DCIT 24(3), MUMBAI V. SURESHCHANDRA SHARMA, MUMBAI

ITA 1329/MUM/2011

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 75751 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-02-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: H
• Next Hearing Date: 07-01-2014
• Assessment Year: 2004-2005
• Appeal Filed On: 14-02-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B P K PANDE
• Keywords: Tax effect
• Section: 260A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL H BENCH, MUMBAI . . , . . , BEFORE SHRI B R MITTAL, JM & SHRI B R BASKARAN , AM ./I.T.A. NO.1329/MUM/2011 ( ' ' ' ' ' '' ' / ASSESSMENT YEAR : 2004-05) THE DY COMMR OF INCOME TAX 24(3),MUMBAI / VS. SURESHCHANDRA SHARMA 2 USHA NIKETAN OPP STN. PIOUS COLLEGE AAREY ROAD GOAREGAN (E) MUMBAI 63I ./PAN : AAEP55964M ( % /APPELLANT ) ( &'% / RESPONDENT ) % ( / APPELLANT BY : SHRI B P K PANDE &'% ( / RESPONDENT BY : NONE ( + /DATE OF HEARING : 27.02.2014 ( + / DATE OF PRONOUNCEMENT :27 TH FEB 2014 / O R D E R PER B R BASKARAN, AM : THE APPEAL FILED BY THE REVENUE IS DIRECTED AGAINST THE ORDER DATED 14.12.2010 PASSED BY LD 2004-05. THE REVENUE IS ASSAILING THE DECIS ION OF LD CIT(A) IN DELETING THE PENALTY OF RS.2,36,270/- LEVIED BY THE AO U/S 271(1)(C) OF THE ACT. NONE APPEARED ON BEHALF OF THE ASSESSEE AND HENCE WE PROCEED TO HEAR THE APPEAL EX -PARTE. 2. THE LD D.R SUBMITTED THAT THE ASSESSING OFFICER, DURING THE COURSE OF ASSESSMENT PROCEEDING, NOTICED NEGATIVE CASH BALANCE OF RS.7,1 5,965/- AND ADDED THE SAME TO THE TOTAL INCOME OF THE ASSESSEE, SINCE THE ASSESSEE COULD NO T PROPERLY EXPLAIN THE REASONS FOR THE NEGATIVE CASH BALANCE. THEREAFTER THE AO LEVIED A PENALTY OF RS.2,36,270/- EQUIVALENT TO ITA NO.1329 MUM 2011 2 100% TAX SOUGHT TO BE EVADED ON THE ABOVE SAID ADDI TION. THE LD D.R SUBMITTED THAT THE LD CIT(A) WAS NOT JUSTIFIED IN DELETING THE PENALTY . 3. SINCE THE TAX EFFECT WAS LESS THAN RS.3.00 LAKHS , A SPECIFIC QUERY WAS PUT TO THE LD D.R ABOUT THE APPLICABILITY OF MONETARY LIMITS FIXE D BY THE CBDT FOR FILING APPEALS BEFORE THE ITAT. THE LD D.R FAIRLY CONCEDED THAT THE IMPUGNED APPEAL WOULD BE HIT BY THE CIRCULAR NO.3 OF 2011 DATED 09-02-2011. 4. WE FEEL IT NECESSARY TO EXTRACT RELEVANT PORTI ONS OF THE INSTRUCTION NO.3 REFERRED ABOVE. INSTRUCTION NO. 3/2011 [F. NO. 279/MISC. 142/2007- ITJ], DATED 9-2-2011 REFERENCE IS INVITED TO BOARD'S INSTRUCTION NO. 5/2 008 DATED 15-5-2008 WHEREIN MONETARY LIMITS AND OTHER CONDITIONS FOR FILING DEP ARTMENTAL APPEALS (IN INCOME-TAX MATTERS) BEFORE APPELLATE TRIBUNAL, HIGH COURTS AND SUPREME COURT WERE SPECIFIED. 2. IN SUPERSESSION OF THE ABOVE INSTRUCTION, IT HAS BE EN DECIDED BY THE BOARD THAT DEPARTMENTAL APPEALS MAY BE FILED ON MERITS BEFORE APPELLATE TRIBUNAL, HIGH COURTS AND SUPREME COURT KEEPING IN VIEW THE MONETARY LIMI TS AND CONDITIONS SPECIFIED BELOW. 3. HENCEFORTH APPEALS SHALL NOT BE FILED IN CASES WHER E THE TAX EFFECT DOES NOT EXCEED THE MONETARY LIMITS GIVEN HEREUNDER: S. NO. APPEALS IN INCOME-TAX MATTERS MONE TARY LIMIT (IN RS.) 1. APPEAL BEFORE APPELLATE TRIBUNAL 3,00,000 2. APPEAL U/S 260A BEFORE HIGH COURT 1 0,00,000 3. APPEAL BEFORE SUPREME COURT 25,00,000 IT IS CLARIFIED THAT AN APPEAL SHOULD NOT BE FILED MERELY BECAUSE THE TAX EFFECT IN A CASE EXCEEDS THE MONETARY LIMITS PRESCRIBED ABOVE. FILIN G OF APPEAL IN SUCH CASES IS TO BE DECIDED ON MERITS OF THE CASE. 4. FOR THIS PURPOSE, TAX EFFECT MEANS THE DIFFERENCE BETWEEN THE TAX ON THE TOTAL INCOME ASSESSED AND THE TAX THAT WOULD HAVE BEEN CH ARGEABLE HAD SUCH TOTAL INCOME BEEN REDUCED BY THE AMOUNT OF INCOME IN RESPECT OF THE ISSUES AGAINST WHICH APPEAL IS INTENDED TO BE FILED (HEREINAFTER REFERRED TO AS 'DISPUTED ISSUES'). HOWEVER THE TAX WILL NOT INCLUDE ANY INTEREST THEREON, EXCEPT WHERE CHARGEABILITY OF INTEREST ITSELF IS IN DISPUTE. IN CASE THE CHARGEABILITY OF INTEREST IS T HE ISSUE UNDER DISPUTE, THE AMOUNT OF INTEREST SHALL BE THE TAX EFFECT. IN CASES WHERE RE TURNED LOSS IS REDUCED OR ASSESSED AS INCOME, THE TAX EFFECT WOULD ITA NO.1329 MUM 2011 3 INCLUDE NOTIONAL TAX ON DISPUTED ADDITIONS. IN CASE OF PENALTY ORDERS, THE TAX EFFECT WILL MEAN QUANTUM OF PENALTY DELETED OR REDU CED IN THE ORDER TO BE APPEALED AGAINST. 5. IN THE INSTANT CASE, THE APPEAL HAS BEEN FIL ED BY THE DEPARTMENT ON 14.02.2011 AND HENCE THE INSTRUCTION NO.3 OF 2011 SHALL BE APPLICA BLE. IT IS A SETTLED PROPOSITION THAT THE CIRCULARS ISSUED BY THE CBDT IS BINDING ON THE TAX AUTHORITIES. HENCE, THE IMPUGNED APPEAL IS AGAINST THE MANDATE OF THE INSTRUCTION NO.3 (REF ERRED ABOVE). ACCORDINGLY, WE HOLD THAT THIS APPEAL IS NOT MAINTAINABLE AND ACCORDINGLY DIS MISS THE SAME IN LIMINE. 6. IN THE RESULT, THE APPEAL FILED BY THE REVEN UE IS DISMISSED. / ( / ( ORDER PRONOUNCED IN THE OPEN COURT ON 27 TH FEB 2014 . ( 27TH, FEB 2014 ( SD/ SD/- ( B R MITTAL ) ( B R BASKARAN ) / JUDICIAL MEMBER /ACCOUNTANT MEMBER MUMBAI; 6 DATED 27 TH FEB 2014 . . ./ RAJ , SR. PS ITA NO.1329 MUM 2011 4 ( (( ( &7 &7 &7 &7 87 87 87 87 /COPY OF THE ORDER FORWARDED TO : 1. % / THE APPELLANT 2. &'% / THE RESPONDENT. 3. 9 ( ) / THE CIT(A)- 4. 9 / CIT 5. 7 & , , / DR, ITAT, MUMBAI 6. ' / GUARD FILE. / BY ORDER, '7 & //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI