ITO, Rohtak V. Ms. Priyanka Singhal (Minor), Rohtak

ITA 1304/DEL/2010

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 58768 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 11 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-03-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Next Hearing Date: 07-03-2012
• Assessment Year: 2001-2002
• Appeal Filed On: 25-03-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Gift; Tax effect

Judgement Text

ITA NO. 1304/DEL/2010 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH F NEW DELHI BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER I.T.A. NO. 1304/DEL/2010 A.Y. : 2001-02 ITO, WARD-2, ROHTAK VS. MISS. PRIYNKA SINGHAL (MINOR), THROUGH F.N.G. SHRI RAM AVTAR SINGHAL, C/O M/S SINGLA TRADERS KATH MANDI ROHTAK. (PAN: AFJPS6107C) (APPELLANT ) (RESPONDENT ) ASSESSEE BY : NONE DEPARTMENT BY : SMT. MAMTA KOCHAR, SR. D.R. PER SHAMIM YAHYA: AM THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS), ROHTAK DATE D 18.1.2010 PERTAINING TO ASSESSMENT YEAR 2001-02. 2. THE ISSUE RAISED READS AS UNDER:- IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE L D. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN TREATING THE ASS ESSMENT U/S. 147/148 MADE IN THE CASE OF MINOR DAUGHTER AS INVA LID, WHILE TREATING THE ADDITION OF RS. 510,000/- MADE ON ACCO UNT OF BOGUS GIFT ITA NO. 1304/DEL/2010 2 AS VALID ON MERIT, WITHOUT APPRECIATING THE FACT TH AT THE GIFT WAS RECEIVED BY THE MINOR DAUGHTER AND THE ASSESSMENT W AS MADE CORRECTLY IN HER NAME THROUGH HER FATHER AND NATURA L GUARDIAN SHRI RAM AVTAR SINGHAL. 3. AT THE THRESHOLD, WE NOTE THAT THE TOTAL ADDITI ON MADE IN THIS CASE IS ` 5,10,000/- AND THE TAX EFFECT IN THIS CASE IS BEL OW ` 2 LAKHS, FIXED BY THE CBDT FOR FILING THE APPEAL BEFORE THE TRIBUNAL VIDE INS TRUCTION NO. 5 DATED 16.7.2007. WHILE CONSIDERING THE EFFECT OF CBDT INSTRUCTIONS I N THIS REGARD, ITAT DELHI BENCHES ARE CONSISTENTLY TAKING THE VIEW THAT REVEN UE AUTHORITIES MUST GIVE RESPECT TO THE C.B.D.T. CIRCULARS AND SHOULD NOT FI LE APPEAL IN SMALL AND PETTY CASES. THE WHOLE IDEA OF THE CIRCULAR IS NOT TO WAS TE ENERGY OF THE DEPARTMENT ON SMALL MATTERS AND SAVE IT FOR HIGH-TAX YIELDING CAS ES. 4. IN OUR ABOVE VIEW, WE FIND SUPPORT FROM THE RECE NT DECISION OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF COMMISSIONER OF IN COME TAX VS. PITHWA ENGG. WORKS, [2005] 197 CTR (BOM) 655 : [2005] 276 ITR 51 9 (BOM) WHEREIN THEIR LORDSHIPS FOLLOWING THEIR ORDER IN THE CASE OF CIT VS. CAMCO COLOUR CO. [2002] 173 CTR (BOM) 255 : [2002] 254 ITR 565 (BOM) HELD THAT INSTRUCTION DT. 27 TH MARCH, 2000 REFLECT THE POLICY DECISION TAKEN BY THE BOARD NOT TO RAISE QUESTIONS OF LAW ITA NO. 1304/DEL/2010 3 WHERE THE TAX EFFECT IS LESS THAN THE AMOUNT PRESCR IBED WITH A VIEW TO REDUCE LITIGATIONS BEFORE THE HIGH COURTS AND THE SUPREME COURT. THE SAID CIRCULAR IS BINDING ON THE REVENUE. ONE FAILS TO UNDERSTAND HO W THE REVENUE CAN CONTEND THAT SO FAR AS NEW CASES ARE CONCERNED, THE CIRCULA R ISSUED BY THE BOARD IS BINDING ON THEM AND IN COMPLIANCE WITH THE SAID INSTRUCTION S, THEY DO NOT FILE REFERENCES IF THE TAX EFFECT IS LESS THAN ` 2 LAKHS, BUT THE SAME APPROACH IS NOT ADOPTED WITH RESPECT TO THE OLD REFERRED CASES EVEN IF THE TAX E FFECT IS LEAS THAN ` 2 LAKHS. THERE IS NO LOGIC BEHIND THIS APPROACH. BOARDS CIRCULAR DT. 27 TH MARCH, 2000 IS VERY MUCH APPLICABLE EVEN TO THE OLD REFERENCES WHICH AR E STILL UNDECIDED. THE DEPARTMENT IS NOT JUSTIFIED IN PROCEEDING WITH THE O LD REFERENCES WHEREIN THE TAX IMPACT IS MINIMAL. THUS, THERE IS NO JUSTIFICATION TO PROCEED WITH DECADES OLD REFERENCES HAVING NEGLIGIBLE TAX EFFECT. 5. FOR SIMILAR PROPOSITION, WE ALSO FIND SUPPORT FR OM THE DECISION OF HIGH COURT OF DELHI IN THE CASE OF COMMISSIONER OF INCOM E TAX VS. PRADEEP KUMAR GUPTA, [2007] 207 CTR (DEL) 115 WHEREIN THEIR LORDS HIPS HELD THAT TAX EFFECT BEING LESS THAN ` 2 LAKH, THE APPEAL FILED BY THE REVENUE AGAINST TH E CBDT INSTRUCTION WAS NOT MAINTAINABLE. 6. IN THIS VIEW OF THE MATTER AND RESPECTFULLY FOLL OWING THE DECISIONS (SUPRA), IT IS HELD THAT SINCE THE TAX EFFECT INVOLVED IN THE I NSTANT APPEAL OF THE REVENUE IS ITA NO. 1304/DEL/2010 4 LESS THAN ` 2 LAC, THE SAME IS AGAINST THE INSTRUCTIONS ISSUED BY THE CBDT AND, HENCE, NOT MAINTAINABLE BEFORE THE TRIBUNAL. ACCOR DINGLY, THE APPEAL FILED BY THE REVENUE IS LIABLE TO BE DISMISSED ON THIS GROUND AL ONE AND THE SAME IS DISMISSED ACCORDINGLY. 7. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 07/3/2012. SD/- SD/- [RAJPAL YADAV] [SHAMIM YAHYA] JUDICIAL MEMBER ACCOUNTANT MEMBER DATE 07/3/2012 SRB COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES