUNDER:- SL. NO. APPEALS IN INCOME-TAX MATTERS MONETARY LIMI TS (IN RS.) 1. BEFORE APPELLATE TRIBUNAL 10,00,000 2. BEFORE HIGH COURT 20,00,000 3. BEFORE SUPREME COURT 25,00,000 ................................................. ................................................... ...................... 4. FOR THIS PURPOSE, 'TAX EFFECT' MEANS THE DIFFERE NCE BETWEEN THE TAX ON THE TOTAL INCOME ASSESSED AND THE TAX THAT WOULD HAVE B EEN CHARGEABLE HAD SUCH TOTAL INCOME BEEN REDUCED BY THE AMOUNT OF INCOME I N RESPECT OF THE ISSUES AGAINST WHICH APPEAL IS INTENDED TO BE FILED (HEREI NAFTER REFERRED TO AS 'DISPUTED ISSUES'). HOWEVER THE TAX WILL NOT INCLUD E ANY INTEREST THEREON, EXCEPT WHERE CHARGEABILITY OF INTEREST ITSELF IS IN DISP UTE. IN CASE THE CHARGEABILITY OF INTEREST IS THE ISSUE UNDER DISPUTE, THE AMOUNT OF INTEREST SHALL BE THE TAX EFFECT. IN CASES WHERE RETURNED LOSS IS REDUCED OR ASSESSED AS INCOME, THE TAX EFFECT WOULD INCLUDE NOTIONAL TAX ON DISPUTED ADDITIONS. I N CASE OF PENALTY ORDERS, THE TAX EFFECT WILL MEAN QUANTUM OF PENALTY DELETED OR REDUCED IN THE ORDER TO BE APPEALED AGAINST. ITA NOS.712 & 713/M/2014, CO NOS.57 & 58/M/2015 & ITA NO.716/M/2014 M/S. KEVIN TEXTILES INDUSTRIES & M/S. KIRON & CO. 3 8. ADVERSE JUDGMENTS RELATING TO THE FOLLOWING ISS UES 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 C IRCULAR 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 S HALL NOT APPLY TO WRIT MATTERS AND DIRECT TAX MATTERS OTHER THAN INCOME TA X. FILING OF APPEALS IN OTHER DIRECT TAX MATTERS SHALL CONTINUE TO BE GOVER NED BY RELEVANT PROVISIONS OF STATUTE & RULES. FURTHER, FILING OF APPEAL IN CA SES OF INCOME TAX, WHERE THE TAX EFFECT IS NOT QUANTIFIABLE OR NOT INVOLVED, SUC H AS THE CASE OF REGISTRATION OF TRUSTS OR INSTITUTIONS UNDER SECTION 12A OF THE IT ACT, 1961, SHALL NOT BE GOVERNED BY THE LIMITS SPECIFIED IN PARA 3 ABOVE AN D DECISION TO FILE APPEAL IN SUCH CASES MAY BE TAKEN ON MERITS OF A PARTICULAR C ASE. 10. THIS INSTRUCTION WILL APPLY RETROSPECTIVELY TO PENDING APPEALS AND APPEALS TO BE FILED HENCEFORTH IN HIGH COURTS/ TRIB UNALS. PENDING APPEALS BELOW THE SPECIFIED TAX LIMITS IN PARA 3 ABOVE MAY BE WITHDRAWAL 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. (UNDERLINED FOR EMPHASIS BY US) 4. THE TAX EFFECT IN DISPUTE IN THE CAPTIONED APPEA LS IS STATED TO BE BELOW THE MONETARY LIMIT OF RS.10.00 LACS AS SPECIFIED IN THE CBDT CIRCULAR DATED 10/12/2015 (SUPRA). THE LD. D.R. HAS NOT BROUGHT O UT ANY MATERIAL TO SUGGEST THAT ANY OF THE CAPTIONED APPEAL IS PROTECTED BY AN Y OF THE CIRCUMSTANCES PRESCRIBED IN PARA-8 OF THE CIRCULAR DATED 10/12/20 15 (SUPRA). HE, THEREFORE, HAS STATED THAT IN VIEW OF THE ABOVE CIRCULAR OF TH E CBDT, THE CAPTIONED APPEALS BE TREATED AS WITHDRAWN/NOT PRESSED. HENCE , WITHOUT GOING INTO THE MERIT OF THE ISSUES RAISED IN THE PRESENT APPEALS, THESE APPEALS ARE TREATED AS DISMISSED AS WITHDRAWN/NOT PRESSED AS THESE BEING F ILED IN CONTRAVENTION OF THE CBDT CIRCULAR DATED 10/12/2015(SUPRA) READ WITH SEC TION 268A OF THE INCOME TAX ACT. HOWEVER, THE REVENUE WILL BE AT LIBERTY T O FILE AN APPLICATION FOR RECALL OF ANY OF THESE APPEALS IN ACCORDANCE WITH L AW, IF AT ANY STAGE IT IS FOUND ITA NOS.712 & 713/M/2014, CO NOS.57 & 58/M/2015 & ITA NO.716/M/2014 M/S. KEVIN TEXTILES INDUSTRIES & M/S. KIRON & CO. 4 THAT TAX EFFECT IS MORE THAN RS.10 LACS OR THE REVE NUE WANTS TO AGITATE THE MATTER IN ACCORDANCE WITH THE PROVISIONS/CLAUSES AS CONTAINED IN THE AFORESAID CIRCULAR. 5. IN THE RESULT, THE CAPTIONED APPEALS FILED BY TH E REVENUE ARE DISMISSED. 6. SO FAR AS THE CROSS OBJECTIONS FILED BY THE ASSE SSEE ARE CONCERNED, THE LD. A.R. OF THE ASSESSEE HAS MADE A STATEMENT THAT IN V IEW OF THE FACT THAT THE REVENUES APPEALS ARE BEING DISMISSED, SHE DOES NOT PRESS THE CROSS OBJECTIONS FILED BY THE ASSESSEES. 7. IN VIEW OF THE ABOVE, CROSS OBJECTIONS FILED BY THE ASSESSEE ARE ALSO DISMISSED. 8. IN THE RESULT, THE APPEALS OF THE REVENUE AS WEL L AS THE CROSS OBJECTIONS OF THE ASSESSEES ARE HEREBY DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 24.08.2016. SD/- SD/- (B.R. BASKARAN) (SANJAY GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED: 24.08.2016. * KISHORE, SR. P.S. COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT (A) CONCERNED, MUMBAI THE DR CONCERNED BENCH //TRUE COPY// [ BY ORD ER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.