DCIT, CC-XXII, Kolkata, Kolkata V. M/s. Rachit Securities Pvt. Ltd., Kolkata

ITA 140/KOL/2010

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 2481 (ITAT-KOLKATA)
• Duration Of Justice: 5 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-07-2010
• Appeal Filed By: Department
• Bench Allotted: C
• Next Hearing Date: 05-05-2010
• Assessment Year: 2000-2001
• Appeal Filed On: 22-01-2010
• Court: TRIBUNAL
• Department Lawyers: P K MISHRA
• Assessee Lawyers: A K TIBREWAL
• Keywords: Tax effect

Judgement Text

1 , C , , IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH- C , KO LKATA [ . . . . . . . . , , , , . . . . . . . . !' !' !' !', , , , #$ ] [BEFORE SHRI G.D.AGRAWAL, V.P. & D.K. TYAGI, JUDICIAL MEMBER ] % % % % / ITA NO. 140 (KOL) OF 2010 &'( )* / ASSESSMENT YEAR 2000-01 DY.COMMISSIONER OF INCOME-TAX C.C.-XXIIKOLKATA. M/S. RACHIT PROPERTIES (P) LTD. KOLKATA. (PAN-R-107/CC-XXIII/KOL) (-. / APPELLANT ) - ' - - VERSUS - (1!-./ RESPONDENT ) -. 2 3 / FOR THE APPELLANT: SRI P.K. MISHRA 1!-. 2 3 / FOR THE RESPONDENT: SRI A.K.TIBREWAL # 4 / ORDER ( . . . . . . . . ) , , , , (G.D.AGRAWAL) , VICE-PRESIDENT : THE APPEAL OF THE REVENUE FOR ASSESSMENT YEAR 200 0-01, PRESENTED BEFORE THE TRIBUNAL ON 22.01.2010, IS DIRECTED AGAINST THE ORD ER DATED 01.09.2009 OF C.I.T.(A)-XXX, KOLKATA. IN THIS APPEAL, THE REVENUE HAS AGITATED THE DELETION OF FOLLOWING ADDITIONS :- (I) INCOME FROM HOUSE PROPERTY - RS.1,69,308 (II) BUILDING MAINTENANCE EXPENSES - RS. 44,30 0 (III) GENERAL EXPENSES - RS. 2,140 RS.2,15,748/- ADMITTEDLY, THE TAX EFFECT ON THE SAID ADDITION IS BELOW RS. 2 LAKHS. 2. THE LD. DEPARTMENTAL REPRESENTATIVE WAS ASKED WH Y THE APPEAL OF THE REVENUE SHOULD NOT BE TREATED AS UN-ADMITTED IN VIEW OF CIR CULAR F.NO.279/MISC.-64/05-ITJ DATED 24 TH OCTOBER, 2005 AND THE DECISION OF THE HONBLE BOMBA Y HIGH COURT IN THE CASE OF CIT VS. CAMCO COLOUR CO. [254 ITR 565 (BOM)] AND THE HONBL E APEX COURT IN THE CASE OF COMMISSIONER OF CUSTOMS VS. INDIAN OIL CORPORATION LTD. [267 ITR 272 (SC)]. THE LD. DEPARTMENTAL REPRESENTATIVE CONTENDED THAT THE HON BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF RANI PALIWAL VS. C.I.T. [268 I.T.R. 220 ], AND ALLAHABAD HIGH COURT IN THE CASE OF JUGAL KISHORE ARORA VS. DCIT [269 I.T.R. 133] HAVE TAKEN THE VIEW THAT ONCE AN APPEAL IS FILED BY THE REVENUE, THE TRIBUNAL SHOULD DISPOSE O F THE APPEAL ON MERITS AND THE ASSESSEE CANNOT RAISE THE OBJECTION AGAINST THE MAINTAINABIL ITY OF SUCH APPEAL. 2 3. WE HAVE CAREFULLY CONSIDERED THE ARGUMENTS OF TH E LD. DEPARTMENTAL REPRESENTATIVE AND PERUSED THE MATERIAL PLACED BEFORE US. WE FIND THAT THE CBDT VIDE INSTRUCTION NO.2/2005 DATED 24 TH OCTOBER, 2005 ISSUES GUIDELINES TO THE REVENUE AUT HORITIES WITH REGARD TO FILING OF APPEAL BEFORE THE TRIBUNAL, HIGH COURT AND SUPREME COURT. FROM THE ABOVE INSTRUCTION, IT IS EVIDENT THAT SINCE 1987, THE CBD T IS INSTRUCTING ITS OFFICERS NOT TO FILE THE APPEAL WHERE THE TAX EFFECT IS BELOW CERTAIN MONETA RY LIMITS. VIDE INSTRUCTION NO. 1903 DATED 28 TH OCTOBER, 1992, THE MONETARY LIMIT WAS REVISED UPWA RD AND THE OFFICERS WERE DIRECTED NOT TO FILE THE APPEAL BEFORE THE INCOME-TAX APPELLATE TRIBUNAL WHERE THE TAX EFFECT WAS BELOW RS.25,000/-. THE ABOVE MONETARY LIMIT WAS FURTHER R EVISED UPWARD BY INSTRUCTION NO.1979 DATED 27 TH MARCH, 2000 AND THE OFFICERS WERE DIRECTED NOT TO FILE THE APPEAL TO ITAT WHERE THE TAX EFFECT IS BELOW RS.1 LAC. THEREAFTER IN P ARTIAL MODIFICATION OF THE ABOVE INSTRUCTION, THE BOARD VIDE INSTRUCTION NO.2/2005 DATED 24.10.20 05 HAS FURTHER RAISED THE ABOVE MONETARY LIMIT TO RS. 2 LAKHS WITH THE SAME DIRECTI ONS. THUS, THE CBDT SINCE 1987 HAS NOT ONLY TAKEN A CONSISTENT APPROACH OF INSTRUCTING ITS OFFICERS FOR NOT FILING THE APPEAL WHERE THE TAX EFFECT IS BELOW THE MONETARY LIMIT, BUT SUCH MO NETARY LIMIT IS ALSO REVISED UPWARD FROM TIME TO TIME. THE CIRCULAR UNDER INSTRUCTION NO.197 9 DATED 27.3.2000 WAS CONSIDERED BY THE BOMBAY HIGH COURT IN THE CASE OF CAMCO COLOUR CO. ( SUPRA) AND THEIR LORDSHIPS HELD AT PAGE 568 AS UNDER :- IT APPEARS THAT DESPITE THE ABOVE CIRCULAR, THE RE VENUE HAS CHOSEN TO FILE THE PRESENT APPEAL KNOWING FULLY WELL THAT THE CORRIDORS OF THE COURTS ARE FLOODED WITH PENDING LITIGATIONS. THE PRESENTATION OF THIS APPEAL IS QUI TE CONTRARY TO THE INSTRUCTION ISSUED IN THE CIRCULAR WHICH IS BINDING ON THE REVENUE. IN THE ABOVE VIEW OF THE MATTER, CONSIDERING THE IN STRUCTIONS ISSUED BY THE CENTRAL BOARD OF DIRECT TAXES, WE ARE SATISFIED THAT THE BO ARD HAS TAKEN A POLICY DECISION NOT TO FILE APPEAL IN A TYPE OF CASE IN HAND AND THE SA ME IS FINDING ON THE REVENUE (APPELLANT HEREIN). IN THE RESULT, WE DISMISS THIS APPEAL ON THIS COUNT IN LIMINE WITH NO ORDER AS TO COSTS. 4. THE LD. DEPARTMENTAL REPRESENTATIVE HAS RELIED U PON THE CONTRARY DECISIONS GIVEN BY THE HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF RANI PALIWAL (SUPRA) AND ALLAHABAD HIGH COURT IN THE CASE OF JUGAL KISHORE ARORA (SUPR A). HOWEVER, WE FIND THAT RECENTLY THE APEX COURT HAS CONSIDERED THE EFFECT OF CIRCULAR IS SUED BY THE CBDT IN THE CASE OF COMMISSIONER OF CUSTOMS VS. INDIAN OIL CORPORATION LTD. 267 ITR 272. THEIR LORDSHIPS EXAMINED THE EARLIER DECISIONS OF THE APEX COURT WI TH REGARD TO BINDING NATURE OF THE CIRCULAR AND LAID DOWN THE FOLLOWING PRINCIPLES AT PAGE 277 OF THE REPORTS :- 3 THE PRINCIPLES LAID DOWN BY ALL THESE DECISIONS AR E (1) ALTHOUGH A CIRCULAR IS NOT BINDING ON A COURT O R AN ASSESSEE, IT IS NOT OPEN TO THE REVENUE TO RAISE A CONTENTION THAT IS CONTRARY TO A BINDING CIRCULAR BY THE BOARD. WHEN A CIRCULAR REMAINS IN OPERATION, THE RE VENUE IS BOUND BY IT AND CANNOT BE ALLOWED TO PLEAD THAT IT IS NOT VALID NOR THAT IT IS CONTRARY TO THE TERMS OF THE STATUTE. (2) DESPITE THE DECISION OF THIS COURT, THE DEPARTM ENT CANNOT BE PERMITTED TO TAKE A STAND CONTRARY TO THE INSTRUCTIONS ISSUED BY THE BOARD. (3) A SHOW CAUSE NOTICE AND DEMAND CONTRARY TO EXIS TING CIRCULARS OF THE BOARD ARE AB INITIO BAD. (4) IT IS NOT OPEN TO THE REVENUE TO ADVANCE AN AR GUMENT OR FILE AN APPEAL CONTRARY TO THE CIRCULARS. (EMPHASIS SUPPLIED) FROM THE ABOVE, IT IS EVIDENT THAT THE HONBLE APEX COURT HAS LAID DOWN THAT IT IS NOT OPEN TO THE REVENUE TO ADVANCE AN ARGUMENT OR FILE AN APPEA L CONTRARY TO THE CIRCULAR. THE APPEAL UNDER CONSIDERATION HAS CERTAINLY BEEN FILED CONTRA RY TO THE CIRCULAR ISSUED BY THE CBDT VIDE CIRCULAR F. NO. 279/MISC-64/05-ITJ DATED 24 TH OCTOBER, 2005. THEREFORE, THE ABOVE DECISION OF THE HONBLE APEX COURT WOULD BE SQUARELY APPLICA BLE. EVEN OTHERWISE, THE REVENUE HAS BEEN TAKING A CONSISTENT APPROACH SINCE 1987 NOT TO FILE APPEAL WHERE THE REVENUE EFFECT IS BELOW CERTAIN MONETARY LIMIT TO REDUCE THE LITIGATI ON PENDING BEFORE THE TRIBUNAL AND THE COURTS. IF THE APPEALS CONTRARY TO SUCH CIRCULAR AR E ADMITTED, IT WOULD FRUSTRATE THE PURPOSE OF ISSUING SUCH INSTRUCTIONS. IN THE ABOVE CIRCUMSTANC ES, WE RESPECTFULLY FOLLOWING THE DECISION OF THE HONBLE APEX COURT IN THE CASE OF INDIAN OIL CORPORATION LTD. (SUPRA) AND BOMBAY HIGH COURT IN THE CASE OF CAMCO COLOUR CO. (SUPRA), HOLD THAT THE REVENUE SHOULD NOT HAVE FILED THE APPEAL CONTRARY TO THE CIRCULAR ISSUED BY THE CBDT. ACCORDINGLY, THE SAME IS NOT ADMITTED AND BEING DISMISSED IN LIMINE. 5. IN THE RESULT, THE APPEAL BY THE REVENUE IS DISM ISSED AS UN-ADMITTED. 5 # 4 67 8 7' ' 59 ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- ( (( ( . . . . . . . . !' !' !' !') )) ), , , , #$ ( . . . . . . . . ), (D.K.TYAGI), JUDICIAL MEMBER (G.D.AGRAWAL), VICE-PRESIDENT ( (( (6 6 6 6) )) ) DATE: 13 -07-2010 4 % % % % / ITA NO. 140 (KOL) OF 2010 # 4 2 1&&: :);- COPY OF THE ORDER FORWARDED TO : 1. -. / THE APPELLANT : DCIT, C.C.-XXII, KOLKATA. 2 1!-. / THE RESPONDENT : M/S. RACHIT PROPERTIES (P) LTD., 6 , LYONS RANGE, KOLKATA- 700001. 3. &4' () : THE CIT(A)-XXX, KOLKATA. 4. &4'/ THE CIT, KOL- 4. @&' 1&' / DR, ITAT, KOLKATA BENCHES, KOLKATA 5. GUARD FILE . !: 1&/ TRUE COPY, # 4'7/ BY ORDER, (DKP) / DEPUTY REGISTRAR .