ACIT, Mangalore V. E. Krishnamurthy (HUF), Dakshina Kannada

ITA 1123/BANG/2012

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 8655 (ITAT-BANGALORE)
• Duration Of Justice: 3 year(s) 4 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-02-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 02-02-2016
• Assessment Year: 2007-2008
• Appeal Filed On: 06-09-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: G RE DDY
• Assessee Lawyers: S VENKATESAN
• Keywords: Audit objection; Tax effect
• Section: 6

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE BENCH A BEFORE S HRI VIJAYPAL RAO, JUDICIAL MEMBER AND SHRI INTURI RAMA RAO , ACCOUNTANT MEMBER I.T . A. NO S . 1123 & 1124 / BANG/20 1 2 (ASSESSMENT YEAR S : 200 6 - 07 & 2007 - 08 ) ASST. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE, MANGALORE. . APPELLANT. VS. E. KRISHNAMURTHY, HUF GURUKRIPA, KALLERI, RAMAKUNJA P.O. PUTTUR, D.K. 574 241 .. RESPONDENT. PAN AAAHE 1269F I.T . A. NO S . 1125 TO 1127/ BANG/20 12 (ASSESSMENT YEAR S : 2006 - 07 TO 2008 - 09 ) ASST. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE, MANGALORE. . APPELLANT. VS. SHRI E. KRISHNAMURTHY, PUTTUR, D.K. 574 241 .. RESPONDENT. PAN AFXPK 0158F APPELLANT BY : SHRI G. RE DDY, CIT (D.R) R E SPONDENT BY : SHRI S. VENKATESAN, C.A. DATE OF H EARING : 2.2.2016. DATE OF P RONOUNCEMENT : 2.2.2016 . O R D E R PER SHRI VIJAYPAL R AO, J.M. : THESE ARE APPEAL S FILED BY REVENUE DIRECTED AGAINST ORDERS ALL DATED 26 . 6.2012 OF COMMISSIONER OF INCOME T A X (APPEALS), MANGALORE FOR ASSESSMENT YEAR S 2006 - 07 TO 2008 - 09 IN RESPECT OF THE ASSESSEE AND ASSESSEE HUF. 2 IT A NO S . 1123 TO 1127 /BANG/201 2 02. WHEN THE APPEAL S W ERE TAKEN UP FOR HEARING LD. COUNSEL FOR THE ASSESSEE POINTED OUT THAT TAX EFFECT INVOLVED IN EACH OF THESE APPEALS WAS LESS THAN RS.10 LAKHS FOR THE IMPUGNED ASSESSMENT YEAR S OR THE PENALTY LEVIED WHICH WAS DELETED BY T HE CIT (A) WAS BELOW RS.10 LAKH. THEREFORE BY VIRTUE OF CIRCULAR NO.21/2015, DT.10.12.2015, THESE APPEALS ARE NOT MAINTAINABLE INVOLVING TAX EFFECT BELOW THE LIMITS LAID DOWN FOR FILING APPEALS BEFORE THIS TRIBUNAL. 03. LD. DR HAS NOT DISPUTED THE TAX EFFECT BEING BELOW RS.10 LAKHS IN THE ISSUE INVOLVED IN THE REVENUE S APPEAL S . HOWEVER LD DR STATED THAT EXISTENCE OR NOT OF ANY REVENUE AUDIT OBJECTIONS LEADING TO THE FILING OF THE APPEAL NEEDED TO BE ASCERTAINED. 04. WE HAVE PERUSED THE ORDERS AND HEARD THE CONTENTIONS. PARAS 3, 4 & 10 OF THE CIRCULAR NO.21/2015 (SUPRA) IS REPRODUCED HEREUNDER : 3. HENCEFORTH, APP EALS/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 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 PUR POSE, TAX EFFECT MEANS THE DIFFERENCE BETWEEN THE TAX ON THE TOTAL INCOME ASSESSED AND THE TAX THAT WOULD HAVE BEEN CHARGEABLE HAD 3 IT A NO S . 1123 TO 1127 /BANG/201 2 SUCH TOTAL INCOME BEEN REDUCED BY THE AMOUNT OF INCOME IN RESPECT OF THE ISSUES AGAINST WHICH APPEAL IS INTENDED TO BE FILE D (HEREINAFTER REFERRED 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 INTERES T 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. IN CASE OF PENALTY ORDERS, THE TAX EFFECT WILL MEAN QUANTUM OF PENALTY DELETED OR REDUCED IN THE OR DER TO BE APPEALED AGAINST. 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. APPEA LS BEFORE THE SUPREME COURT WILL BE GOVERNED BY THE INSTRUCTIONS ON THIS SUBJECT, OPERATIVE AT THE TIME WHEN SUCH APPEAL WAS FILED. 05. THE TAX EFFECT ON THE ISSUES AND / OR THE PENALTY THAT IS DISPUTED IN EACH APPEAL BY THE REVENUE IS LESS THAN RS.10 LA KHS FOR THE IMPUGNED ASSESSMENT YEAR S . NEITHER THE C ONSTITUTIONAL VALIDITY OF ANY PROVISIONS OF THE ACT OR RULES NOR THE LEGALITY OR VIRES OF ANY BOARD ORDER, NOTIFICATION, INSTRUCTION OR CIRCULAR WAS AN ISSUE BEFORE THE LOWER AUTHORITIES. REVENUE HAS NO T BROUGHT TO OUR NOTICE ANYTHING TO SHOW THAT THE APPEAL AROSE ON AN ISSUE EMANATING FROM ANY REVENUE AUDIT OBJECTIONS ACCEPTED BY THE DEPARTMENT. ADDITION GIVING RISE TO THE APPEALS DOES NOT RELATE TO ANY UNDISCLOSED FOREIGN ASSETS / BANK ACCOUNTS. T HUS WE FIND THAT THE CIRCULAR NO.21/ 2015 (SUPRA) IS SQUARELY APPLICABLE IN THIS CASE. HOWEVER IF REVENUE, AT A 4 IT A NO S . 1123 TO 1127 /BANG/201 2 LATER STAGE FIND THAT APPEAL ARISE OUT OF ISSUES EMANATING FROM AUDIT OBJECTION IT WILL BE FREE TO FILE MP FOR RECALLING THIS ORDER. 06. IN TH E RESULT, THE APPEAL S OF THE REVENUE ARE DISMISSED AS NOT MAINTAINABLE. ORDER PRONOUNCED IN THE OPEN COURT ON 2 ND FEB., 2016. SD/ - ( INTURI RAMA RAO ) ACCOUNTANT MEMBER SD/ - ( VIJAYPAL RAO ) JUDICIAL MEMBER *REDDY GP COPY TO : 1. APPELLANT 2. RESPONDENT 3. C.I.T. 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE. (TRUE COPY) BY ORDER ASST. REGISTRAR, ITAT, BANGALORE