ACIT, Cir - 42, Murshidabad, Murshidabad V. Sandipan Pramanik, Murshidabad

ITA 1387/KOL/2016

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 5902 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 1 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-07-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2011-2012
• Appeal Filed On: 24-06-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Tax effect

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A, BENC H KOLKATA BEFORE SHRI S.S.VISWANETHRA RAVI, JM & DR. A.L. SAI NI, AM ITA NO.1387/KOL/2016 (ASSESSMENT YEAR: 2011-12) A.C.I.T., CIRCLE-42, MURSHIDABAD 39, R.N.TAGORE ROAD, P.O.- BERHAMPORE, DIS.:- MURSHIDABAD, PIN-742101. VS. SANDIPAN PRAMANIK 10, SREE KRISHNA SAHA LANE, P.O.- BERHAMPORE, DIST.: MURSHIDABAD ./ ./PAN/GIR NO. : AFLPP 8878 B ( /APPELLANT ) .. ( / RESPONDENT ) ASSESSEE BY : SHRI SALLONG YADEN, ADDL. CIT, SR .DR REVENUE BY : NONE / DATE OF HEARING : 23/07/2018 /DATE OF PRONOUNCEMENT: 25 /07/2018 / O R D E R PER DR. A. L. SAINI, AM: THE CAPTIONED APPEAL FILED BY THE REVENUE PERTAININ G TO ASSESSMENT YEAR 2011-12, IS DIRECTED AGAINST AN ORDER PASSED BY LD. COMMISSIONER OF INCOME TAX (APPEALS)-12, KOLKATA, DATED 11.03.2016. 2. AT THE OUTSET, IT WAS BROUGHT TO OUR NOTICE BY T HE LD. AR THAT THE APPEAL PREFERRED BY THE REVENUE IS STRUCK BY THE NEW CIRCU LAR OF CBDT I.E. CIRCULAR NO. 3/2018 DATED 11.07.2018, WHEREIN THE CBDT HAS DIREC TED THE DEPARTMENT TO WITHDRAW/NOT PRESS THE APPEAL, BEFORE THE INCOME TA X APPELLATE TRIBUNAL (ITAT), IF THE TAX EFFECT IS LESS THAN RS.20 LACKS. THE CBD T HAS ISSUED CIRCULAR NO. 3/2018 DATED 11.07.2018, WHEREBY THE MONETARY LIMIT S FOR FILING OF APPEALS BY THE DEPARTMENT BEFORE INCOME TAX APPELLATE TRIBUNAL AND HIGH COURTS AND SLP BEFORE SUPREME COURT HAVE BEEN INCREASED AS A MEASU RE FOR REDUCING LITIGATION. THE REVISED MONETARY LIMITS LAID DOWN IN PARA-3 OF THIS CIRCULAR AND THE MANNER OF COMPUTING TAX EFFECT AS LAID DOWN IN PARA-4 OF T HIS CIRCULAR ARE AS FOLLOWS: 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 MONE TARY 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/- SANDIPAN PRAMANIK ITA NO.1387/KOL/2016 ASSESSMENT YEAR: 2011-12 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. FILIN G 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 BEEN CHARGEABL E HAD SUCH TOTAL INCOME BEEN REDUCED BY THE AMOUNT OF INCOME IN RESPECT OF THE I SSUES AGAINST WHICH APPEAL IS INTENDED TO BE FILED (HEREINAFTER REFERRED TO AS 'D ISPUTED ISSUES). FURTHER, 'TAX EFFECT' SHALL BE TAX INCLUDING APPLICABLE SURCHARGE AND CES S. 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 THE ISSUE UNDER DI SPUTE, THE AMOUNT OF INTEREST SHALL BE THE TAX EFFECT. IN CASES WHERE RETURNED LOSS IS RED UCED 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 QUANTUM OF PENALTY DELETED OR REDUCED IN THE ORDER TO BE APPEALED AGAINST. 3. IN PARA-13 OF THE SAID CIRCULAR IT HAS FURTHER BEEN CLARIFIED THAT THE REVISED MONETARY LIMITS WILL APPLY RETROSPECTIVELY. THE RE LEVANT PARA-13 OF THE CIRCULAR READS THUS: 13. THIS CIRCULAR WILL APPLY TO SLPS/APPEALS/CROSS OBJECTIONS/REFERENCES TO BE FILED HENCEFORTH IN SC/HCS/TRIBUNAL AND IT SHALL ALSO APP LY RETROSPECTIVELY TO PENDING SLPS/APPEALS/CROSS OBJECTIONS/REFERENCES. PENDING A PPEALS BELOW THE SPECIFIED TAX LIMITS IN PARA 3 ABOVE MAY BE WITHDRAWN/NOT PRESSED . 4. IN THE PRESENT CASE, THE TAX EFFECT IN THIS APPE AL BY THE REVENUE IS LESS THAN RS.20,00,000/-. THOUGH THIS APPEAL HAD BEEN FILED BY THE REVENUE ON 24.06.2016 AND WAS WITHIN THE MONETARY LIMIT IN THE FORM OF TA X EFFECT FOR FILING APPEALS BEFORE TRIBUNAL, IN VIEW OF PARA-13 OF THE CIRCULAR OF CBDT, EVEN SUCH APPEALS WILL BE GOVERNED BY THE NEW MONETARY LIMITS LAID DO WN IN THE CBDT CIRCULAR NO.3/2018 REFERRED TO ABOVE. 5. IT IS A SETTLED LAW THAT THE CIRCULARS ISSUED BY CBDT ARE BINDING ON THE REVENUE. THIS POSITION WAS CONFIRMED BY THE APEX CO URT IN THE CASE OF COMMISSIONER OF CUSTOMS VS INDIAN OIL CORPORATION L TD. REPORTED IN 267 ITR 272 WHEREIN THEIR LORDSHIPS EXAMINED THE EARLIER DE CISIONS OF THE APEX COURT WITH REGARD TO BINDING NATURE OF THE CIRCULAR AND L AID DOWN THAT WHEN A CIRCULAR ISSUED BY THE BOARD REMAINS IN OPERATION THEN THE R EVENUE IS 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. THE APPEAL UNDER CONSIDERATION HAS CER TAINLY BEEN FILED CONTRARY TO THE CIRCULAR ISSUED BY THE CBDT CIRCULAR NO.3 DATED 11. 07.2018. SANDIPAN PRAMANIK ITA NO.1387/KOL/2016 ASSESSMENT YEAR: 2011-12 3 6. IN THE EVENT, THE REVENUE FINDS AT A LATER POINT OF TIME THAT THE TAX EFFECT IN THE APPEAL IS MORE THAN RS.20 LAKHS OR DESPITE LOW TAX EFFECT THE APPEAL OF THE REVENUE IS MAINTAINABLE, THE REVENUE IS AT LIBERTY TO MOVE THIS TRIBUNAL FOR RECALLING OF THIS ORDER. 7. IN VIEW OF THE ABOVE, WE HOLD THAT THE APPEAL FI LED BY THE DEPARTMENT, AGAINST THE IMPUGNED ORDER OF THE LD. CIT(A), IS CO NTRARY TO THE POLICY DECISION OF THE DEPARTMENT AND AS SUCH THE APPEAL FILED BY T HE DEPARTMENT IS DISMISSED IN LIMINE. 8. IN THE RESULT, THE APPEAL BY THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 25/07/2 018. SD/- (S.S.VISWANETHRA RAVI) SD/- (A. L. SAINI) /JUDICIAL MEMBER / ACCOUNTANT MEMBER /KOLKATA; DATED: 25/07/2018 RG, SR.PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT A.C.I.T., CIRCLE-42, MURSHIDABAD. 2. / THE RESPONDENT- SANDIPAN PRAMANIK 3. ( ) / THE CIT(A)-12, KOLKATA. 4. / CIT 5. ! $$% , % , / DR, ITAT, KOLKATA 6. ( / GUARD FILE. //TRUE COPY// BY ORDER SENIOR PRIVATE SECRETARY, HEAD OF OFFICE/D.D.O, I.T.A.T, KOLKATA BENCHES, KOLKATA .