The ACIT, Central Circle-2(4), Ahmedabad V. Shri Dilip K.Soni, Ahmedabad

ITA 1118/AHD/2010

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 6717 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-04-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 29-04-2011
• Assessment Year: 2007-2008
• Appeal Filed On: 12-04-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R K DHANESTA
• Assessee Lawyers: MEHUL K PATEL
• Keywords: Tax effect
• Section: 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD, B BENCH (BEFORE S/SHRI T.K. SHARMA, JUIDICIAL MEMBER AND A.K. GARODIA, ACCOUNTANT MEMBER) ITA NO.1118/AHD/2010 [ASSTT. YEAR : 2006-2007] ACIT, CENT.CIR.2(4) AHMEDABAD. VS. SHRI DILIP K. SONI D/45, SHREE KRISHNA CENTRE NR. MITHAKHALI SIX ROADS NAVRANGPURA, AHMEDABAD. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI MEHUL K. PATEL REVENUE BY : SHRI R.K. DHANESTA O R D E R PER A.K. GARODIA, ACCOUNTANT MEMBER: THIS IS REVENUES APPEAL DIRECTED AGAINST THE ORDER OF THE LEARNED CO MMISSIONER OF INCOME TAX (APPEALS)-III, AHMEDABAD DATED 29.01.2010 FOR ASSES SMENT YEAR 2006-2007. 2. THE SOLE EFFECTIVE GROUND RAISED BY THE REVENUE IS AS UNDER: 1. THE LD.CIT(A) ERRED IN LAW AND ON FACTS AND CIR CUMSTANCES OF THE CASE IN RESTRICTING THE PENALTY OF RS.3,36,6 00/- LEVIED UNDER SECTION 271(1)(C) OF THE IT ACT TO THE EXTENT OF RS .50,400/-. 3. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS GIVEN RELIEF TO THE ASSESSEE BY RESTRICTING THE PENALTY UNDER SECTION 2 71(1)(C) OF THE I.T. ACT TO RS.50,400/- OUT OF PENALTY OF RS.3,36,600/- IMPOSED BY THE ASSESSING OFFICER. 4. THE LEARNED COUNSEL FOR THE ASSESSEE RAISED PREL IMINARY OBJECTION AS TO THE MAINTAINABILITY OF APPEAL FILED BY THE REVENUE IN V IEW OF RECENT CBDT CIRCULAR/INSTRUCTION NO. 3/2011 [F. NO. 279/MISC. 1 42/2007-ITJ], DATED 9-2-2011 WHEREIN CBDT HAS ENHANCED THE LIMITS FOR FILING APP EALS AGAINST TAXPAYERS IN THE INCOME TAX APPELLATE TRIBUNAL WHERE TAX EFFECT IS B ELOW RS.3 LAKH. 5. WE HAVE CONSIDERED THE ARGUMENTS OF BOTH THE SID ES AND GONE THROUGH THE MATERIAL PLACED BEFORE US. WE FIND THAT THE CBDT HA S ISSUED CIRCULAR/ INSTRUCTIONS ITA NO.1118/AHD/2010 -2- FROM TIME TO TIME IMPOSING RESTRICTION OF THE FILIN G OF APPEALS BEFORE THE ITAT, HIGH COURTS AND SUPREME COURT. THE LATEST CIRCULAR IS N O. 3/2011 [F. NO. 279/MISC. 142/2007-ITJ], DATED 9-2-2011 WHEREIN CBDT HAS ENHA NCED THE LIMITS FOR FILING APPEALS AGAINST TAXPAYERS IN THE INCOME TAX APPELLA TE TRIBUNAL FROM TAX EFFECT OF RS.2 LAKH, RS.4 LAKH AND RS.10 LAKH, RESPECTIVELY, TO RS.3 LAKH, RS.10 LAKH AND RS.25 LAKH, RESPECTIVELY. FROM THE ABOVE INSTRUCTION, IT IS EVIDENT THAT, THE CBDT IS INSTRUCTING ITS OFFICERS NOT TO FILE THE APPEAL WHE RE THE TAX EFFECT IS BELOW SPECIFIED MONETARY LIMITS. WE FIND THAT THE APEX COURT HAS CO NSIDERED THE EFFECT OF CIRCULAR ISSUED BY THE CBDT IN THE CASE OF COMMISSIONER OF C USTOMS VS. INDIAN OIL CORPORATION LTD. 267 ITR 272. THEIR LORDSHIPS EXAMI NED THE EARLIER DECISIONS OF THE APEX COURT WITH REGARD TO BINDING NATURE OF THE CIR CULAR AND LAID DOWN THE FOLLOWING PRINCIPLES AT PAGE 277 OF THE REPORTS :- THE PRINCIPLES LAID DOWN BY ALL THESE DECISIONS ARE (1) ALTHOUGH A CIRCULAR IS NOT BINDING ON A COURT O R AN ASSESSEE, IT IS NOT OPEN TO THE REVENUE TO RAISE A CONTENTION THAT IS CONTRARY TO A BINDING CIRCULAR BY THE BOARD. WHEN A CIRCULAR REMAINS IN OPERATION, THE REVENUE IS BOUND BY IT AND CANNOT BE ALLOWED TO PLEAD THAT IT IS NOT VALID NOR THAT IT IS CONTRARY TO THE TERMS OF THE STATUTE. (2) DESPITE THE DECISION OF THIS COURT, THE DEPARTM ENT CANNOT BE PERMITTED TO TAKE A STAND CONTRARY TO THE INSTRUCTI ONS ISSUED BY THE BOARD. (3) A SHOW CAUSE NOTICE AND DEMAND CONTRARY TO EXIS TING CIRCULARS OF THE BOARD ARE AB INITIO BAD. (4) IT IS NOT OPEN TO THE REVENUE TO ADVANCE AN AR GUMENT OR FILE AN APPEAL CONTRARY TO THE CIRCULARS. (EMPHASIS SU PPLIED) FROM THE ABOVE, IT IS EVIDENT THAT THE HONBLE APEX COURT HAS LAID DOWN THAT IT IS NOT OPEN TO THE REVENUE TO ADVANCE AN ARGUMENT OR FILE AN APPEAL CONTRARY TO THE CIRCULAR. THE APPEAL UNDER CONSIDERATION HAS CERTAINLY BEEN F ILED CONTRARY TO THE CIRCULAR ISSUED BY THE CBDT VIDE CIRCULAR F. NO. 279/MISC-64/05-ITJ DATED 24TH OCTOBER, 2005. THEREFORE, THE ABOVE DECISION OF THE HONBLE APEX C OURT WOULD BE SQUARELY APPLICABLE. EVEN OTHERWISE, THE REVENUE HAS BEEN TA KING A CONSISTENT APPROACH SINCE 1987 NOT TO FILE APPEAL WHERE THE REVENUE EFFECT IS BELOW CERTAIN MONETARY LIMIT TO REDUCE THE LITIGATION PENDING BEFORE THE TRIBUNAL A ND THE COURTS. IF THE APPEALS ITA NO.1118/AHD/2010 -3- CONTRARY TO SUCH CIRCULAR ARE ADMITTED, IT WOULD FR USTRATE THE PURPOSE OF ISSUING SUCH INSTRUCTIONS. IN THE ABOVE CIRCUMSTANCES, WE RESPEC TFULLY FOLLOWING THE DECISION OF THE HONBLE APEX COURT IN THE CASE OF INDIAN OIL CORPOR ATION LTD. HOLD THAT THE REVENUE SHOULD NOT HAVE FILED THE APPEAL CONTRARY TO THE AB OVE CIRCULARS ISSUED BY THE CBDT. ACCORDINGLY, THE SAME IS NOT ADMITTED AND BEING DIS MISSED IN LIMINE . 6. IN RESULT, REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 29 TH APRIL, 2011 SD/- SD/- (T.K. SHARMA) JUDICIAL MEMBER (A. K. GARODIA) ACCOUNTANT MEMBER PLACE : AHMEDABAD DATE : 29-04-2011 C OPY OF THE ORDER FORWARDED TO: 1) : APPELLANT 2) : RESPONDENT 3) : CIT(A) 4) : CIT CONCERNED 5) : DR, ITAT. BY ORDER DR/AR, ITAT, AHMEDABAD