ITO, Ward - 27(4), Haldia , Purba Midnapur V. Aainul Mallick , Purba Midnapur

ITA 1316/KOL/2018

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 0458 (ITAT-KOLKATA)
• Duration Of Justice: 3 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-09-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 14-06-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Tax effect

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH SMC K OLKATA [BEFORE HONBLE SHRI SATBEER SINGH GODARA, JM ] ITA NO.1316/KOL/2018 ASSESSMENT YEAR : 2011-12 I.T.O., WARD-27(4) -VERSUS- AAINUL MALLICK HALDIA MIDNAPORE (PAN:AJGP7205C) (APPELLANT) (RESPONDENT) FOR THE APPELLANT: SHRI ANIL KOCHAR, ADVOCATE FOR THE RESPONDENT: SHRI KAPIL MONDAL, JCIT DATE OF HEARING : 17.09.2018. DATE OF PRONOUNCEMENT : 19.09.2018. ORDER PER S.S.GODARA, JM: THIS REVENUES APPEAL FOR ASSESSMENT YEAR 2011-12 A RISES AGAINST THE COMMISSIONER OF INCOME TAX (APPEALS)-7, KOLKTAS OR DER DATED 14.03.2018, PASSED IN CASE NO.211/CIT(A)-7/KOL/WARD-27(4)/16-17 IN PRO CEEDINGS U/S. 143(3)/263 OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT. 2. IT IS SEEN AT THE OUTSET THAT THE TAX EFFECT ON THE DISPUTED ADDITIONS BEFORE US IS LESS THAN RS. 20 LACS IN CASES I.E. LESS THAN THE P RESCRIBED REVISED THRESHOLD LIMIT IN CBDTS LATEST CIRCULAR NO. 3/2018 DATED 11.07.2018. IT WILL BE PERTINENT TO REPRODUCE THE RELEVANT PORTION OF THE SAID CIRCULAR NO. 3/2018 DATED 11.07.2018:- 3 . HENCEFORTH, APPEALS/ SLPS SHALL NOT BE FILED I N CASES WHERE THE TAX EFFECT DOES NOT EXCEED THE MONETARY LIMITS GIVEN HEREUNDER : SL. NO. APPEALS/SLPS IN INCOME-TAX MATTERS MONETARY LIMIT (IN RS) 1. BEFORE APPELLATE TRIBUNAL 20,00,000/- 2. BEFORE HIGH COURT 50,00,000/- 3. BEFORE SUPREME COURT 1,00,00,000/- ITA NO.1316/KOL/2018 A.Y. 2 011-12 ITO, WARD-27(4), KOLKAT VS. AAINUL MALLICK. PAGE 2 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. 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 I N RESPECT OF THE ISSUES AGAINST WHICH APPEAL IS INTENDED TO BE FILED (HEREI NAFTER REFERRED TO AS 'DISPUTED ISSUES). FURTHER, 'TAX EFFECT' SHALL BE TAX INCLUDING APPLICABLE SURCHARGE AND CESS. HOWEVER, THE TAX WILL NOT INCLU DE ANY INTEREST THEREON, EXCEPT WHERE CHARGEABILITY OF INTEREST ITSELF IS IN DISPUTE. IN CASE THE CHARGEABILITY OF INTEREST IS THE ISSUE UNDER DISPUT E, THE AMOUNT OF INTEREST SHALL BE THE TAX EFFECT. IN CASES WHERE RETURNED LOSS IS REDUCED OR ASSESSED AS INCOME, THE TAX EFFECT WOULD INCLUDE NOTIONAL TAX O N DISPUTED ADDITIONS. IN CASE OF PENALTY ORDERS, THE TAX EFFECT WILL MEAN QUANTUM OF PENALTY DELETED OR REDUCED IN THE ORDER TO BE APPEALED AGAINST. 3.1 WE FIND THAT INTENTION BEHIND THE CIRCULAR NO3/ 2018 DATED 11.07.2018 NEEDS TO BE UNDERSTOOD IN THE FOLLOWING PERSPECTIVE:- BY PASSAGE OF TIME, THE MONEY VALUE HAS GONE DOWN, THE COST OF LITIGATION EXPENSES HAS GONE UP, NUMBER OF ASSESSES ON THE FILES OF THE DEPARTM ENT HAVE BEEN INCREASED AND CONSEQUENTLY, THE BURDEN ON THE DEPARTMENT IS ALSO INCREASED TO A TREMENDOUS EXTENT. THE CORRIDORS OF THE SUPERIOR COURTS ARE CHOKED WITH HUGE PENDENCY OF CA SES. IN THIS VIEW OF THE MATTER, THE CBDT HAS RIGHTLY TAKEN A DECISION TO REVISE THE MON ETARY LIMITS IN TUNE WITH THE PRESENT VALUE OF MONEY AND WITH A VIEW TO REDUCE THE LITIGATION A ND OFFERING RELIEF TO SMALL TAX PAYERS. THIS IS ALSO IN VIEW OF THE FACT THAT TIME AND ENER GY OF THE DEPARTMENT COULD BE USED MORE PRODUCTIVELY AND EFFICIENTLY TO CATCH HOLD OF BIG F ISHES, WHO IN TURN WOULD CONTRIBUTE MORE TO THE DEVELOPMENT OF THE COUNTRY. 3.2. ON PERUSAL OF THE CIRCULAR NO. 3/2018 DATED 11 .07.2018 AND THE MATERIALS AVAILABLE ON RECORD, WE DO NOT SEE THIS CASE FALLIN G UNDER ANY OF THE EXCEPTIONS CONTEMPLATED IN THE SAID CIRCULAR PER SE . WE ALSO FIND THAT THIS CIRCULAR MAKES IT VERY CLEAR THAT THE REVISED MONETARY LIMITS SHALL APPLY RETROSPECTIVELY TO PENDING APPEALS AS WELL. H ONBLE APEX COURT IN COMMISSIONER OF CUSTOMS VS IND IAN OIL CORPORATION LTD REPORTED IN 267 ITR 272 (SC) HAS SETTLED THE LAW THAT CBDTS CIRCULARS ARE VERY MUCH BINDING ON REVENUE AUTHORITIES. WE THUS HOLD THAT T HIS REVENUES APPEAL DESERVE TO BE DISMISSED IN TERMS OF LOW TAX EFFECT. WE MAKE IT CL EAR THAT IT SHALL VERY MUCH OPEN FOR THE REVENUE TO SEEK NECESSARY RECTIFICATION IN CASE IT IS FOUND THAT ANY OF THESE APPEALS INVOLVE OPERATIONS OF EXCEPTION CLAUSES IN THE TAX EFFECT CIRCULAR AS PER LAW. ITA NO.1316/KOL/2018 A.Y. 2 011-12 ITO, WARD-27(4), KOLKAT VS. AAINUL MALLICK. PAGE 3 4. THIS REVENUES APPEAL IS DISMISSED FOR INVOLVING LOWER THAN THE PRESCRIBED MINIMUM TAX EFFECT. ORDER PRONOUNCED IN THE OPEN COURT ON 19.09.2018. SD/- (S.S.GODARA) (JUDICIAL MEMBER) DATED : 19.09.2018. [RG SR.PS] COPY OF THE ORDER FORWARDED TO: 1. AAINUL MALLICK, PROP: ANSARI SAW MILL, VILL-BELU N PO-PANSKURA PURBA MIDNAPUR- 721601. 2. I.T.O., WARD-27 (4), KOLKATA. 3. CIT(A)-7, KOLKATA 4. C.I.T.-9, KOLKATA. 5. CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY BY ORDER SENIOR PRIVATE SECR ETARY HEAD OF OFFICE/ D.D.O., ITAT KOLKATA BENCHES