The DCIT, Circle-5(2), Ahmedabad V. M/s. Intas Pharmaceuticals, Ahmedabad

ITA 1312/AHD/2019

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 3045 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 2 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-10-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2012-2013
• Appeal Filed On: 07-08-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Tax effect
• Section: 143(3); 22

Judgement Text

, - IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH D BEFORE SHRI MAHAVIR PRASAD, JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER ./ ITA NO.1229/AHD/2019 ASSTT.YEAR : 2012-13 INTAS PHARMACEUTICALS SINCE MERGED WITH INTAS PHARMACEUTICALS LTD. NR.SOLA BRIDGE, SG HIGHWAY, THALTEJ, AHMEDABAD. PAN : AACFI 0241 H VS ACIT, CIR.5(2) AHMEDABAD. ./ ITA NO.1312 /AHD/2019 ASSTT.YEAR : 2012-13 DCIT, CIR.5(2) AHMEDABAD. VS INTAS PHARMACEUTICALS SINCE MERGED WITH INTAS PHARMACEUTICALS LTD. NR.SOLA BRIDGE, SG HIGHWAY, THALTEJ AHMEDABAD. PAN : AACFI 0241 H / (APPELLANT) / (RESPONDENT) ASSESSEE BY : SHRI VARTIK CHOKSHI, AR REVENUE BY : SHRI ANSHU PRAKASHI, CIT-DR SHRI PURUSHOTTAM KUMAR, SR.DR / DATE OF HEARING : 12/10/2021 /DATE OF PRONOUNCEMENT : 22/10/2021 O R D E R PER AMARJIT SINGH, ACCOUNTANT MEMBER: THESE ARE CROSS APPEALS BY THE ASSESSEE AND THE REVENUE AGAINST ORD ER OF THE LD.CIT(A)- 5, AHMEDABAD DATED 31.5.2019. BOTH THE APPEALS ARE DISPOSED OF BY THIS COMMON ORDER. ITA NO.1229 AND 1312/AHD/2019 - 2 - 2. AT THE OUTSET, IT WAS BROUGHT TO OUR NOTICE THAT THE REVENUE HAS FILED A LETTER DATED 13.10.2021 WHEREIN IT HAS INTERALIA STATED THAT ALTHOUGH TAX EFFECT INVOLVED IN THIS CASE IS RS.NIL, I.E. BE LOW THE MONETARY LIMITED PRESCRIBED BY THE CBDT CIRCULAR NO.8.8.2019, THE DE PARTMENT FILED THE PRESENT APPEAL FOR ADJUDICATING THE SAME ON MERIT. THE LETTER OF THE DEPARTMENT IS PLACED ON RECORD. THIS BEING SO, WE PROCEED TO DISPOSE OF APPEAL OF THE REVENUE FIRSTLY ON THE MAINTAINABI LITY OF THE APPEAL FILED BEFORE THE TRIBUNAL IN VIEW OF THE ABOVE LETTER OF THE REVENUE. 3. ITA NO.1312/AHD/2019 (REVENUES APPEAL) 4. WE HAVE GONE THROUGH THE GROUND OF APPEAL GIVEN IN FORM NO.36 WHEREIN UNDER SR.NO.10 GROUNDS OF APPEAL, IT IS M ENTIONED THAT TAX EFFECT RELATING TO EACH GROUND OF APPEAL IS -, ME ANING THEREBY VIDE LETTER OF SHRI DHARSHAN PRIYADARSHI, ACIT, CIR.2(1) (1), AHMEDABAD DATED 13.10.2021 ADDRESSED TO THE REGISTRY OF THE ITAT IT IS STATED THAT TAX EFFECT INVOLVED IN THE APPEAL OF THE REVENUE IS NIL , BUT THEY WANTED TO CONTEST THE SAME ON MERIT, THEREFORE, APPEAL HAS BE EN FILED BEFORE THE TRIBUNAL. WE REPRODUCE CONTENTS OF THE SAID LETTE R DATED 13.10.2021, AS UNDER: NO.ACIT-2(L)(L)/ABD/ITAT/INTAS/12-13/2021-22 DA TE: 13/10/2021 TO, THE REGISTRAR, INCOME-TAX APPELLATE TRIBUNAL, 'D' BENCH, ABHINAV ARCADE, NR. KOTHAWALA FLATS, PRITAMNAGAR, PALDI, AHMEDABAD SIR, SUB: APPEAL FILED BEFORE THE HON'BLE ITAT, AHMEDABA D IN THE CASE OF M/S. INTAS PHARMACEUTICALS LTD.(ERSTWHILE KNOWN AS INTAS PHARM ACEUTICALS), PAN- AACFI0241H, A.Y. 2012-13 IN ITA NO.!312/AHD/2019(DE PARTMENT' APPEAL) AND ITA NO. 1229/AHD/2019(ASSESSEE'S APPEAL). REF: LETTER NO.CIT(DR)/'D' BENCH/ABD/INTAS PHARM/20 21-22 DTD. 12.10.2021 KINDLY REFER TO THE ABOVE. 2. IN THIS CONNECTION, THIS IS TO STATE THAT IN TH IS CASE, APPEAL WAS FILED BEFORE THE HON'BLE ITAT AGAINST THE ORDER OF THE LD.CIT(A) RED UCING THE NET PROFIT OF THE SIKKIM UNIT OFF APPELLANT TO 31% AND CONSEQUENTLY REDUCING THE CLAI MS OF APPLICANT UNDER CHAPTER VIA OF THE ACT AND HELD THAT DIVERSION OF EXPENDITURE BY A SSESSEE FIRM TO INTAS PHARMACEUTICALS LTD. IS RS. 40,49,18,184/- AS AGAINST RS. 95,08,02,542/- AS HELD BY THE ASSESSING OFFICER IN ORDER U/S. 143(3) OF THE ACT. THE TAX EFFECT INVOLVED IN THIS CASE IS RS. NIL. ALTHOUGH THE TAX EFFECT INVOLVED IN THIS CASE IS RS. NIL WHICH IS BELOW THE MONETARY LIMIT PRESCRIBED BY THE CBDT VIDE CIRCULAR NO. 17/20019 DATED 08.08.2019, THE DE PARTMENT WENT INTO APPEAL BEFORE THE HON'BLE ITAT ON THE MERIT OF THE CASE. ITA NO.1229 AND 1312/AHD/2019 - 3 - 3. SUBMITTED FOR KIND PERUSAL. YOURS FAITHFULLY, (DARSHAN PRIYADARSHI) ASST. COMMISSIONER OF INCOME TAX, ENCL. AS ABOVE. CIRCLE-2(1)(L), AHMEDABAD 5. ADMITTEDLY, TAX EFFECT INVOLVED IN THIS APPEAL I S NIL. CBDT VIDE INSTRUCTION DATED 8.8.2019 PROHIBITED THE REVENUE N OT TO FILE APPEAL BEFORE THE TRIBUNAL WHERE TAX EFFECT INVOLVED IN TH E MATTER APPEAL IS BELOW RS.50 LAKHS. HOWEVER, THERE ARE CERTAIN EXC EPTIONS GIVEN IN THE CIRCULAR WHERE THE REVENUE CAN FILE THE APPEAL BEFO RE THE TRIBUNAL, WITHOUT CONSIDERING THRESHOLD LIMIT PRESCRIBED BY T HE CBDT. THE LD.DR HAS NOT POINTED OUT UNDER WHICH CIRCUMSTANCES, APPE AL OF THE REVENUE CAN BE ADJUDICATED BY THE TRIBUNAL IN VIOLATION OF THE ABOVE CBDT CIRCULAR, DESPITE KNOWING THAT TAX EFFECT INVOLVED IN THE APPEAL IS NIL. BEFORE US, THE LD.DR WAS UNABLE TO DEFEND CONTENTS OF THE LETTER DATED 13.10.2021 FOR ADJUDICATING THE ISSUE ON MERIT. T HEREFORE, WE DISMISS THE APPEAL OF THE REVENUE AT THE THRESHOLD BEING NO T MAINTAINABLE DUE TO LOW TAX EFFECT. 6. NOW WE TAKE UP ASSESSEES CROSS APPEAL. 7. THE LD.COUNSEL FOR THE ASSESSEE SUBMITTED THAT I N VIEW OF NON- MAINTAINABILITY OF APPEAL OF THE REVENUE DUE TO LOW TAX EFFECT, AND CONSEQUENT DISMISSAL THEREOF, HE DOES NOT PRESS THE ASSESSEES CROSS APPEAL FOR ADJUDICATION, AND THEREFORE, THE SAME MA Y BE DISMISSED ACCORDINGLY. 9. IN VIEW OF THE ABOVE SUBMISSIONS OF THE ASSESSEE , WE DISMISS THE APPEAL OF THE ASSESSEE. 10. IN THE RESULT, THE APPEAL OF THE REVENUE IS DIS MISSED DUE TO LOW TAX AND APPEAL OF THE ASSESSEE IS DISMISSED DUE TO NON- PROSECUTION. PRONOUNCED IN THE OPEN COURT ON 22 ND OCTOBER, 2021 SD/- SD/- (MAHAVIR SINGH) JUDICIAL MEMBER (AMARJIT SINGH) ACCOUNTANT MEMBER AHMEDABAD; DATED, 22/10/2021