ITO, WD-2(1), SILIGURI, Darjeeling V. M/s Tanban Commercial (P) Ltd., Siliguri

ITA 1350/KOL/2015

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 1719 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 9 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-08-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2010-2011
• Appeal Filed On: 05-11-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DAVID Z CHOWNGTHU ADD L CIT LD
• Keywords: Audit objection; Tax effect

Judgement Text

1 ITA NO. 1350/KOL/2015-T.E IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH: KOL KATA BEFORE: SHRI J.SUDHAKAR REDDY, ACCOUNTANT MEMBER AND SHRI S.S. VISWANETHRA RAVI, JUDICIA L MEMBER I.T.A NO. 1350/KOL/2015 ASSESSMENT YEAR: 2010-11 INCOME-TAX OFFICER WARD 2(1), SILIGURI. APPELLANT VS M/S. TANBAN COMMERCIAL PVT. LTD. PAN: AACT9746P. RESPONDENT FOR THE APPELLANT : SHRI DAVID Z. CHOWNGTHU, ADD L.CIT, LD.SR.DR FOR THE RESPONDENT : NONE APPEARED. DATE OF HEARING : 21-08-2017 DATE OF PRONOUNCEMENT : 21-08-2017 ORDER SHRI S.S.VISWANETHRA RAVI, JM: THIS APPEAL BY REVENUE IS ARISING OUT OF ORDER DATE D 14-09- 2015 OF CIT(A), SILIGURI FOR THE ASSESSMENT YEAR 2 010-11. 2. IT IS SEEN FROM THE PERUSAL OF THE RECORDS THA T THE TOTAL TAX EFFECT ON THE DELETION OF PENALTY IMPOSED U/SEC 271 D OF THE ACT, WHICH CHALLENGED BY THE REVENUE BEFORE US IS ADMITT EDLY BELOW THE TAX EFFECT LIMIT PRESCRIBED BY CBDT VIDE CIRCULAR N O. 21 / 2015 DATED 10.12.2015 FOR PREFERRING APPEAL(S) BEFORE TRIBUNA L BY THE REVENUE. IT WILL BE PERTINENT TO REPRODUCE THE RELEVANT PORT ION OF THE SAID CIRCULAR NO. 21 / 2015 DATED 10.12.2015 :- 3. HENCEFORTH, APPEALS / SLPS SHALL NOT BE FILED IN CASES WHERE THE TAX EFFECT DOES NOT EXCEED THE MONETARY L IMITS GIVEN HEREUNDER:- 2 ITA NO. 1350/KOL/2015-T.E S.NO. APPEALS IN INCOME TAX MATTERS MONETARY LIMIT (IN RS) 1 BEFORE APPELLATE TRIBUNAL 10,00,000/- 2 BEFORE HIGH COURT 20,00,000/- 3 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 MONETA RY 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 TH E TAX THAT WOULD HAVE BEEN CHARGEABLE HAD SUCH TOTAL INCO ME 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). H OWEVER, THE TAX WILL NOT INCLUDE ANY INTEREST THEREON, EXCE PT 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 CAS ES WHERE RETURNED LOSS IS REDUCED OR ASSESSED AS INCOME, THE TAX EFFECT WOULD INCLUDE NOTIONAL TAX ON DISPUTED ADDIT IONS. IN CASE OF PENALTY ORDERS, THE TAX EFFECT WILL MEAN Q UANTUM OF PENALTY DELETED OR REDUCED IN THE ORDER TO BE AP PEALED AGAINST. 5. THE ASSESSING OFFICER SHALL CALCULATE THE TAX EF FECT SEPARATELY FOR EVERY ASSESSMENT YEAR IN RESPECT OF THE DISPUTED ISSUES IN THE CASE OF EVERY ASSESSEE. IF, IN THE CASE OF AN ASSESSEE, THE DISPUTED ISSUES ARISE IN M ORE THAN ONE ASSESSMENT YEAR, APPEAL, CAN BE FILED IN RESPEC T OF SUCH ASSESSMENT YEAR OR YEARS IN WHICH THE TAX EFFE CT IN RESPECT OF THE DISPUTED ISSUES EXCEEDS THE MONETARY LIMIT SPECIFIED IN PARA 3. NO APPEAL SHALL BE FILED IN RESPECT OF AN ASSESSMENT YEAR OR YEARS IN WHICH THE TAX EFFECT IS LESS THAN THE MONETARY LIMIT SPECIFIED IN PARA 3. IN OT HER WORDS, HENCEFORTH, APPEALS CAN BE FILED ONLY WITH R EFERENCE TO THE TAX EFFECT IN THE RELEVANT ASSESSMENT YEAR. HOWEVER, IN CASE OF A COMPOSITE ORDER OF ANY HIGH C OURT OR APPELLATE AUTHORITY, WHICH INVOLVES MORE THAN ONE ASSESSMENT YEAR AND COMMON ISSUES IN MORE THAN ONE ASSESSMENT YEAR, APPEAL SHALL BE FILED IN RESPECT O F ALL SUCH ASSESSMENT YEARS EVEN IF THE TAX EFFECT IS LESS T HAN THE PRESCRIBED MONETARY LIMITS IN ANY OF THE YEAR(S), I F IT IS DECIDED TO FILE APPEAL IN RESPECT OF THE YEAR(S) IN WHICH TAX EFFECT EXCEEDS THE MONETARY LIMIT PRESCRIBED. IN CASE 3 ITA NO. 1350/KOL/2015-T.E WHERE A COMPOSITE ORDER / JUDGEMENT INVOLVES MORE T HAN ONE ASSESSEE, EACH ASSESSEE SHALL BE DEALT WITH SEP ARATELY. 8. ADVERSE JUDGEMENTS RELATING TO THE FOLLOWING ISS UES SHOULD BE CONTESTED ON MERITS NOTWITHSTANDING THAT THE TAX EFFECT ENTAILED IS LESS THAN THE MONETARY LIMITS SP ECIFIED IN PARA 3 ABOVE OR THERE IS NO TAX EFFECT: (A) WHERE THE CONSTITUTIONAL VALIDITY OF THE PROVISIONS OF AN ACT OR RULE ARE UNDER CHALLENGE, OR (B) WHERE BOARDS ORDER, NOTIFICATION, INSTRUCTION OR CIRCULAR HAS BEEN HELD TO BE ILLEGAL OR ULTRA VIRES , OR (C) WHERE REVENUE AUDIT OBJECTION IN THE CASE HAS BEEN ACCEPTED BY THE DEPARTMENT, OR (D) WHERE THE ADDITION RELATES TO UNDISCLOSED FOREIGN A SSETS / BANK ACCOUNTS. 10. THIS INSTRUCTION WILL APPLY RETROSPECTIVELY TO PENDING APPEALS AND APPEALS TO BE FILED HENCEFORTH IN HIGH COURTS/ TRIBUNALS. PENDING APPEALS BELOW THE SPECIFIED TAX LIMITS IN PARA 3 ABOVE MAY BE WITHDRAWN / NOT PRESSED. AP PEALS BEFORE THE SUPREME COURT WILL BE GOVERNED BY THE INSTRUCTIONS ON THIS SUBJECT, OPERATIVE AT THE TIME WHEN SUCH APPEAL WAS FILED. 2.1 WE FIND THAT INTENTION BEHIND THE CIRCULAR NO.2 1/2015 DATED 10-12-2015 NEEDS TO BE UNDERSTOOD IN THE FOLLOWING PERSPECTIVE:- 2.2 ON PERUSAL OF THE CIRCULAR NO. 21 / 2015 DATED 10.12.2015 AND THE MATERIALS AVAILABLE ON RECORD, WE COULD NOT SEE WHETHER THE IMPUGNED CASE FALLS UNDER ANY OF THE EXCEPTIONS CON TEMPLATED IN THE SAID CIRCULAR. WE ALSO FIND THAT THE CIRCULAR MAKE S IT VERY CLEAR THAT THE REVISED MONETARY LIMITS SHALL APPLY RETROSPECTI VELY TO PENDING APPEALS ALSO. WE FIND THAT THE CIRCULAR IS BINDING ON THE TAX AUTHORITIES. THIS POSITION HAS BEEN CONFIRMED BY TH E HONBLE APEX COURT IN THE CASE OF COMMISSIONER OF CUSTOMS VS IND IAN OIL CORPORATION LTD REPORTED IN 267 ITR 272 (SC) WHEREIN THEIR LORDSHIPS EXAMINED THE EARLIER DECISIONS OF THE APE X COURT WITH REGARD TO BINDING NATURE OF THE CIRCULARS AND LAID DOWN THAT WHEN A CIRCULAR ISSUED BY THE BOARD REMAINS IN OPERATION T HEN THE REVENUE IS 4 ITA NO. 1350/KOL/2015-T.E BOUND BY IT AND CANNOT BE ALLOWED TO PLEAD THAT IT IS NOT VALID OR THAT IT IS CONTRARY TO THE TERMS OF THE STATUTE. HENCE WE HOLD THAT THE APPEAL(S) OF THE REVENUE DESERVE TO BE DISMISSED IN TERMS OF LOW TAX EFFECT VIDE CIRCULAR NO.21 / 2015 DATED 10.12.2015. ACCORDINGLY, THIS BEING A LOW TAX EFFECT CASE, WE DISMISS THE APPEAL OF THE REVENUE IN LIMINE, AS UNADMITTED, WITHOUT GOING INTO THE MERIT S OF THE CASE. THE APPEAL OF THE REVENUE IS DISMISSED. 3. IN THE RESULT, THE APPEAL OF THE REVENUE IS DIS MISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 21-08-2017 SD/- SD/- J.SUDHAKAR REDDY S.S. VISWANETHRA RAVI ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 21-08-2017 PP(SR.P.S.) COPY OF THE ORDER FORWARDED TO: 1 . APPELLANT THE INCOME TAX OFFICER, WARD 2(1), AAYK AR BHAWAN, B WING, PARIBAHAN NAGAR, MATIGARA, SILIGURI, DIST : DARJEELING-734010. 2 RESPONDENT M/S. TANBAN COMMERCIAL PVT. LTD 215, JATIN DAS SARANI, ASHRAMPARA, SILIGURI. 3 . THE CIT(A), KOLKATA 4. 5. CIT , KOLKATA DR, KOLKATA BENCHES, KOLKATA / TRUE COPY, BY ORDER, SR.PS/H.O.O ITAT, KOLKATA