I.T.O.Ward-1(3), Chandigarh V. M/s ABC Papers Pvt.Ltd., Chandigarh

ITA 128/CHANDI/2020

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 3052 (ITAT-CHANDIGARH)
• Duration Of Justice: 9 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-11-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2016-2017
• Appeal Filed On: 05-02-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Tax effect
• Section: 13; 20

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BE NCH A, CHANDIGARH (VIRTUAL COURT) .., !' # $!, BEFORE: SHRI. N.K.SAINI, VP & SHRI , RAJPAL YADAV, VP ITA NO.128/CHD/2020 ASSESSMENT YEAR : 2016-17 I.T.O. WARD - 1(3) AAYKAR BHAWAN, PLOT NO. 17 2 ND FLOOR, ROOM NO. 225, SECTOR-17- E CHANDIGARH M/S ABC PAPERS PVT. LTD. SCO-18-19 SECOND FLOOR, SECTOR-8B CHANDIGARH (NOW ROOM NO. 1, FIRST FLOOR, TOWER-A GODREJ ETERNIA, PLOT NO. 70, INDUSTRIAL AREA-1,CHANDIGARH PAN NO: AADCA7676C APPELLANT RESPONDENT !' ASSESSEE BY : SHRI VINEET KRISHAN, ADVOCATE #!' REVENUE BY : SMT. MEENAKSHI VOHRA, ADDL. CIT $ %! & DATE OF HEARING : 17/11/2020 '()*! & DATE OF PRONOUNCEMENT : 17/11/2020 $%/ ORDER PER N.K. SAINI, VICE PRESIDENT THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF THE LD. CIT(A) - 1, CHANDIGARH DT. 20-11-2019. 2. DURING THE COURSE OF HEARING THE LD. COUNSEL FOR THE ASSESSEE CONTENDED THAT THE APPEAL FILED BY THE DEPARTMENT IS NOT MAIN TAINABLE IN VIEW OF THE CIRCULAR NO. 17/2019 DT. 08/08/2019 ISSUED BY CBDT WHEREIN THE MONETARY LIMIT FOR FILING THE APPEALS BY THE DEPARTMENT BEFORE THE ITAT HAS BEEN INCREASED TO RS. 50,00,000/- FROM RS. 20,00,000/-. 3. IN THE RIVAL SUBMISSIONS THE LD. CIT DR SUBMITTE D THAT THE CIRCULAR NO. 17/2019 DT. 08/08/2019 IS NOT CLEARLY RETROSPECTIVE IN AS MUCH AS IT SPECIFICALLY 2 STATES IN PARA 4 THAT THE SAID MODIFICATION SHALL COME INTO EFFECT FROM THE DATE OF ISSUE OF THIS CIRCULAR IT WAS STATED THAT THE A FORESAID SENTENCE CLEARLY GIVES AN IMPRESSION THAT THE SAID CIRCULAR IS APPLICABLE AFTER THE DATE MENTIONED THERE IN AND THEREAFTER THE DEPARTMENTAL APPEALS WHICH CO ME IN THE SPECIFIED TAX EFFECT LIMIT WILL NOT BE FILED. THE LD. COUNSEL FOR THE ASSESSEE VEHEMENTLY OPPOSED THE CONTENTION OF THE LD. CIT(DR) AND SAID THAT THE CIRCULAR MUST BE HELD TO HAVE RETROSPECTIVE APPLICATION AND MUST EQU ALLY APPLY TO THE PENDING APPEALS AS WELL, SINCE THE PRESENT CIRCULAR ONLY MO DIFIES THE MONETARY LIMIT EARLIER MENTIONED IN CIRCULAR NO. 3 OF 2018 DT. 11/ 07/2018. 4. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE P ARTIES AND CAREFULLY GONE THROUGH THE MATERIAL AVAILABLE ON THE RECORD. IN THE PRESENT CASE IT IS AN ADMITTED FACT THAT THE CBDT VIDE CIRCULAR NO. 17/20 19 ENHANCED THE MONETARY LIMIT TO RS. 50,00,000/- FOR NOT FILING THE APPEAL BY THE DEPARTMENT BEFORE THE ITAT, EARLIER THIS LIMIT WAS SPECIFIED AT RS. 20,00 ,000/- IN THE ORIGINAL CIRCULAR NO. 03/2018 DT. 11/07/2018. NOW VIDE THE NEW CIRCULAR N O. 17/2019 DT. 08/08/2019 THE TAX EFFECT LIMIT HAS BEEN ENHANCED AND THIS NEW CIRCULAR DT. 08/08/2019 READ AS UNDER; CIRCULAR NO. - 17 OF 2019 DATE - 8TH AUGUST 2019 FURTHER ENHANCEMENT OF MONETARY LIMITS FOR FILING O F APPEALS BY THE DEPARTMENT BEFORE INCOME TAX APPELLATE TRIBUNAL, HIGH COURTS A ND SLPS/APPEALS BEFORE SUPREME COURT -AMENDMENT TO CIRCULAR 3 OF 2018 - ME ASURES FOR REDUCING LITIGATION. CIRCULAR NO. 3/2018 DATED 11TH JULY 2018 HAS BEEN R EPLACED BY CIRCULAR NO. 17/2019 DATED 8TH AUGUST 2019 TO ENHANCE MONETARY L IMITS FOR FILING OF APPEALS BY THE DEPARTMENT BEFORE INCOME TAX APPELLATE TRIBUNAL , HIGH COURTS AND SLPS/APPEALS BEFORE SUPREME COURT FOR REDUCING LITI GATION. APPEALS/SLPS IN INCOME-TAX MATTERS MONETARY LIMIT (RS.) [PREVIOUS LIMIT) MONETARY LIMIT (RS.) (REVISED LIMIT) BEFORE APPELLATE TRIBUNAL 20,00,000 50,00,000 BEFORE HIGH COURT 50,00,000 1,00.00.000 3 BEFORE SUPREME COURT 1,00,00,000 2.00.00,000 THE ASSESSING OFFICER SHALL CALCULATE THE TAX EFFECT SEPARATELY FOR EVERY ASSESSMENT YEAR IN RESPECT OF THE DISPUTED ISSUES I N THE CASE OF EVERY ASSESSEE. 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 ASSESS MENT YEAR OR YEARS IN WHICH THE TAX EFFECT IN RESPECT OF THE DISPUTED ISSUES EX CEEDS THE MONETARY LIMIT. NO APPEAL SHALL BE FILED IN RESPECT OF AN ASSESSMENT Y EAR OR YEARS IN WHICH THE TAX EFFECT IS LESS THAN THE MONETARY LIMIT FURTHER, EVEN IN THE CASE OF COMPOSITE ORDER OF ANY HIGH COURT OR APPELLATE AUTHORITY WHICH INVOLVES MORE THAN ONE ASSESSMENT Y EAR AND COMMON ISSUES IN MORE THAN ONE ASSESSMENT YEAR, NO APPEAL SHALL BE F ILED IN RESPECT OF AN ASSESSMENT YEAR OR YEARS IN WHICH THE TAX EFFECT IS LESS THAN THE MONETARY LIMIT IN CASE WHERE A COMPOSITE ORDER/ JUDGEMENT INVOLVES MORE THAN ONE ASSESSEE. EACH ASSESSEE SHALL BE DEALT WITH SEPARATELY. 5. FROM THE CONTENTS OF THE AFORESAID CIRCULAR IT I S CRYSTAL CLEAR THAT THE ANOMALY IN THE EARLIER CIRCULAR NO. 3 OF 2018 DT. 1 1/07/2018 AT PAGE 5 HAS BEEN REMOVED AND THE LIMIT SPECIFIED IN PARA 3 OF THE EA RLIER CIRCULAR HAS BEEN ENHANCED. IT IS ALSO NOT IN DISPUTE THAT THE EARLIE R CIRCULAR WAS APPLICABLE RETROSPECTIVELY TO THE PENDING APPEALS / CROSS OBJ ECTIONS AND PARA NOS. 12 & 13 OF THE ORIGINAL CIRCULAR NO. 03/2018 DT. 11/07/2018 READ AS UNDER: 12. IT IS CLARIFIED THAT THE MONETARY LIMIT OF RS. 20 L AKHS FOR FILING APPEALS BEFORE THE IT AT WOULD APPLY EQUALLY TO CROSS OBJECTIONS UNDER SECTION 253(4) OF THE ACT. CROSS OBJECTIONS BELOW THIS MONETARY LIMIT, ALREADY FILED, SHOULD BE PURSUED FOR DISMISSAL AS WITHDRAWN/ NOT PRESSED. FILING OF CROS S OBJECTIONS BELOW THE MONETARY LIMIT MAY NOT BE CONSIDERED HENCEFORTH. SIMILARLY, REFERENCES TO HIGH COURTS AND SLPS/ APPEALS BEFORE SUPREME COURT BELOW THE MONETA RY LIMIT OF RS. 50 LAKHS AND RS. 1 CRORE RESPECTIVELY SHOULD BE PURSUED FOR DISM ISSAL AS WITHDRAWN/ NOT PRESSED. REFERENCES BEFORE HIGH COURT AND SLPS/ APP EALS BELOW THESE LIMITS MAY NOT BE CONSIDERED HENCEFORTH. 13. THIS CIRCULAR WILL APPLY TO SLPS/ APPEALS/ CROSS OB JECTIONS/ REFERENCES TO BE FILED HENCEFORTH IN SCIHCS/TRIBUNAL AND IT SHALL AL SO APPLY RETROSPECTIVELY TO PENDING SLPS/ APPEALS/ CROSS OBJECTIONS/REFERENCES. PENDING APPEALS BELOW THE SPECIFIED TAX LIMITS IN PARE 3 ABOVE MAY BE WITHDRA WN/ NOT PRESSED. 6. NOW THE CBDT SIMPLY ENHANCED THE MONITORY LIMIT AND THE DIRECTIONS GIVEN EARLIER VIDE PARA NOS. 12 & 13 OF THE CIRCULA R NO. 3 / 2018 DT. 11/07/2018 ARE STILL INTACT WHICH IS CRYSTAL CLEAR FROM THE LA NGUAGE OF THE CIRCULAR NO. 17/2019 WHEREIN IT HAS BEEN MENTIONED THAT THERE IS ENHANCE MENT OF MONETARY LIMIT AND 4 AMENDMENT TO CIRCULAR NO. 3 /2018 FOR REDUCING THE LITIGATION. WE THEREFORE ARE OF THE CONFIRMED VIEW THAT THE AMENDED CIRCULAR NO. 17/2019 NOW ISSUED BY THE CBDT IS ALSO APPLICABLE TO THE PENDING APPEALS AS H AS BEEN SPECIFIED IN PARA 13 OF THE ORIGINAL CIRCULAR NO. 3/2018 DT. 11/07/2018 AND THAT THE DEPARTMENT OUGHT NOT HAVE FILED THE APPEALS BEFORE THE ITAT WHERE TH E TAX EFFECT IS RS. 50 LACS OR LESS. FOR THE AFORESAID VIEW WE ARE ALSO FORTIFIED BY THE DECISION DT. 14/08/2019 OF THE COORDINATE BENCH I.E; ITAT, AHMEDABAD BENCH A AHEMDABAD IN ITA NO. 1398/AHD/2004 FOR THE A.Y. 1998-99 IN THE CASE OF I TO, WARD-3(2) AHMEDABAD VS. DINESH MADHAVLAL PATE, AHMEDABAD& OTHERS WHEREI N IT HAS BEEN HELD IN PARA 5 TO 7 AS UNDER: 5. HAVING CONSIDERED THE RIVAL SUBMISSIONS AND HAVI NG PERUSED THE MATERIAL ON RECORD, WE DO NOT HAVE SLIGHTEST OF HESITATION IN HOLDING T HAT THE CONCESSION EXTENDED BY THE CBDT NOT ONLY APPLIES TO THE APPEALS TO BE FILED IN FUTURE BUT IT IS ALSO EQUALLY APPLICABLE TO THE APPEALS PENDING FOR DISPOSAL AS O N NOW. OUR LINE OF REASONING IS THIS. THE CIRCULAR DATED 8 TH AUGUST 2019 IS NOT A STANDALONE CIRCULAR. IT IS TO BE READ IN CONJUNCTION WITH THE CBDT CIRCULAR NO 3 OF 2018 (AN D SUBSEQUENT AMENDMENT THERETO), AND ALL IT DOES IS TO REPLACE PARAGRAPH NOS. 3 AND 5 OF THE SAID CIRCULAR. THIS IS EVIDENT FROM THE FOLLOWING EXTRACTS FROM THE CIRCULAR DATED 8 TH AUGUST 2019: 2. AS A STEP TOWARDS FURTHER MANAGEMENT OF LITIGATI ON, IT HAS BEEN DECIDED BY THE BOARD THAT MONETARY LIMITS FOR FILING OF APPEALS IN INCOME-TAX CASES BE ENHANCED FURTHER THROUGH AMENDMENT IN PARA 3 OF THE CIRCULAR MENTIONED ABOVE AND ACCORDINGLY, THE TABLE FOR MONETARY LIMITS SPECIFIE D IN PARA 3 OF THE CIRCULAR SHALL READ AS FOLLOWS: S.NO. APPEALS/SLPS IN INCOME-TAX MATTERS MONETAR Y LIMIT (RS.) 1 BEFORE APPELLATE TRIBUNAL 50,00,000 2 BEFORE HIGH COURT 1,00,00,000 3 BEFORE SUPREME COURT 2,00,00,000 3. FURTHER, WITH A VIEW TO PROVIDE PARITY IN FILIN G OF APPEALS IN SCENARIOS WHERE SEPARATE ORDER IS PASSED BY HIGHER APPELLATE AUTHORITIES FOR EACH ASSESSMENT YEAR VIS-A-VIS WHERE COMPOSITE ORDER FOR MORE THAN ONE ASSESSMENT YEARS IS PASSED, PARA 5 OF THE CIRCULAR IS SUBSTITU TED BY THE FOLLOWING PARA: '5. THE ASSESSING OFFICER SHALL CALCULATE THE TAX E FFECT SEPARATELY FOR EVERY ASSESSMENT YEAR IN RESPECT OF THE DISPUTED ISSUES I N THE CASE OF EVERY ASSESSEE. IF IN THE CASE OF AN ASSESSEE, THE DISPUTED ISSUES ARISE IN MORE THAN ONE ASSESSMENT YEAR, APPEAL CAN BE FILED IN RESPECT OF SUCH ASSESSMENT YEAR OR YEARS IN WHICH THE TAX EFFECT IN RESPECT OF THE DISPUTED ISSUES EXCEEDS 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 SPECIFIED IN PARA 3. FURTHER, EVEN IN THE CASE OF COMPOSITE ORDE R OF ANY HIGH COURT OR APPELLATE AUTHORITY WHICH INVOLVES MORE THAN ONE AS SESSMENT YEAR AND COMMON ISSUES IN MORE THAN ONE ASSESSMENT YEAR NO APPEAL S HALL BE FILED IN RESPECT OF 5 AN ASSESSMENT YEAR OR YEARS IN WHICH THE TAX EFFECT IS LESS THAN THE MONETARY LIMIT SPECIFIED IN PARA 3. IN CASE WHERE A COMPOSIT E ORDER/ JUDGEMENT INVOLVES MORE THAN ONE ASSESSEE, EACH ASSESSEE SHALL BE DEAL T WITH SEPARATELY' 4. THE SAID MODIFICATIONS SHALL COME INTO EFFECT FROM THE DATE OF ISSUE OF THIS CIRCULAR. 6. CLEARLY, ALL OTHER PORTIONS OF THE CIRCULAR NO. 3 OF 2018 (SUPRA) HAVE REMAINED INTACT. THE PORTION WHICH HAS REMAINED INTACT INCLU DES PARAGRAPH 13 OF THE AFORESAID CIRCULAR WHICH IS AS FOLLOWS: 13. THIS CIRCULAR WILL APPLY TO SLPS/ APPEALS/ CROS S OBJECTIONS/ REFERENCES TO BE FILED HENCEFORTH IN SC/HCS/TRIBUNAL AND IT SHALL ALSO APPLY RETROSPECTIVELY TO PENDING SLPS/ APPEALS/ CROSS OBJECTIONS/REFERENC ES. PENDING APPEALS BELOW THE SPECIFIED TAX LIMITS IN PARE 3 ABOVE MAY BE WIT HDRAWN/ NOT PRESSED. 7. IN VIEW OF THE ABOVE DISCUSSIONS, WE HEREBY HOLD TH AT THE RELAXATION IN MONETARY LIMITS FOR DEPARTMENTAL APPEALS, VIDE CBDT CIRCULAR DATED 8 TH AUGUST 2019 (SUPRA) SHALL BE APPLICABLE TO THE PENDING APPEALS IN ADDITION TO THE APPEALS TO BE FILED HENCEFORTH. 7. IN VIEW OF THE AFORESAID DISCUSSION THE APPEAL F ILED BY THE DEPARTMENT IS DISMISSED. (ORDER PRONOUNCED IN THE OPEN COURT ON 17/11/2020) . SD/- SD/- # $! .., (RJAPAL YADAV ) ( N.K. SAINI) / VICE PRESIDENT / VICE PRESIDENT AG DATE: 17/11/2020 (+! ,-.- COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. $ / CIT 4. $ / 01 THE CIT(A) 5. -2 45&456789 DR, ITAT, CHANDIGARH 6. 8:% GUARD FILE