The ITO, Ward-9(2), Ahmedabad V. Shri Ghanshyam S. Patel, Ahmedabad

ITA 1118/AHD/2014

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 5082 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 3 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-08-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 06-07-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 15-04-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DINESH SINGH
• Keywords: Maximum Marginal Rate; Retrospective amendment; Tax effect
• Section: 68

Judgement Text

, - IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH D BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER ./ ITA NO. 1118/AHD/2014 / ASSESSMENT YEAR: 2009-10 ITO, WARD-9(2) AHMEDABAD. VS SHRI GHANSHYAM S. PATEL 5, RATNASAGAR SOCIETY PART-II B/H. SOLA HIGH COURT SOLA, AHMEDABAD. PAN : AMLPP 8617M / (APPELLANT) / (RESPONDENT) REVENUE BY : SHRI DINESH SINGH, SR.DR ASSESSEE BY : SHRI UMAID SINGH BHATI, AR / DATE OF HEARING : 18/07/2018 /DATE OF PRONOUNCEMENT : 01/08/2018 O R D E R PER RAJPAL YADAV, JUDICIAL MEMBER : THIS IS REVENUES APPEAL AGAINST ORDER OF THE LD.CIT(A)-XV, AHMEDABAD DATED 3.1.2014 PASSED FOR THE ASSESSMENT YEAR 2009-10. 2. IN THIS APPEAL, REVENUE HAS CHALLENGED CIT(A)S ORDER IN DELETING VARIOUS ADDITIONS AS SET OUT IN THE GROUNDS OF APPE AL. 3. AT THE OUTSET, THE LD.COUNSEL FOR THE ASSESSEE F OR THE ASSESSEE POINTED OUT THAT THE APPEAL OF THE REVENUE IS NOT MAINTAINA BLE IN VIEW OF RECENT CBDT CIRCULAR NO.3/2018 DATED 11.7.2018 RESTRICTING THE FILLING OF THE ITA NO.1118/AHD/2014 - 2 - APPEAL BY THE REVENUE WHERE THE TAX EFFECT IS BELOW RS.20 LAKH. THE TAX EFFECT ON THE DISPUTED ADDITION IS BELOW RS.20 LAKH S, THEREFORE, APPEAL OF THE REVENUE IS LIABLE TO BE DISMISSED. THE LD.COUNS EL COUNSEL HAS FILED WRITTEN SUBMISSIONS TO THIS EFFECT SHOWING TAX EFFE CT IS BELOW RS.20 LAKHS. IT READS AS UNDER: AS PER THE GROUNDS OF APPEAL, THE DEPARTMENT IS AG GRIEVED IN RESPECT OF DELETION OF FOLLOWING ADDITIONS: (A) RS.16,33,412/- IN RESPECT OF ESTIMATED NET PROFIT (B) RS.15,93,000/- UNDER SECTION 68 OF THE I.T.ACT, 196 1 AND (C) RS.11,60,192/- IN RESPECT OF SUNDRY CREDITORS TOTALING TO RS.43,86,604/-BY THE LD.CIT(A) IN THE C ASE OF THE RESPONDENT. THE MAXIMUM MARGINAL RATE OF TAX APPLICABLE TO AN INDIVIDUAL WAS 30% FOR THE A.YR.2009-10 BESIDES SURCHARGE @10% AND EDUCATION CESS @3%. ACCORDINGLY, THE TAX, SURCHARGE & CESS ON 43,86,604 /- WORKS OUT TO LESS THAN RS.20,00,000/- A LIMIT REVISED BY THE HON BLE CBDT VIDE ITS CIRCULAR NO.3 OF 2018 DATED 11 TH JULY, 2018 FOR FILING AN APPEAL BEFORE THE HONBLE TRIBUNAL. LD.DR DID NOT DISPUTE THE SAME THE CALCULATION OF TAX EFFECT MADE BY THE ASSESSEE, BUT SUBMITTED THAT THE ISSUE IS LEFT TO THE TRIBUNAL TO BE DECIDED IN ACCORDANCE WITH LAW. 4. WE FIND THAT THE APPEAL OF THE REVENUE IS PRESEN TED ON 15.2.2017. ON 8.1.2016 THE CBDT HAS ISSUED INSTRUCTIONS BEARIN G NO. 3 OF 2018 UNDER FILE NO.F.NO.279/MISC.142/2007-ITJ(PT) PROHIB ITING ITS SUBORDINATE AUTHORITIES FROM FILING OF THE APPEAL TO THE TRIBUN AL AGAINST THE ORDER OF THE CIT(A) WHERE THE TAX EFFECT BY VIRTUE OF THE RELIEF GIVEN BY THE CIT(A) IS LESS THAN RS.20 LAKHS. THE INSTRUCTIONS HAVE BEEN MADE APPLICABLE WITH ITA NO.1118/AHD/2014 - 3 - RETROSPECTIVE EFFECT, MEANING THEREBY, THESE INSTRU CTIONS ARE APPLICABLE ON PENDING APPEALS ALSO. IN THE PRESENT CASE, AS PER THE NOTE SUBMITTED BY THE ASSESSEE SHOWS TOTAL TAX EFFECT IS BELOW RS.20 LAKH S, WHICH IS NOT CONTESTED BY THE REVENUE. THE TAX EFFECT AS PER CBDT CIRCUL AR IS TAX ON THE TOTAL INCOME ASSESSED MINUS THE TAX THAT WOULD HAVE BEEN CHARGEABLE HAD SUCH TOTAL INCOME BEEN REDUCED BY THE AMOUNT OF INCOME I N RESPECT OF THE ISSUE AGAINST WHICH APPEAL IS FILED, IS LESS THAN RS.20 L AKHS. FURTHER, THE CASE OF THE REVENUE ALSO DOES NOT FALL WITHIN THE AMBIT OF EXCEPTIONS PROVIDED IN THE CIRCULAR. THUS, KEEPING IN VIEW THE ABOVE CBDT CIRCULAR AND PROVISIONS OF SECTION 268A OF THE INCOME TAX ACT, W E ARE OF THE VIEW THAT THE PRESENT APPEAL OF THE REVENUE DESERVES TO BE DI SMISSED. IT IS ACCORDINGLY DISMISSED. HOWEVER, IT IS OBSERVED THAT IN CASE ON RE-VERIFICA TION AT THE END OF THE AO IT COMES TO THE NOTICE THAT THE TAX EFFECT I S MORE OR REVENUES CASE FALLS WITHIN THE AMBIT OF EXCEPTIONS PROVIDED IN TH E CIRCULAR, THEN THE DEPARTMENT WILL BE AT LIBERTY TO APPROACH THE TRIBU NAL FOR RECALL OF THIS ORDER. SUCH APPLICATION SHOULD BE FILED WITHIN THE TIME PERIOD PRESCRIBED IN THE ACT. IN VIEW OF THE ABOVE, THE APPEAL OF TH E REVENUE IS DISMISSED DUE TO LOW TAX EFFECT. 5. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. PRONOUNCED IN THE OPEN COURT ON 1 ST AUGUST, 2018. SD/- SD/- (PRADIP KUMAR KEDIA) ACCOUNTANT MEMBER (RAJPAL YADAV) JUDICIAL MEMBER AHMEDABAD; DATED, 01/08/2018