ACIT Central Cir.-1(2), Pune V. M/s. Radiant Builders, Pune

ITA 1258/PUN/2010

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 2675 (ITAT-PUNE)
• Duration Of Justice: 5 year(s) 5 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-02-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 22-02-2016
• Assessment Year: 2006-2007
• Appeal Filed On: 24-09-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K RASTOGI
• Assessee Lawyers: SUNIL PATHAK
• Keywords: Tax effect
• Section: 143(3); 12A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE , !, # $ BEFORE MS. SUSHMA CHOWLA, JM AND SHRI PRADIP KUMAR KEDIA, AM ITA NO.1258/PN/2010 ASSESSMENT YEAR : 2006-07 THE ASSTT. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 1(2), PUNE. . APPELLANT VS. M/S RADIANT BUILDERS, 150, M. G. ROAD, PUNE 411 001. PAN : AABFR4656A . RESPONDENT / APPELLANT BY : SHRI S. K. RASTOGI, CIT / RESPONDENT BY : SHRI SUNIL PATHAK & SHRI NIKHIL PATHAK / DATE OF HEARING : 22.02.2016 / DATE OF PRONOUNCEMENT: 24.02.2016 % / ORDER PER PRADIP KUMAR KEDIA, AM : THE CAPTIONED APPEAL FILED BY THE REVENUE IS AGAINS T THE ORDER OF CIT(A)-IV, PUNE DATED 25.06.2010 RELATING TO ASSESS MENT YEAR 2006-07 PASSED UNDER SECTION 143(3) R.W.S. 153A(B) OF THE INCOME-T AX ACT, 1961 (IN SHORT THE ACT). 2. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE AS SESSEE AT THE OUTSET POINTED OUT THAT THE TAX EFFECT IN THE PRESENT APPE AL IS BELOW THE LIMIT OF RS.10 LAKHS AND CONSEQUENTLY, THE APPEAL FILED BY THE REV ENUE IS TO BE DISMISSED, IN VIEW OF THE CBDTS CIRCULAR NO.21/2015, DATED 10.12 .2015, WHERE IT HAS BEEN ANNOUNCED THAT SUBJECT TO CERTAIN INSTRUCTIONS, WHI CH ARE NOT RELEVANT TO THE PRESENT CASE, NO DEPARTMENTAL APPEAL WOULD BE FILED AGAINST THE RELIEF GIVEN BY THE CIT(A) BEFORE THE TRIBUNAL, UNLESS THE TAX EFFE CT EXCLUDING INTEREST 2 ITA NO.1258/PN/2010 EXCEEDS RS.10 LAKHS. IT IS FURTHER PROVIDED VIDE T HE SAID CIRCULAR ITSELF THAT THE SAID LIMIT WOULD BE APPLICABLE NOT ONLY TO ALL FUTU RE TAX LITIGATIONS BUT EVEN TO THE PENDING APPEALS WHERE THE TAX INVOLVED IN THE A PPEALS DOES NOT EXCEED RS.10 LAKHS AND THE SAME SHALL NOT BE PRESSED OR WI THDRAWN. 3. THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE FAIRLY AGREED TO THE CONTENTION RAISED BY THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE. 4. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE ISSUE ARISING IN THE PRESENT APPEAL IS IN RELATION TO THE ADDITION, WHEREIN THE TAX EFFECT IS LESS THAN RS.10 LAKHS. IN THIS BACKGROUND, WE H AVE TO CONSIDER THE CIRCULAR NO.21/2015 DATED 10.12.2015 OF CBDT. THE CBDT VIDE THE SAID CIRCULAR HAS ANNOUNCED THAT SUBJECT TO CERTAIN EXCEPTIONS, NO DE PARTMENTAL APPEAL WOULD BE FILED AGAINST THE RELIEF GIVEN BY THE CIT(A) BEFORE THE TRIBUNAL, WHERE THE TAX EFFECT EXCLUDING INTEREST DOES NOT EXCEED RS.10 LAK HS. THE SAID INSTRUCTIONS ARE MADE APPLICABLE NOT ONLY TO THE FUTURE APPEALS TO B E FILED BY THE REVENUE BUT EVEN TO THE PENDING APPEALS WHERE THE TAX INVOLVED IN EACH OF THE APPEAL DOES NOT EXCEED RS.10 LAKHS, THE SAME ARE INSTRUCTED NOT TO BE PRESSED OR TO BE WITHDRAWN BY THE REVENUE. IN VIEW THEREOF, WHERE A N APPEAL IS PENDING BEFORE THE TRIBUNAL, IRRESPECTIVE OF THE YEAR TO WH ICH IT RELATES, THE SAID INSTRUCTIONS OF THE CBDT WOULD BE APPLICABLE AND TH E APPEALS OF THE REVENUE PENDING BEFORE THE TRIBUNAL WHERE THE TAX EFFECT IS LESS THAN RS.10 LAKHS WOULD BECOME NULLITY. THE RELEVANT EXTRACT OF THE CIRCUL AR IS AS UNDER :- 3. HENCEFORTH, APPEALS/SLPS SHALL NOT BE FILED IN CASES WHERE THE TAX EFFECT DOES NOT EXCEED THE MONETARY LIMITS GIVEN UNDER:- 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. 3 ITA NO.1258/PN/2010 4. FOR THIS PURPOSE, TAX EFFECT MEANS THE DIFFERE NCE BETWEEN THE TAX ON THE TOTAL INCOME ASSESSED AND THE TAX THAT WOULD HAVE B EEN CHARGEABLE HAD SUCH TOTAL INCOME BEEN REDUCED BY THE AMOUNT OF INCOME IN RESP ECT OF THE ISSUES AGAINST WHICH APPEAL IS INTENDED TO BE FILED (HEREINAFTER REFERRE D TO AS DISPUTED ISSUES). HOWEVER, THE TAX WILL NOT INCLUDE ANY INTEREST THER EON, EXCEPT WHERE CHARGEABILITY OF INTEREST ITSELF IS IN DISPUTE. IN CASE THE CHARGEA BILITY OF INTEREST IS THE ISSUE UNDER DISPUTE, THE AMOUNT OF INTEREST SHALL BE THE TAX EF FECT. 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 EFFE CT WILL MEAN QUANTUM OF PENALTY DELETED OR REDUCED IN THE ORDER TO BE APPEALED AGAI NST. 5. THE ASSESSING OFFICER SHALL CALCULATE THE TAX EF FECT SEPARATELY FOR EVERY ASSESSMENT YEAR IN RESPECT OF THE DISPUTED ISSUES I N THE CASE OF EVERY ASSESSMENT. IF, IN THE CASE OF AN ASSESSEE, THE DISPUTED ISSUES ARI SE IN MORE THAN ONE ASSESSMENT YEAR, APPEAL, CAN BE FILED IN RESPECT OF SUCH ASSES SMENT YEAR OR YEARS IN WHICH THE TAX EFFECT IN RESPECT OF THE DISPUTED ISSUES EXCEED S THE MONETARY LIMIT SPECIFIED IN PARA 3. NO APPEAL SHALL BE FILED IN RESPECT OF AN ASSESSMENT YEAR OR YEARS IN WHICH THE TAX EFFECT IS LESS THAN THE MONETARY LIMIT SPEC IFIED IN PARA 3. IN OTHER WORDS, HENCEFORTH, APPEALS CAN BE FILED ONLY WITH REFERENC E TO THE TAX EFFECT IN THE RELEVANT ASSESSMENT YEAR. HOWEVER, IN CASE OF A COMPOSITE O RDER OF ANY HIGH COURT OF APPELLATE AUTHORITY, WHICH INVOLVES MORE THAN ONE A SSESSMENT YEAR AND COMMON ISSUES IN MORE THAN ONE ASSESSMENT YEAR, APPEAL SHA LL BE FILED IN RESPECT OF ALL SUCH ASSESSMENT YEARS EVEN IF THE TAX EFFECT IS LESS T HAN THE PRESCRIBED MONETARY LIMITS IN ANY OF THE YEAR(S), IF IT IS DECIDED TO FILE APPEAL IN RESPECT OF THE YEAR(S) IN WHICH TAX EFFECT EXCEEDS THE MONETARY LIMIT PRESCRIBED. IN CASE WHERE A COMPOSITE ORDER / JUDGMENT INVOLVES MORE THAN ONE ASSESSEE, EACH ASSE SSEE SHALL BE DEALT WITH SEPARATELY. 5. THE CBDT HAS FURTHER CLARIFIED THAT IN CASE THE DISPUTED ISSUE ARISES IN MORE THAN ONE ASSESSMENT YEAR, THEN THE APPEAL CAN BE FILED IN RESPECT OF SUCH ASSESSMENT YEAR OR YEARS IN WHICH THE TAX EFFECT IN RESPECT OF THE DISPUTED ISSUE EXCEEDS THE MONETARY LIMIT SPECIFIED IN PARA 3 I.E. RS.10 LAKHS BEFORE THE TRIBUNAL. IT IS FURTHER DIRECTED THAT HENCEFORTH, THE APPEALS CAN BE FILED BY THE REVENUE ONLY WITH REFERENCE TO THE TAX EFFECT IN TH E RELEVANT ASSESSMENT YEAR. HOWEVER, IN CASE OF A COMPOSITE ORDER OF ANY HIGH C OURT OR APPELLATE AUTHORITY, WHICH INVOLVES MORE THAN ONE ASSESSMENT YEAR AND COMMON ISSUES IN MORE THAN ONE ASSESSMENT YEAR, THEN APPEAL SHALL BE FILED IN RESPECT OF SUCH ASSESSMENT YEAR, EVEN IF THE TAX EFFECT IS LESS THA N THE PRESCRIBED MONETARY LIMITS IN ANY OF THE YEAR(S), IF IT IS DECIDED TO F ILE APPEAL IN RESPECT OF THE YEAR(S) IN WHICH TAX EFFECT EXCEEDS THE MONETARY LIMIT PRESCRIBED. WHERE A COMPOSITE ORDER / JUDGMENT INVOLVES MORE THAN ONE A SSESSEE, THEN EACH ASSESSEE SHALL BE DEALT WITH SEPARATELY. IT IS ALS O PROVIDED FURTHER VIDE PARA 6 THAT WHERE THE APPEAL BEFORE THE TRIBUNAL WAS NOT F ILED ONLY ON ACCOUNT OF TAX EFFECT BEING LESS THAN SPECIFIED MONETARY LIMIT, TH EN THE INCOME-TAX 4 ITA NO.1258/PN/2010 DEPARTMENT SHALL NOT BE PRECLUDED FROM FILING AN AP PEAL AGAINST THE DISPUTED ISSUES IN THE CASE OF THE SAME ASSESSEE FOR ANY OTH ER ASSESSMENT YEAR, OR IN CASE OF ANY OTHER ASSESSEE FOR THE SAME OR ANY OTHER ASS ESSMENT YEAR, IF THE TAX EFFECT EXCEEDS THE SPECIFIED MONETARY LIMITS. THE CBDT HAS FURTHER VIDE PARA 8 SPECIFIED THE ISSUE WHICH SHOULD BE CONTESTED ON MERITS NOTWITHSTANDING THAT THE TAX EFFECT ENTAILED IS LESS THAN THE MONETARY L IMITS SPECIFIED. FURTHER, THE SPECIFIED MONETARY LIMITS AS PER PARA 9 WOULD NOT A PPLY TO WRIT MATTERS AND DIRECT TAX MATTERS OTHER THAN INCOME TAX AND ALSO I S NOT APPLICABLE TO THE APPEALS WHERE TAX EFFECT IS NOT QUANTIFIABLE OR NOT INVOLVED, SUCH AS THE CASE OF REGISTRATION OF TRUSTS OR INSTITUTIONS UNDER SECTIO N 12A OF THE ACT. IN SUCH CASES, THE DECISION TO FILE AN APPEAL IS TO BE TAKE N ON THE MERITS OF A PARTICULARS CASE. THE PARAS 6 TO 9 OF THE CIRCULAR READ AS UND ER :- 6. IN A CASE WHERE APPEAL BEFORE A TRIBUNAL OR A C OURT IS NOT FILED ONLY ON ACCOUNT OF THE TAX EFFECT BEING LESS THAN THE MONET ARY LIMIT SPECIFIED ABOVE, THE COMMISSIONER OF INCOME-TAX SHALL SPECIFICALLY RECOR D THAT EVEN THOUGH THE DECISION IS NOT ACCEPTABLE, APPEAL IS NOT BEING FILED ONLY O N THE CONSIDERATION THAT THE TAX EFFECT IS LESS THAN THE MONETARY LIMIT SPECIFIED IN THIS INSTRUCTION. IN SUCH CASES, THERE WILL BE NO PRESUMPTION THAT THE INCOME-TAX DE PARTMENT HAS ACQUIESCED IN THE DECISION ON THE DISPUTED ISSUES. THE INCOME-TAX DE PARTMENT SHALL NOT BE PRECLUDED FROM FILING AN APPEAL AGAINST THE DISPUTED ISSUES I N THE CASE OF THE SAME ASSESSEE FOR ANY OTHER ASSESSMENT YEAR, OR IN THE CASE OF ANY OT HER ASSESSEE FOR THE SAME OR ANY OTHER ASSESSMENT YEAR, IF THE TAX EFFECT EXCEEDS TH E SPECIFIED MONETARY LIMITS. 7. IN THE PAST, A NUMBER OF INSTANCES HAVE COME TO THE NOTICE OF THE BOARD, WHEREBY AN ASSESSEE HAS CLAIMED RELIEF FROM THE TRI BUNAL OR THE COURT ONLY ON THE GROUND THAT THE DEPARTMENT HAS IMPLICITLY ACCEPTED THE DECISION OF THE TRIBUNAL OR COURT IN THE CASE OF THE ASSESSEE FOR ANY OTHER ASS ESSMENT YEAR OR IN THE CASE OF ANY OTHER ASSESSEE FOR THE SAME OR ANY OTHER ASSESSMENT YEAR, BY NOT FILING AN APPEAL ON THE SAME DISPUTED ISSUES. THE DEPARTMENTAL REPRESE NTATIVES/COUNSELS MUST MAKE EVERY EFFORT TO BRING TO THE NOTICE OF THE TRIBUNAL OR THE COURT THAT THE APPEAL IN SUCH CASES WAS NOT FILED OR NOT ADMITTED ONLY FOR THE RE ASON OF THE TAX EFFECT BEING LESS THAN THE SPECIFIED MONETARY LIMIT AND, THEREFORE, N O INFERENCE SHOULD BE DRAWN THAT THE DECISIONS RENDERED THEREIN WERE ACCEPTABLE TO T HE DEPARTMENT. ACCORDINGLY, THEY SHOULD IMPRESS UPON THE TRIBUNAL OR THE COURT THAT SUCH CASES DO NOT HAVE ANY PRECEDENT VALUE. AS THE EVIDENCE OF NOT FILING APP EAL DUE TO THIS INSTRUCTION MAY HAVE TO BE PRODUCED IN COURTS, THE JUDICIAL FOLDERS IN THE OFFICE OF CSIT MUST BE MAINTAINED IN A SYSTEMIC MANNER FOR EASY RETRIEVAL. 8. ADVERSE JUDGMENTS RELATING TO THE FOLLOWING ISSU ES SHOULD BE CONTESTED ON MERITS NOTWITHSTANDING THAT THE TAX EFFECT ENTAILED IS LESS THAN THE MONETARY LIMITS SPECIFIED IN PARA 3 ABOVE OR THERE IS NO TAX EFFECT : (A) WHERE THE CONSTITUTIONAL VALIDITY OF THE PROVIS IONS OF AN ACT OR RULE ARE UNDER CHALLENGE, OR (B) WHERE BOARDS ORDER, NOTIFICATION, INSTRUCTION OR CIRCULAR HAS BEEN HELD TO BE ILLEGAL OR ULTRA VIRES, OR 5 ITA NO.1258/PN/2010 (C) WHERE REVENUE AUDIT OBJECT IN THE CASE HAS BEEN ACCEPTED BY THE DEPARTMENT, OR (D) WHERE THE ADDITION RELATES TO UNDISCLOSED FOREI GN ASSETS / BANK ACCOUNTS. 9. THE MONETARY LIMITS SPECIFIED IN PARA 3 ABOVE SH ALL NOT APPLY TO WRIT MATTERS AND DIRECT TAX MATTERS OTHER THAN INCOME TAX. FILI NG OF APPEALS IN OTHER DIRECT TAX MATTERS SHALL CONTINUE TO BE GOVERNED BY RELEVANT P ROVISIONS OF STATUTE & RULES. FURTHER, FILING OF APPEAL IN CASES OF INCOME TAX, W HERE THE TAX EFFECT IS NOT QUANTIFIABLE OR NOT INVOLVED, SUCH AS THE CASE OF R EGISTRATION OF TRUSTS OR INSTITUTIONS UNDER SECTION 12A OF THE IT ACT, 1961, SHALL NOT BE GOVERNED BY THE LIMITS SPECIFIED IN PARA 3 ABOVE AND DECISION TO FILE APPEAL IN SUCH CASES MAY BE TAKEN ON MERITS OF A PARTICULAR CASE. 6. THE RETROSPECTIVE OPERATION OF THE INSTRUCTIONS TO PENDING APPEALS IS PROVIDED IN PARA 10 OF THE CIRCULAR, WHICH READS AS UNDER :- 10. THIS INSTRUCTION WILL APPLY RETROSPECTIVELY TO PENDING APPEALS AND APPEALS TO BE FILED HENCEFORTH IN HIGH COURTS / TRIBUNALS. PE NDING APPEALS BELOW THE SPECIFIED TAX LIMITS IN PARA 3 ABOVE MAY BE WITHDRAWN / NOT P RESSED. APPEALS BEFORE THE SUPREME COURT WILL BE GOVERNED BY THE INSTRUCTIONS ON THIS SUBJECT, OPERATIVE AT THE TIME WHEN SUCH APPEAL WAS FILED. 7. IN VIEW OF THE ABOVE SAID INSTRUCTIONS OF CBDT I N THE APPEAL WHERE THE TAX EFFECT IS LESS THAN RS.10 LAKHS, THE APPEAL FIL ED BY THE REVENUE, WHICH IS PENDING BEFORE THE TRIBUNAL IS NOT TO BE PRESSED OR WITHDRAWN BY THE REVENUE. SINCE THE TAX EFFECT IN THE PRESENT APPEAL FILED BY THE REVENUE IS ADMITTEDLY LESS THAN RS.10 LAKHS, THEREFORE, IN VIEW OF THE IN STRUCTIONS OF CBDT AND THE ENTIRETY OF FACTS, WE DISMISS THE APPEAL FILED BY T HE REVENUE AS NOT MAINTAINABLE. 8. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED ON THIS 24 TH DAY OF FEBRUARY, 2016. SD/- SD/- ( SUSHMA CHOWLA ) ( PRADIP KUMAR KEDIA ) / JUDICIAL MEMBER # / ACCOUNTANT MEMBER PUNE ; DATED : 24 TH FEBRUARY, 2016. 6 ITA NO.1258/PN/2010 % & '() *)' / COPY OF THE ORDER IS FORWARDED TO : 1) THE ASSESSEE; 2) THE DEPARTMENT; 3) THE CIT(A)-IV, PUNE; 4) THE CIT-CENTRAL, PUNE; 5) THE DR A BENCH, I.T.A.T., PUNE; 6) GUARD FILE. %+ / BY ORDER , ' # //TRUE COPY// $ %& # '( / SR. PRIVATE SECRETARY ) '* , / ITAT, PUNE