ITO, W-6(3), Mohali V. M/s Kapsons Realtech (P) Ltd., Mohali

ITA 1126/CHANDI/2018

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 5327 (ITAT-CHANDIGARH)
• Duration Of Justice: 4 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-01-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Chandigarh
• Next Hearing Date: 17-01-2019
• Assessment Year: 2015-2016
• Appeal Filed On: 30-08-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Tax effect
• Section: 43; 13

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH A , CHANDIGARH , !' #! $ % , &' BEFORE: SHRI SANJAY GARG, JUDICIAL MEMBER AND SMT.ANNAPURNA GUPTA, ACCOUNTANT MEMBER ./ ITA NO.1125 /CHD/2018 / ASSESSMENT YEAR : 2015-16 THE INCOME TAX OFFICER, WARD 6(3), MOHALI. M/S KAPSONS GLOBAL (P) LTD., D-196, PHASE 8B, INDL. AREA, MOHALI. ./ PAN NO.AAECK8666R / APPELLANT / RESPONDENT ./ ITA NO.1126 /CHD/2018 / ASSESSMENT YEAR : 2015-16 THE INCOME TAX OFFICER, WARD 6(3), MOHALI. M/S KAPSONS REALTECH(P) LTD., D-196, PHASE 8B, INDL. AREA, MOHALI. ./ PAN NO.AAFCK2214G / APPELLANT / RESPONDENT ./ ITA NO.1129/CHD/2018 / ASSESSMENT YEAR : 2015-16 THE D.C.I.T., CIRCLE-6(1) MOHALI. M/S KAPSONS RETAIL PVT. LTD., D-196, PHASE 8B, INDL. AREA, MOHALI. ./ PAN NO.AAECK8149B / APPELLANT / RESPONDENT & ./ ITA NO.1130/CHD/2018 / ASSESSMENT YEAR : 2015-16 THE D.C.I.T., CIRCLE-6(1) MOHALI. M/S KAPSONS WARDROBE (P) LTD., D-196, PHASE 8B, INDL. AREA, MOHALI. ./ PAN NO.AALKF7835Q / APPELLANT / RESPONDENT ITA NOS.1125, 1126, 1129 & 1130/CHD/2018 A.Y.2015-16 2 /ASSESSEE BY : SMT.CHANDERKANTA, SR.DR ! / REVENUE BY : SHRI JASPAL SHARMA, ADV. '# $ /DATE OF HEARING : 17.01.2019 %&'(# /DATE OF PRONOUNCEMENT: 28.01.2019 &( /ORDER PER BENCH: THE PRESENT APPEALS HAVE BEEN FILED BY DIFFERENT ASSESSEES AGAINST SEPARATE ORDERS OF THE COMMISSIO NER OF INCOME TAX (APPEALS)-2, CHANDIGARH, (IN SHORT CIT( A) EACH DATED 19.6.2018 PASSED U/S 250(6) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS ACT). 2. AT THE OUTSET, THE LD. COUNSEL FOR ASSESSEE POIN TED OUT THAT THE APPEAL EFFECT INVOLVED IN ALL THE IMPUGNED APPEALS WAS BELOW THE LIMIT OF RS.20 LACS, WHICH WAS MANDA TED BY THE CBDT FOR FILING APPEALS BEFORE THE I.T.A.T, VID E IT LATEST CIRCULAR NO. 3/2018 DATED 11.07.2018,REVISING THE L IMIT. 3. THE LD. DR, THOUGH CONCEDED THAT THE TAX EFFECT INVOLVED IN THE ABOVE APPEALS WAS BELOW RS.20 LACS, BUT STATED THAT A REPORT FROM THE ASSESSING OFFICER (IN SHORT A.O) HAD BEEN CALLED FOR REGARDING WHETHER THE APP EALS FELL UNDER ANY OF THE EXCLUSIONARY CLAUSES MENTIONED IN THE SAID CBDT CIRCULAR. THE LD. DR CONTENDED THAT THE A.O. H AD SUBMITTED HIS REPORT, VIDE LETTER DATED 15.1.2019, STATING THAT THE APPEALS FELL WITHIN THE EXCEPTION LAID DOW N IN PARA 10 OF THE AFOREMENTIONED CBDT CIRCULAR. COPY OF THE REPORT WAS FILED BEFORE US AND IS REPRODUCED HEREUNDER: TO THE ADDI. COMMISSIONER OF INCOME TAX (DR) ITAT, CHANDIGARH ITA NOS.1125, 1126, 1129 & 1130/CHD/2018 A.Y.2015-16 3 MADAM, SUB:- APPEAL FILED BY THE DEPARTMENT IN THE CASES OF M/S KAPSONS GLOBAL (P) LTD., M/S KAPSONS REALTECH(P) LTD., KAPSONS RETAIL PVT. LTD., AND KAPSONS WARDROBE (P)., MOHALI IN ITA NOS. 1125, 1126 AND 1129,1130/ CHD/ 2 018 FOR THE A.Y. 201S-16- REGARDING KINDLY REFER TO YOUR OFFICE LETTER DATED 15.01.2019 ON THE SUBJECT CITED ABOVE 2. IN THIS REGARD IT IS SUBMITTED THAT THE ASSESSME NT RECORD IN THE CASE OF KAPSONS RETAIL PVT. LTD., AND KAPSONS WARDROBE (P)., MOHALI HAS AL READY BEEN TRANSFERRED TO DCIT CIRCLE 6(1), MOHALI AND COPY OF YOUR OFFICE LETTER HAS BEEN FORW ARDED TO THEIR OFFICE. 3. WITH REGARD TO THE REASONS FOR .FILLING OF APPEA L BEFORE THE HON'BLE ITAT IN THE CASE OF M/S KAPSONS REALTECH (P) LTD FOR THE ASSESS MENT YEAR 2015-16, THE SAME HAS BEEN FILED DUE TO THE REASON THAT THE LD. CIT (APPEAL) ERRED I N LAW IN ALLOWING RELIEF TO THE ASSESSEE ON ACCOUNT OF LATE PAYMENT OF ESI AND EMPLOYEE'S CONTR IBUTIONS MADE TO PROVIDENT FUND U/S 36(L)(VA) OF THE INCOMETAXACT,1961INCONTRAVENTION T O THE CBDT'S CIRCULAR NO. 22/2015 DATED 17.12.2015, WHEREIN IT HAS CLEARLY BEEN STATED THAT THE .CIRCULAR DOES NOT APPLY TO CLAIM OF DEDUCTION RELATING TO EMPLOYEES CONTRIBUTION TO WE LFARE FUNDS WHICH ARE GOVERNED BY SECTION 36(L)(VA) OF IT ACT. THE MONETARY LIMITS FO R FILING OF APPEALS DOES NOT APPLY IN THIS CASE AS THE AS THE PRESENT CASE FALLS IN ONE OF THE EXCEPTI ONS LAID DOWN IN PARA 10 OF THE BOARD'S CIRCULAR NO 03/2018 DATED 11.07.2018 ISSUED VIDE F.NO. 279/M ISC.142/2007-ITJ (PT) FOR FILING OF FURTHER APPEALS BEFORE THE HON'BLE ITAT. YOURS FAITHFULLY, SD/- (CHANDRESH KUMAR) INCOME TAX OFFICER, WARD 6(3), MOHALI. COPY SUBMITTED TO :- 1. THE PR. COMMISSIONER OF INCOME TAX-2 CHANDIGARH FOR INFORMATION 2. THE ADD I. CIT,RANGE-VI, MOHALI FOR INFORMATION 3. THE BY. COMMISSIONER OF INCOME TAX/CIRCLE 6(1), MOH ALI YOURS FAITHFULLY, SD/- (CHANDRESH KUMAR) INCOME TAX OFFICER, WARD 6(3), MOHALI. 4. AT THIS JUNCTURE, THE LD. DR WAS ASKED AT BAR TO SPECIFY THE SPECIFIC CLAUSE OF PARA 10 IN WHICH THE PRESENT CASES FELL, SINCE THERE WAS NO SUCH MENTION IN THE AOS REPORT. TO THIS THE LD. DR RESPONDED BY STATING THAT IT WAS TELEPHO NICALLY COMMUNICATED TO HER BY THE A.O. THAT THE PRESENT CA SES FELL WITHIN THE EXCLUSIONARY CLAUSE 10(B) OF THE CIRCULA R. THE ITA NOS.1125, 1126, 1129 & 1130/CHD/2018 A.Y.2015-16 4 RELEVANT CLAUSE 10(B) OF THE CIRCULAR IS REPRODUCED HEREUNDER: 10. ADVERSE JUDGEMENTS RELATING TO THE FOLLOWING I SSUES SHOULD BE CONTESTED ON MERITS NOTWITHSTANDING THAT THE TAX ENTAILED IS LESS THAN THE MONETARY LIMITS SPECIFIED IN PARA 3 ABOVE OR THERE IS NO TAX EFFECT: . . . (B) WHERE BOARDS ORDER, NOTIFICATION, INSTRUCTION OR CIRCULAR HAS BEEN HELD TO BE ILLEGAL OR ULTRA VIRES , OR 5. THE CLAUSE 10(B) OF THE CIRCULAR, WE FIND, EXCL UDES THOSE JUDGMENTS WHERE BOARDS ORDER, NOTIFICATION, INSTRUCTION OR CIRCULAR HAVE BEEN HELD TO BE ILLEGA L OR ULTRA VIRUS. ON PERUSING THE REPORT OF THE A.O., WE FIND THAT THE A.O. HAS MENTIONED THAT THE CIT(A) HAD ALLOWED RELI EF TO THE ASSESSEES IN THE PRESENT CASES IN CONTRAVENTION OF CBDT CIRCULAR NO.22/2015 DATED 17.12.20156 ON THE ISSUE OF ALLOWABILITY OF LATE PAYMENT OF EMPLOYEES CONTRIBU TION OF ESI AND PF AS PER THE PROVISIONS OF SECTION 36(1)(VA) O F THE ACT WHEREIN IT HAS BEEN CLEARLY STATED THAT THE CIRCUL AR DOES NOT APPLY TO THE CLAIM OF DEDUCTION RELATING TO EMPLOYE ES CONTRIBUTION TO WELFARE FUNDS WHICH ARE GOVERNED BY SECTION 36(1)(VA) OF THE ACT. 6. WE HAVE PERUSED THE ORDER OF THE CIT(A) ALSO WHO HAS ALLOWED THE ASSESSEES APPEAL ON THIS ISSUE FOLLOWI NG THE DECISION OF THE HON'BLE JURISDICTIONAL HIGH COURT I N THE CASE OF CIT VS. MARK AUTO INDUSTRIES LTD., 358 ITR 43 (P &H). ITA NOS.1125, 1126, 1129 & 1130/CHD/2018 A.Y.2015-16 5 7. IN VIEW OF THE ABOVE FACTS, IT IS EVIDENT THAT T HE ORDER OF THE CIT(A), WHILE ALLOWING THE ASSESSEES GROUND RA ISED BEFORE IT, HAS NOWHERE HELD ANY CBDT CIRCULAR TO BE ULTRA VIRES OR ILLEGAL. IN FACT, IT HAS FOLLOWED THE DECI SION OF THE HON'BLE JURISDICTIONAL HIGH COURT IN THIS REGARD, B Y WHICH IT IS BOUND BY RULE OF JUDICIAL PRECEDENCE. THE LD. DR WAS ASKED TO CLARIFY HOW THE ISSUE WAS COVERED BY CLAUS E 10(B) OF THE CBDT CIRCULAR, TO WHICH THE LD. DR SIMPLY RELIE D UPON THE REPORT OF THE A.O. IN THIS REGARD. 8. CONSIDERING THE ABOVE, WE FIND NO MERIT IN THE CONTENTION OF THE LD. DR THAT THE ORDER PASSED BY T HE CIT(A) HAD HELD ANY CBDT CIRCULAR TO BE ILLEGAL OR ULTRA V IRES. SINCE NO OTHER EXCLUSIONARY CLAUSE HAS BEEN POINTED OUT T O US IN WHICH THE PRESENT CASES FELL, IT IS CLEAR, THEREFOR E, THAT THE PRESENT CASES ARE COVERED BY THE CBDT CIRCULAR NO.3 /2018 AND THE PRESENT APPEALS ARE TO BE TREATED AS WITHDRAWN. 9. IT MAY BE NOTED THAT CBDT VIDE CIRCULAR NO. 3/20 18 DATED 11.07.2018 HAS REVISED THE MONETARY LIMIT UPT O RS.20 LACS FOR FILING APPEALS BY THE DEPARTMENT BEFORE TH E TRIBUNAL AND FURTHER VIDE PARA 13 OF THE SAID CIRCULAR IT HA S BEEN CLARIFIED THAT SAID CIRCULAR IS APPLICABLE RETROSPE CTIVELY TO THE PENDING APPEALS ALSO. THE HONBLE PUNJAB & HARY ANA HIGH COURT IN THE CASE OF PRINCIPAL CIT OF INCOME TAX VS. SURINDER KUMAR SINGHAL ITA NO 406-2016 (O&M) VIDE ORDER DATED 30.1.2017 WHILE FURTHER RELYING UPON THE DECI SION OF THE HON'BLE SUPREME COURT IN THE CASE OF CIT VS. ITA NOS.1125, 1126, 1129 & 1130/CHD/2018 A.Y.2015-16 6 DHANALEKSHMI BANK LTD. (2015) 373 ITR 526 (SC), HA S DISMISSED THE APPEAL OF THE REVENUE WITHOUT GOING I NTO THE MERITS DUE TO LOW TAX EFFECT LEAVING THE QUESTION O F LAW OPEN. IN VIEW OF THE CBDT CIRCULAR NO. 03/2018 (SUPRA) AN D IN THE LIGHT OF THE ABOVE REFERRED TO DECISION OF THE HON' BLE JURISDICTIONAL PUNJAB & HARYANA HIGH COURT (SUPRA) , THE PRESENT APPEAL OF THE REVENUE IS DISMISSED DUE TO L OW TAX EFFECT. 10. IT IS, HOWEVER, CLARIFIED THAT THE DISMISSAL OF THE ABOVE APPEAL SHALL NOT BE TAKEN TO BE AFFIRMATION OF THE ORDER OF THE CIT(A) ON MERITS. THE LEGAL ISSUE RAISED BY THE REVENUE IS BEING LEFT OPEN TO BE ADJUDICATED IN AN APPROPRI ATE CASE. 11. IN THE RESULT, ALL THE DEPARTMENTAL APPEALS ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- ' #! $ % (SANJAY GARG ) (ANNAPURNA GUPTA) / JUDICIAL MEMBER &' / ACCOUNTANT MEMBER )' /DATED: 28 TH JANUARY, 2019 * ! * &) *+,+ / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. - $ / CIT 4. - $ ( )/ THE CIT(A) 5. +./ 0 , #0 , 123/4 / DR, ITAT, CHANDIGARH 6. /35' / GUARD FILE &) $ / BY ORDER, 6 ! / ASSISTANT REGISTRAR