Income TAx Officer Ward-2 , Chikkamangalur V. M/s Primary Agriculture Credit Co-operative Society , Chikamangalur

ITA 1288/BANG/2018

• Counselvise Citation: [2018] 123 COUNSELVISE.COM (IT) 0783 (ITAT-BANGALORE)
• Duration Of Justice: 5 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-10-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2015-2016
• Appeal Filed On: 20-04-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRIYADARSHI MISHRA
• Keywords: Additional evidence; Tax effect
• Section: 131; 268A; 20

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC - C BENCH : BANGALORE BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER ITA NO. 1 2 8 8 /BANG/201 8 ASSESSMENT YEAR : 20 1 5 - 1 6 INCOME-TAX OFFICER, WARD 2, CHIKAMAGALUR, OLD S.B.M. ROAD, NEAR COURT, CHIKAMAGALUR - 577 101. VS. M/S. PRIMARY AGRICULTURE CREDIT CO- OPERATIVE SOCIETY, SANGAMESHWARPET, DIST. CHIKAMAGALUR 577 136. PAN : AABAP 7905 K APPELLANT RESPONDENT C.O. NO.98/BANG/2018 ASSESSMENT YEAR : 2015 - 16 M/S. PRIMARY AGRICULTURE CREDIT CO-OPERATIVE SOCIETY, SANGAMESHWARPET, DIST. CHIKAMAGALUR 577 136. PAN : AABAP 7905 K VS. INCOME-TAX OFFICER, WARD 2, CHIKAMAGALUR, OLD S.B.M. ROAD, NEAR COURT, CHIKAMAGALUR - 577 101. APPELLANT RESPONDENT REVENUE BY : SHRI. PRIYADARSHI MISHRA, JCIT, SPECIAL RANGE - III ASSESSEE BY : SHRI.MAHESH R. UPPIN, ADVOCATE DATE OF HEARING : 1 4 . 0 8 .201 8 DATE OF PRONOUNCEMENT : 05 . 10 .201 8 O R D E R PER SUNIL KUMAR YADAV, JUDICIAL MEMBER THIS APPEAL IS PREFERRED BY THE REVENUE AGAINST THE ORDER OF THE CIT(A), INTER ALIA , ON FOLLOWING GROUNDS: ITA NO. 1288/BANG/2018 C. O. NO. 98/BANG/2018 PAGE 2 OF 4 1. THE ORDER OF THE LD. CIT (A) IS AGAINST THE FACTS OF THE CASE AND IN LAW. 2. THE LD. CIT(A) ERRED IN ADJUDICATING THE ISSUE WITHOUT APPRECIATING THE FACT THAT THE ASSESSEE SOCIETY INCOME INCLUDES INCOME EARNED OUT OF D CATEGORY MEMBERS WHICH WILL NOT COME UNDER THE PURVIEW OF SECTION 80 P OF THE ACT. 3. THE LD. CIT(A) FAILED TO APPRECIATE THE FACT THAT THE ONUS IS ON THE ASSESSEE SOCIETY TO PROVIDE INFORMATION CALLED BY THE AO WITH REGARD TO THE TRANSACTION DETAILS AND INCOME EARNED OUT OF THE D CATEGORY MEMBERS. 4. THE LD.CIT (A) FAILED TO APPRECIATE THE FACT THAT THE SOCIETY'S CEO STATEMENT U/S 131 OF THE ACT WHEREIN HE CONFIRMED THE EXISTENCE OF D CATEGORY MEMBERS AND ALSO BUSINESS DONE WITH SUCH MEMBERS ALONG WITH REGULAR MEMBERS. 5. THE LD. CIT(A) FAILED TO APPRECIATE THAT THE STATEMENT OF CEO BEFORE THE APPELLATE AUTHORITY IS CONTRADICTORY IN NATURE AND SHOULD HAVE CALLED FOR REMAND REPORT FROM THE AO BEFORE DECIDED THE ISSUE RAISED BY THE ASSESSEE. 6. THE LD. CIT(A) FAILED TO APPRECIATE THE FACT THAT THE RATIO OF DECISION IN THE CASE OF SHRI GURU BILURU GURUBASAVA PATTINA SAHAKARI SANGHA NIYAMITHA REPORTED IN {2014} 369 ITR 0086 (KARNATAKA HC) IS NOT APPLICABLE TO THE FACTS OF THE CASE' 7. THE LD. CIT(A) FAILED TO APPRECIATE THE FACT THAT THE RATIO OF THE DECISION RENDERED BY THE HON'BLE SUPREME COURT IN THE CASE OF M/S CITIZEN CO OPERATIVE SOCIETY VS ACIT , HYDERABAD REPORTED IN 397 ITR 1 IS APPLICABLE TO THE SUCH PORTION OF THE INCOME OF THE SOCIETY 8. THE LD. CIT (A) DECISION BASED ON THE AFFIDAVIT OF THE CEO OF THE SOCIETY IS AGAINST THE FACTS OF THE CASE AND IN LAW. 9. THE LD.CIT (A) ERRED IN COMING TO THE CONCLUSION THAT THE AFFIDAVIT FILED BY THE CEO OF THE SOCIETY IS NOT ADDITIONAL EVIDENCE WITHIN THE MEANING OF RULE 46A OF THE IT ACT, 1961 AS IT RUNS COUNTER TO THE STATEMENT GIVEN BY THE CEO U/S 131 OF THE I T ACT, 1961. 10. FOR THESE AND SUCH OTHER GROUNDS OF APPEAL THAT MAY BE URGED AT THE TIME OF HEARING, THE ORDER OF THE AO MAY BE SUSTAINED AND THAT OF THE LD. CIT(A) BE CANCELLED. 2. AT THE OUTSET, IT IS OBSERVED THAT THE TAX EFFECT INVOLVED IN THIS APPEAL IS BELOW RS.20 LAKHS. THE CBDT, WITH A VIEW TO REDUCE UNNECESSARY LITIGATION ON THEIR PART, HAS ISSUED A CIRCULAR NO. 3/2018 DATED 11 TH JULY, 2018, WHEREIN THEY HAVE REVISED THE MONETARY LIMITS FOR FILING OF APPEALS BY THE DEPARTMENT BEFORE THE INCOME TAX APPELLATE TRIBUNAL, HIGH COURTS AND SUPREME COURT. INSOFAR AS THE TRIBUNAL IS ITA NO. 1288/BANG/2018 C. O. NO. 98/BANG/2018 PAGE 3 OF 4 CONCERNED, THE MONETARY LIMIT SPECIFIED THEREIN IS RS.20 LAKHS AND THE CONCERNED AUTHORITY HAS TO WITHDRAW ITS APPEAL OR IT NEED NOT PRESS THE SAME IF TAX EFFECT IS LESS THAN RS.20 LAKHS. IT IS FURTHER SPECIFIED THAT THE TAX EFFECT INDICATED THEREIN IS APPLICABLE TO ALL PENDING APPEALS, THOUGH THEY ARE FILED BY THE REVENUE PRIOR TO THE ISSUANCE OF THE SAID CIRCULAR. IT WAS ALSO CLARIFIED THAT THE ASSESSING OFFICER HAS TO CALCULATE THE TAX EFFECT SEPARATELY FOR EVERY ASSESSMENT YEAR IN RESPECT OF THE DISPUTED ISSUE/S IN THE CASE OF EVERY ASSESSEE. IF, IN THE CASE OF AN ASSESSEE, THE DISPUTED ISSUE ARISES IN MORE THAN ONE YEAR(S), APPEAL(S) CAN BE FILED IN RESPECT OF SUCH ASSESSMENT YEAR(S) IN WHICH TAX EFFECT IN RESPECT OF THE DISPUTED ISSUE EXCEEDS THE MONETARY LIMIT SPECIFIED. IN OTHER WORDS, IF THERE ARE A NUMBER OF YEARS, IF THE TAX EFFECT IS LESS THAN THE SPECIFIED LIMIT IN ONE YEAR, APPEAL CANNOT BE FILED OR THE SAME HAS TO BE WITHDRAWN FOR THAT YEAR, FOR WANT OF TAX EFFECT. HOWEVER, AN EXCEPTION IS MADE TO THIS DIRECTION WITH REGARD TO A COMBINED ORDER PASSED BY THE FIRST APPELLATE AUTHORITY. IF IN ONE OF THE YEARS THE TAX EFFECT IS MORE THAN RS.20 LAKHS AND THE REVENUE DECIDES TO FILE AN APPEAL, IN RESPECT OF OTHER YEARS COVERED BY THE SAID ORDER ALSO, REVENUE IS ELIGIBLE TO FILE APPEAL, EVEN THOUGH THE TAX EFFECT IN EACH OF THOSE YEARS IS LESS THAN RS.20 LAKHS. IT WAS ALSO CLARIFIED THAT MERELY BECAUSE THE APPEAL IS DISMISSED FOR WANT OF TAX EFFECT, IT DOES NOT COME IN THE WAY OF THE DEPARTMENT IN FILING APPEAL FOR OTHER YEARS(S), AND IT DOES NOT MEAN THAT THE DEPARTMENT HAS ACQUIESCED THE ISSUE. 3. THE ABOVE CIRCULAR WAS SPECIFICALLY MADE APPLICABLE TO ALL PENDING APPEALS. IN THE PRESENT CASE, THE TAX EFFECT ON THE ADDITION IN DISPUTE, WHICH WAS DELETED BY THE CIT(A) BY THE IMPUGNED ORDER IS INDISPUTABLY BELOW 20LAKHS. 4. THE LEGISLATURE IN ITS WISDOM HAS INTRODUCED SECTION 268A OF THE INCOME TAX ACT, 1961, WHEREBY THE BOARD IS EMPOWERED TO ISSUE ORDERS/INSTRUCTIONS/DIRECTIONS TO THE INCOME-TAX AUTHORITIES, FIXING THE MONETARY LIMITS FOR THE PURPOSE OF REGULATING THE FILING OF APPEALS. IN THE LIGHT OF THE CIRCULAR DATED 11.07.2018, ISSUED BY THE CBDT IN EXERCISE OF THE POWERS CONFERRED IN IT BY SUBSECTION (1) OF SECTION 268A, WE ARE OF THE VIEW THAT THE APPEAL FILED HEREIN SHOULD NOT HAVE BEEN PRESSED BY THE REVENUE. THE LEARNED DEPARTMENTAL REPRESENTATIVE FAIRLY ADMITTED THAT THE ITA NO. 1288/BANG/2018 C. O. NO. 98/BANG/2018 PAGE 4 OF 4 REVENUE EFFECT IN THIS APPEAL IS LESS THAN THE PRESCRIBED LIMIT IN PARA-3 OF THE ABOVE CIRCULAR ISSUED BY THE CBDT. HAVING REGARD TO THE CIRCUMSTANCES OF THE CASE, WE DISMISS THE APPEALS OF THE REVENUE. 5. HOWEVER, THE REVENUE IS AT LIBERTY TO MOVE APPROPRIATE APPLICATION/PETITION IN CASE IT IS FOUND THAT THE CASE IS COVERED BY ONE OF THE EXCEPTION(S) CARVED OUT IN THE SAID CIRCULAR. SINCE I HAVE DISMISSED THE REVENUES APPEAL, C.O. FILED BY THE ASSESSEE BECOMES INFRUCTUOUS. 6. IN THE RESULT, THE APPEAL FILED BY THE REVENUE AND C.O. OF THE ASSESSEE ARE DISMISSED. PRONOUNCED IN THE OPEN COURT ON THIS 5 TH DAY OF OCTOBER, 2018. SD/- SD/- BANGALORE. DATED: 5 TH OCTOBER, 2018. /NS/* COPY TO: 1. APPELLANTS 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR 6. GUARD FILE BY ORDER SR. PRIVATE SECRETARY, ITAT, BANGALORE. ( A. K. GARODIA ) (SUNIL KUMAR YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER