Income-tax Officer, V. Legal heir in the case of Late Shri Padmakar R. Kibe, Pune

ITA 1443/PUN/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 2867 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 6 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-01-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2006-2007
• Appeal Filed On: 14-07-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUNDHENDU DAS
• Assessee Lawyers: SUNIL PATHAK
• Keywords: Tax effect
• Section: 12A

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE . . , ! , # $ BEFORE SHRI R.K. PANDA, AM AND SHRI VIKAS AWASTHY, JM . / ITA NO.1443/PN/2014 #& & / ASSESSMENT YEAR : 2006-07 ITO, WARD-8 (2), PUNE . / APPELLANT V/S LEGAL HEIR IN THE CASE OF LATE SHRI PADMAKAR R. KIBE, C/O. PAISA FUND GLASS WORKS, CHAKAN TALEGAON ROAD, TALUKA KHED, PUNE 410 501 PAN NO.ABAPK2700Q . / RESPONDENT / ASSESSEE BY : SHRI SUNIL PATHAK / REVENUE BY : SHRI SUNDHENDU DAS / ORDER PER R.K.PANDA, AM : THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAINST THE ORDER DATED 25-04-2014 OF THE CIT(A)-V, PUNE RELATING TO ASSESSMENT YEAR 2006-07. 2. GROUNDS RAISED BY THE REVENUE ARE AS UNDER : 1. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.CIT(A) WAS JUSTIFIED IN DELETING THE PENALTY L EVIED U/S.271(1)(C) IN RESPECT OF DENIAL OF ADJUSTMENT OF BR OUGHT FORWARD BUSINESS LOSS AGAINST LONG TERM CAPITAL GAIN CLAIMED BY T HE ASSESSEE, WHICH IS NOT ALLOWABLE AS PER SECTION 72 OF THE INCOME TAX ACT, 1961? 2. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LD.CIT(A) IS JUSTIFIED IN DELETING THE PENALTY LE VIED U/S.271(1)(C) IN RESPECT OF DENIAL OF ADJUSTMENT OF BROUGHT FORWARD BUSINESS LOSS AGAINST LONG TERM CAPITAL GAIN CLAIMED BY THE ASSESSEE W ITHOUT / DATE OF HEARING :20.01.2016 / DATE OF PRONOUNCEMENT: 20.01.2016 2 ITA NO.1443/PN/2014 APPRECIATING THE FACT THAT THE SAME AMOUNTS TO FURNISH ING OF INACCURATE PARTICULARS OF INCOME AND THE SAID ERRONEO US CLAIM WOULD NOT HAVE GONE UNNOTICED HAD THE CASE NOT BEEN SELECTE D FOR SCRUTINY. 3. THE LD. COUNSEL FOR THE ASSESSEE AT THE OUTSET REFER RING TO PAGE 1 OF THE PAPER BOOK DREW THE ATTENTION OF THE BE NCH TO THE CALCULATION OF PENALTY LEVIED WITH COMPARISON OF INCOME AND SUBMITTED THAT THE TAX EFFECT ON THE GROUNDS RAISED BY THE REVENUE IS ONLY RS.7,67,833/-. REFERRING TO CBDT CIRCULAR NO. 21/2015 DATED 10-12-2015 HE SUBMITTED THAT IN VIEW OF T HE LOW TAX EFFECT, THE APPEAL FILED BY THE REVENUE IS NOT MAINTAINAB LE AND SHOULD BE DISMISSED. 4. THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVEN UE FAIRLY CONCEDED THAT THE TAX EFFECT IN THE GROUNDS RAISED BY THE REVENUE IS ADMITTEDLY BELOW RS.10 LAKHS. 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. ADMITTEDLY, THE TAX EFFECT IN THE INSTANT APPEAL IS LESS THAN RS.10 LAKHS. IN THIS BACKGROUND, WE HAVE TO CONSIDE R THE CIRCULAR NO.21/2015 DATED 10.12.2015 OF CBDT. THE CBDT VIDE THE SAID CIRCULAR HAS ANNOUNCED THAT SUBJECT TO CERTAIN EXCEPTIONS, NO DEPARTMENTAL APPEAL WOULD BE FILED AGAINST T HE RELIEF GIVEN BY THE CIT(A) BEFORE THE TRIBUNAL, WHERE THE TAX EFFECT EXCLUDING INTEREST DOES NOT EXCEED RS.10 LAKHS. THE SAID INSTRUCTIONS ARE MADE APPLICABLE NOT ONLY TO THE FUTURE A PPEALS TO BE FILED BY THE REVENUE BUT EVEN TO THE PENDING APPEALS WHERE THE TAX INVOLVED IN EACH OF THE APPEAL DOES NOT EXCEED RS.10 LAKHS, THE SAME ARE INSTRUCTED NOT TO BE PRESSED OR TO BE W ITHDRAWN BY THE REVENUE. IN VIEW THEREOF, WHERE AN APPEAL IS PENDING BEFORE THE TRIBUNAL, IRRESPECTIVE OF THE YEAR TO WHICH IT RELATES, THE SAID 3 ITA NO.1443/PN/2014 INSTRUCTIONS OF THE CBDT WOULD BE APPLICABLE AND THE APPEA LS OF THE REVENUE PENDING BEFORE THE TRIBUNAL WHERE THE TAX E FFECT IS LESS THAN RS.10 LAKHS WOULD BECOME NULLITY. THE RELEVANT EX TRACT OF THE CIRCULAR IS AS UNDER:- 3. HENCEFORTH, APPEALS/SLPS SHALL NOT BE FILED IN CASES WHERE THE TAX EFFECT DOES NOT EXCEED THE MONETARY LIMITS GIVE N UNDER:- 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 MONETARY LIMITS PRESCR IBED 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 W OULD HAVE BEEN CHARGEABLE HAD SUCH TOTAL INCOME BEEN REDUCED BY TH E AMOUNT OF INCOME IN RESPECT OF THE ISSUES AGAINST WHICH APPEA L 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 CHARGEA BILITY OF INTEREST IS THE ISSUE UNDER DISPUTE, THE AMOUNT OF INTEREST SHALL B E THE TAX EFFECT. IN CASES 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 QUANTUM OF PENALTY DELETED OR REDUCED IN THE ORDER TO BE APPEALED AGAINST. 5. THE ASSESSING OFFICER SHALL CALCULATE THE TAX EF FECT SEPARATELY FOR EVERY ASSESSMENT YEAR IN RESPECT OF THE DISPUTED IS SUES IN THE CASE OF EVERY ASSESSMENT. IF, IN THE CASE OF AN ASSESSEE, THE DISPUTED ISSUES ARISE IN MORE THAN ONE ASSESSMENT YEAR, APPEAL, CAN BE FI LED IN RESPECT OF SUCH ASSESSMENT YEAR OR YEARS IN WHICH THE TAX EFFE CT IN RESPECT OF THE DISPUTED ISSUES EXCEEDS THE MONETARY LIMIT SPECIFIE D IN PARA 3. NO APPEAL SHALL BE FILED IN RESPECT OF AN ASSESSMENT Y EAR OR YEARS IN WHICH THE TAX EFFECT IS LESS THAN THE MONETARY LIMIT SPEC IFIED IN PARA 3. IN OTHER WORDS, HENCEFORTH, APPEALS CAN BE FILED ONLY WITH REFERENCE TO THE TAX EFFECT IN THE RELEVANT ASSESSMENT YEAR. HOWEVE R, IN CASE OF A COMPOSITE ORDER OF ANY HIGH COURT OF APPELLATE AUTH ORITY, WHICH INVOLVES MORE THAN ONE ASSESSMENT YEAR AND COMMON I SSUES IN MORE THAN ONE ASSESSMENT YEAR, APPEAL SHALL BE FILED IN RESPECT OF ALL SUCH ASSESSMENT YEARS EVEN IF THE TAX EFFECT IS LESS T HAN THE PRESCRIBED MONETARY LIMITS IN ANY OF THE YEAR(S), IF IT IS DEC IDED TO FILE APPEAL IN RESPECT OF THE YEAR(S) IN WHICH TAX EFFECT EXCEED S THE MONETARY LIMIT PRESCRIBED. IN CASE WHERE A COMPOSITE ORDER / JUDG MENT INVOLVES MORE THAN ONE ASSESSEE, EACH ASSESSEE SHALL BE DEALT WIT H SEPARATELY. 4 ITA NO.1443/PN/2014 6. THE CBDT HAS FURTHER CLARIFIED THAT IN CASE THE DISPUTED ISSUE ARISES IN MORE THAN ONE ASSESSMENT YEAR, THEN THE APPEAL CAN BE FILED IN RESPECT OF SUCH ASSESSMENT YEAR OR YEARS IN WHICH THE TAX EFFECT IN RESPECT OF THE DISPUTED ISSUE EXCEEDS T HE MONETARY LIMIT SPECIFIED IN PARA 3 I.E. RS.10 LAKHS BEFORE THE TRIBUNAL. IT IS FURTHER DIRECTED THAT HENCEFORTH, THE APPE ALS CAN BE FILED BY THE REVENUE ONLY WITH REFERENCE TO THE TAX E FFECT IN THE RELEVANT ASSESSMENT YEAR. HOWEVER, IN CASE OF A COMPOSIT E ORDER OF ANY HIGH COURT OR APPELLATE AUTHORITY, WHICH INVOLVES MOR E THAN ONE ASSESSMENT YEAR AND COMMON ISSUES IN MORE TH AN ONE ASSESSMENT YEAR, THEN APPEAL SHALL BE FILED IN RESPECT OF SU CH ASSESSMENT YEAR, EVEN IF THE TAX EFFECT IS LESS THAN THE P RESCRIBED MONETARY LIMITS IN ANY OF THE YEAR(S), IF IT IS DECIDED TO FILE A PPEAL IN RESPECT OF THE YEAR(S) IN WHICH TAX EFFECT EXCEEDS TH E MONETARY LIMIT PRESCRIBED. WHERE A COMPOSITE ORDER / JUDGMENT INVO LVES MORE THAN ONE ASSESSEE, THEN EACH ASSESSEE SHALL BE DE ALT WITH SEPARATELY. IT IS ALSO PROVIDED FURTHER VIDE PARAS 6 AN D 7 THAT WHERE THE APPEAL BEFORE THE TRIBUNAL WAS NOT FILED ONLY ON ACCOUNT OF TAX EFFECT BEING LESS THAN SPECIFIED MONETARY LIMIT , THEN THE INCOME-TAX DEPARTMENT SHALL NOT BE PRECLUDED FROM FILI NG AN APPEAL AGAINST THE DISPUTED ISSUES IN THE CASE OF THE SAM E ASSESSEE FOR ANY OTHER ASSESSMENT YEAR, OR IN CASE OF A NY OTHER ASSESSEE FOR THE SAME OR ANY OTHER ASSESSMENT YEAR, IF THE TAX EFFECT EXCEEDS THE SPECIFIED MONETARY LIMITS. THE CBDT HAS FURTHER VIDE PARA 8 SPECIFIED THE ISSUE WHICH SHOULD BE CON TESTED ON MERITS NOTWITHSTANDING THAT THE TAX EFFECT ENTAILED IS LE SS THAN THE MONETARY LIMITS SPECIFIED. FURTHER, THE SPECIFIED MONETAR Y LIMITS AS PER PARA 9 WOULD NOT APPLY TO WRIT MATTERS AND DIRECT TAX MATTERS OTHER THAN INCOME TAX AND ALSO IS NOT APPLICABLE TO THE 5 ITA NO.1443/PN/2014 APPEALS WHERE TAX EFFECT IS NOT QUANTIFIABLE OR NOT INVOLVED, SUCH AS THE CASE OF REGISTRATION OF TRUSTS OR INSTITUTIONS UNDE R SECTION 12A OF THE ACT. IN SUCH CASES, THE DECISION TO FILE AN APP EAL IS TO BE TAKEN ON THE MERITS OF A PARTICULARS CASE. THE PARAS 6 TO 9 OF THE CIRCULAR READ AS UNDER:- 6. IN A CASE WHERE APPEAL BEFORE A TRIBUNAL OR A C OURT IS NOT FILED ONLY ON ACCOUNT OF THE TAX EFFECT BEING LESS THAN T HE MONETARY LIMIT SPECIFIED ABOVE, THE COMMISSIONER OF INCOME-TAX SHA LL SPECIFICALLY RECORD THAT EVEN THOUGH THE DECISION IS NOT ACCEPT ABLE, APPEAL IS NOT BEING FILED ONLY ON THE CONSIDERATION THAT THE TAX EFFECT IS LESS THAN THE MONETARY LIMIT SPECIFIED IN THIS INSTRUCTION. IN SUCH CASES, THERE WILL BE NO PRESUMPTION THAT THE INCOME-TAX DEPARTMENT HAS A CQUIESCED IN THE DECISION ON THE DISPUTED ISSUES. THE INCOME-TAX DE PARTMENT SHALL NOT BE PRECLUDED FROM FILING AN APPEAL AGAINST THE DISP UTED ISSUES IN THE CASE OF THE SAME ASSESSEE FOR ANY OTHER ASSESSMENT YEAR, OR IN THE CASE OF ANY OTHER ASSESSEE FOR THE SAME OR ANY OTHER ASS ESSMENT YEAR, IF THE TAX EFFECT EXCEEDS THE SPECIFIED MONETARY LIMITS. 7. IN THE PAST, A NUMBER OF INSTANCES HAVE COME TO THE NOTICE OF THE BOARD, WHEREBY AN ASSESSEE HAS CLAIMED RELIEF FROM THE TRIBUNAL OR THE COURT ONLY ON THE GROUND THAT THE DEPARTMENT HAS IM PLICITLY ACCEPTED THE DECISION OF THE TRIBUNAL OR COURT IN THE CASE O F THE ASSESSEE FOR ANY OTHER ASSESSMENT YEAR OR IN THE CASE OF ANY OTHER A SSESSEE FOR THE SAME OR ANY OTHER ASSESSMENT YEAR, BY NOT FILING AN APPE AL ON THE SAME DISPUTED ISSUES. THE DEPARTMENTAL REPRESENTATIVES/ COUNSELS MUST MAKE EVERY EFFORT TO BRING TO THE NOTICE OF THE TRI BUNAL OR THE COURT THAT THE APPEAL IN SUCH CASES WAS NOT FILED OR NOT ADMITTED ONLY FOR THE REASON OF THE TAX EFFECT BEING LESS THAN THE SPECIF IED MONETARY LIMIT AND, THEREFORE, NO INFERENCE SHOULD BE DRAWN THAT T HE DECISIONS RENDERED THEREIN WERE ACCEPTABLE TO THE DEPARTMENT. ACCORDINGLY, THEY SHOULD IMPRESS UPON THE TRIBUNAL OR THE COURT THAT SUCH CASES DO NOT HAVE ANY PRECEDENT VALUE. AS THE EVIDENCE OF N OT FILING APPEAL DUE TO THIS INSTRUCTION MAY HAVE TO BE PRODUCED IN COUR TS, THE JUDICIAL FOLDERS IN THE OFFICE OF CSIT MUST BE MAINTAINED IN A SYSTEMIC MANNER FOR EASY RETRIEVAL. 8. ADVERSE JUDGMENTS RELATING TO THE FOLLOWING ISSU ES SHOULD BE CONTESTED ON MERITS NOTWITHSTANDING THAT THE TAX EF FECT ENTAILED IS LESS THAN THE MONETARY LIMITS SPECIFIED 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 C IRCULAR HAS BEEN HELD TO BE ILLEGAL OR ULTRA VIRES, OR (C) WHERE REVENUE AUDIT OBJECT IN THE CASE HAS BEEN ACC EPTED BY THE DEPARTMENT, OR (D) WHERE THE ADDITION RELATES TO UNDISCLOSED FOREIGN A SSETS / BANK ACCOUNTS. 9. THE MONETARY LIMITS SPECIFIED IN PARA 3 ABOVE SH ALL NOT APPLY TO WRIT MATTERS AND DIRECT TAX MATTERS OTHER THAN INCO ME TAX. FILING OF 6 ITA NO.1443/PN/2014 APPEALS IN OTHER DIRECT TAX MATTERS SHALL CONTINUE TO BE GOVERNED BY RELEVANT PROVISIONS OF STATUTE & RULES. FURTHER, F ILING OF APPEAL IN CASES OF INCOME TAX, WHERE THE TAX EFFECT IS NOT QUANTIFI ABLE OR NOT INVOLVED, SUCH AS THE CASE OF REGISTRATION OF TRUSTS OR INSTI TUTIONS UNDER SECTION 12A OF THE IT ACT, 1961, SHALL NOT BE GOVERNED BY T HE LIMITS SPECIFIED IN PARA 3 ABOVE AND DECISION TO FILE APPEAL IN SUCH CA SES MAY BE TAKEN ON MERITS OF A PARTICULAR CASE. 7. THE RETROSPECTIVE OPERATION OF THE INSTRUCTIONS TO PEN DING APPEALS IS PROVIDED IN PARA 10 OF THE CIRCULAR, WHICH READS AS UNDER:- 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 AB OVE MAY BE WITHDRAWN / NOT PRESSED. APPEALS BEFORE THE SUPREM E COURT WILL BE GOVERNED BY THE INSTRUCTIONS ON THIS SUBJECT, OPERA TIVE AT THE TIME WHEN SUCH APPEAL WAS FILED. 8. IN VIEW OF THE ABOVE SAID INSTRUCTIONS OF CBDT WHERE THE TAX EFFECT IS LESS THAN RS.10 LAKHS, THE APPEAL FILED BY THE REVEN UE, WHICH IS PENDING BEFORE THE TRIBUNAL IS NOT TO BE PRESSED OR WITHDRAWN BY THE REVENUE AUTHORITIES. SINCE THE TAX EFFEC T IN THE INSTANT APPEAL FILED BY THE REVENUE IS ADMITTEDLY LESS THAN RS.10 LAKHS, THEREFORE, IN VIEW OF THE INSTRUCTIONS OF CBDT AND THE ENTIRETY OF FACTS, WE DISMISS THE APPEAL FILED BY THE REVENUE AS NOT MAINTAINABLE. 9. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT AT THE TIME OF HEA RING ITSELF, I.E. ON 20-01-2016. SD/- SD/- ( VIKAS AWASTHY ) ( R.K. PANDA ) JUDICIAL MEMBER ACCOUNTANT MEMBER PUNE ; DATED 20 TH JANUARY 2016. 7 ITA NO.1443/PN/2014 ) *#,! -! / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. THE CIT(A) - V , PUNE 4. 5. 6. THE CIT-V, PUNE $ ''(, (, / DR, ITAT, B PUNE; - / GUARD FILE. / BY ORDER , // TRUE COPY // // $ ' //TRUE CO /0 ' ( / SR. PRIVATE SECRETARY (, / ITAT, PUNE