ITO,Ward 2(2), Aurangabad V. Shri Shantilal D Muthiyan, Aurangabad

ITA 1134/PUN/2008

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 49763 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 8 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-05-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 14-03-2011
• Assessment Year: 1990-1991
• Appeal Filed On: 28-08-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: H C LEUVA
• Keywords: Question of law; Tax effect

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B , PUNE BEFORE SHRI I.C. SUDHIR (JM) AND SHRI G.S. PANNU (AM) ITA NO. 1134 /PN/ 200 8 ( ASSTT. YEAR : 199 0 - 91 ) INCOME T AX OFFICER WD 2(2), AURANGABAD .. APP ELLANT V. SHRI SHANTILAL D MUTHIYAN , PRO P. METRO CLOTH CENTER, TILAK PATH, AURANGABAD PAN : NOT AVAILABLE . RESPONDENT APP ELLANT BY : SHRI H.C. LEUVA RESPONDENT BY : MS. DEEPA KHARE ORDER PER I.C. SU DHIR, JM THIS APPEAL HA S BEEN PREFERRED BY THE REVENUE AGAINST THE ACTION OF THE LD CIT(A) IN DELETING THE PENALTY OF RS.2,04,180/ - LEVIED U/S. 271(1)(C ) OF THE ACT. 2. AT THE OUTSET OF HEARING, THE LD. A.R. POINTED OUT THAT TAX EFFECT IN TH IS APPEALS IS BELOW RS. 3 LACS, HENCE AS PER CBDT INSTRUCTION NO. 3 DATED 9.2.2011, TH IS IS N OT MAINTAINABLE. IN OTHER WORDS, THE REVENUE SHALL NOT FILE THE APPEAL AGAINST FIRST APPELLATE ORDER HAVING TAX EFFECT UPTO RS. 3 LACS. THE LD. A.R. PLACED RELIANCE ON THE FOLLOWING DECISIONS IN SUPPORT : 1. CIT V/S. MRS. P.S. JAIN & CO., ITR 179/1991, ORDER DATED 2.8.2010 OF HONBLE BOMBAY HIGH COURT. 2. ITO V/S. SHRI ASHOK G. DHANDHARIAI, ITA NO. 2460/MUM/2010(A.Y. 2005 - 06), ORDER DATED 28 FEBRUARY 2011. ITA . NO 1134/PN/200 8 SHRI SHANTILAL D. MUTHIYAN.. A. Y 1990 - 91 PAGE OF 4 2 3. CIT V/S. DELHI RACE CLUB LTD., ITA NO. 128/2008, ORDER DATED 3.3.2011 (DELHI HIGH COURT). 3. T HE LD. D.R. OPPOSED THE ABOVE SUBMISSION OF THE LD. A.R. ON THE BASIS THAT THE ABOVE INSTRUCTION DATED 9.2.2011 OF CBDT IS PROSPECTIVE IN EFFECT, HENCE NOT APPLICABLE IN THE PRESENT APPEAL 4. IN REJOINDER,THE LD. A.R. CITED THE DECISION OF HONBLE BO MBAY HIGH COURT IN THE CASE OF CIT V/S. MADHUKAR K. INAMDAR (HUF),318 ITR 149 AND CIT V/S. PITHWA ENGINEERING WORKS, 276 ITR 519 (BOM.) WITH THIS SUBMISSION THAT IN THESE DECISIONS, THE HONBLE JU RIS DIC TION HIGH COURT HAS BEEN PLEASED TO HOLD THAT THE TAX EFFECT AS PER MONITARY LIMIT AS PER THE CBDT INSTRUCTIONS IS TO BE WORKED OUT IN EACH OF THE APPEALS PREFERRED BY THE REVENUE EVEN AGINST COMMON FIRST APPELLATE ORDER. 5. HAVING GONE THROUGH THE ABOVE CITED DECISIONS BY THE LD. A.R., WE FIND THAT IN THE CASE OF CIT V/S. DELHI RACE CLUB LTD. (SUPRA), THE HONBLE DELHI HIGH COURT AS PER THE RECENT GUIDELINES OF CBDT THAT APPEAL IN THOSE CASES WHERE THE TAX EFFECT IS LESS THAN RS.10 LAKHS ARE NOT TO BE ENTERTAINED HAS BEEN PLEASED TO DISMISS THE APPEAL PREF ERRED BY THE REVENUE HAVING TAX EFFECT BELOW RS. 10 LACS. THE HONBLE DELHI HIGH COURT FOLLOWING ITS EARLIER DECISION IN THE CASE OF CIT V/S. M/S. P.S. JAIN & CO. (ITA NO. 179/1991 DECIDED ON 2 ND AUGUST 2010) HAS BEEN PLEASED TO HOLD THAT SUCH CIRCULAR WO ULD ALSO APPLY TO PENDING CASES. HONBLE DELHI HIGH COURT IN THE CASE OF CIT V/S. M/S. P.S. JAIN & CO. (SUPRA) HAS BEEN PLEASED TO DISMISS THE REFERENCE APPLICATION HAVING TAX IMPA C T OF RS. 1,80,000/ - FOLLOWING THE DECISION OF HONBLE BOMBAY HIGH COURT I N THE CASE OF CIT V/S. PITHWA ENGINEERING WORKS (2005), 276 ITR 519 (BOM) AND HONBLE M.P. HIGH ITA . NO 1134/PN/200 8 SHRI SHANTILAL D. MUTHIYAN.. A. Y 1990 - 91 PAGE OF 4 3 COURT IN THE CASE OF CIT V/S. ASHOKKUMAR MANIBHAI PATEL & CO., 317 ITR 386 (M.P.). THE HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT V/S. PITHWA ENGINEERING WOR KS (SUPRA) IN PARA NO.6, HAS EXPRESSED FOLLOWING VIEW AT PAGE NO. 520 : THIS COURT CAN VERY WELL TAKE JUDICIAL NOTICE OF THE FACT THAT BY PASSAGE OF TIME MONEY VALUE HAS GONE DOWN, THE COST OF LITIGATION EXPENSES HAS GONE UP, THE ASSESSES ON THE FILE OF THE DEPARTMENTS HAVE BEEN INCREASED CONSEQUENTLY, THE BURDEN ON THE DEPARTMENT HAS ALSO INCREASED TO A TREMENDOUS EXTENT. THE CORRIDORS OF THE SUPERIOR COURTS ARE CHOCKED WITH HUGE PENDENCY OF CASES. IN THIS VIEW OF THE MATTE, THE BOARD HAS RIGHTLY TAKEN A DECISION NOT TO FILE REFERENCES IF THE TAX EFFECT LESS THAN RS.2 LAKHS.THE SAME POLICY FOR OLD MATTERS NEED TO BE ADOPTED BY THE DEPARTMENT. IN OUR VIEW, THE BOARDS CIRCULAR DATED MARCH 27, 2000 IS VERY MUCH APPLICABLE EVEN TO THE OLD REFERENCES WHICH ARE STILL UNDECIDED. THE DEPARTMENT IS NOT JUSTIFIED IN PROCEEDING WITH THE OLD REFERENCES WHEREIN THE TAX IMPACT IS MINIMAL. THUS, THERE IS NO JUSTIFICATION TO PROCEED WITH DECADES OLD REFERENCES HAVING NEGLIGIBLE TAX EFFECT. IN VIEW OF THESE DEC ISIONS, INCLUDING DECISION OF HONBLE BOMBAY JURISDICTIONAL HIGH COURT, WE COME TO THE CONCLUSION THAT CBDT GUIDELINES FOR THE REVENUE NOT TO PREFER APPEAL AGAINST FIRST APPELLATE ORDER BEFORE THE TRIBUNAL HAVING TAX EFFECT UPTO RS. 3 LACS IS VERY MUCH APP LICABLE EVEN IN PENDING APPEALS. IN THE CASE OF CIT V/S. CIT V/S. MADHUKAR K. INAMDAR (HUF) (SUPRA, THE HONBLE JURISDICTIONAL HIGH COURT HAS BEEN PLEASED TO HOLD AGAIN THAT CBDT CIRCULAR DT.15 TH MAY 2008 WOULD BE VERY MUCH APPLICABLE TO THE PENDING CASES REQUIRING DEPARTMENT TO WITHDRAW THE CASES WHEREIN TAX EFFECT IS LESS THAN THE PRESCRIBED MONITARY LIMITS. THE HONBLE HIGH COURT HAS BEEN FURTHER PLEASED TO HOLD THAT EVEN IF THE QUESTION OF LAW IS OF RECURRING NATURE, EVEN THEN THE REVENUE IS NOT EXPEC TED TO FILE APPEALS IN SUCH ITA . NO 1134/PN/200 8 SHRI SHANTILAL D. MUTHIYAN.. A. Y 1990 - 91 PAGE OF 4 4 CASES, IF THE TAX IMPACT IS LESS THAN THE MONITARY LIMIT FIXED BY THE CBDT. WE, THUS, RESPECTFULLY FOLLOWING THESE DECISIONS INCLUDING DECISINS OF HONBLE BOMBAY HIGH COURT IN AFORESAID CASES HAVING BINDING EFFECT ON THE TRIBU NAL, HOLD THAT THIS APP EAL HAVING MONETARY IMPACT BELOW RS. 3 LACS IS NOT MAINTAINABLE AS THE APPEAL HA S BEEN PREFERRED BY THE REVENUE IN VIOLATION OF THE ABOVE STATED GUIDELINES OF THE CBDT. THE SAME IS DISMISSED AS SUCH. THE ORDER IS PRONOUNCED IN TH E OPEN COURT ON 11TH MAY 2011. SD/ - SD/ - ( G.S. PANNU ) ACCOUNTANT MEMBER ( I.C. SUDHIR ) JUDICIAL MEMBER PUNE , DATED THE 11TH MAY , 20 1 1 US COPY OF THE ORDER IS FORWARDED TO : 1. THE A PP ELLA NT 2. THE RESP ONDENT 3. THE CIT , AURANGABAD 4. THE CIT(A) - AURANGABAD 5. THE D.R. B BENCH, PUNE 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL PUNE