Income-tax Officer, V. Shri Dattatraya Ramchandra Patil, Sangli

ITA 1477/PUN/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 93868 (ITAT-PUNE)
• Duration Of Justice: 11 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-07-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 23-07-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJESH DAMOR
• Keywords: Question of law; Tax effect
• Section: 143(3); 260A

Judgement Text

- IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH SMC, PUNE , , BEFORE MS. SUSHMA CHOWLA, J UDICIAL M EMBER . / ITA NO. 1 477 /PN/201 4 / ASSESSMENT YEAR : 200 9 - 1 0 THE INCOME TAX OFFICER , WARD 2 ( 3 ), SANGLI . / APPELLANT VS. VS. SHRI DATTATRAYA RAMCHANDRA PATIL, NEAR ADARSH PRASHALA, A/P NAGAJ, TAL. KAVATHE MAHANKAL, DIST. SANGLI. . / RESPONDENT P AN: BZUPS0181C / APPELLANT BY : SHRI RAJESH DAMOR / RESPOND ENT BY : NONE / DATE OF HEARING : 17 .07.2015 / DATE OF PRONOUNCEMENT: 17 .07.2015 / ORDER PER SUSHMA CHOWLA , J M : TH I S APPEAL FILED BY THE REVENUE IS AGAINST THE ORDER OF CIT(A) , KOLHAPUR , TH I S APPEAL FILED BY THE REVENUE IS AGAINST THE ORDER OF CIT(A) , KOLHAPUR , DATED 0 1 . 0 4 .20 1 4 REL ATING TO ASSESSMENT YEAR 200 9 - 1 0 AGAINST ORDER PASSED UNDER SECTION 143(3) OF THE INCOME TAX ACT , 1961 . 2 . DESPITE THE SERVICE OF NOTICE, NONE APPEARE D ON BEHALF OF THE ASSESSEE. HOWEVER, WE PROCEED TO DECIDE THE PRESENT APPEAL SINCE THE TAX EFFECT IN THE APPEAL IS BELOW RS.4 LAKHS . 3. ON THE PERUSAL OF THE RECORD, WE FIND THAT THE PRESENT APPEAL IS FILED BY THE REVENUE AND THE TOTAL TAX EFFECT IN THE PRESENT APPEAL IS BELOW RS.4 LAKHS . THE ITA NO . 1 477 /PN/20 1 4 SHRI DATTATRAYA R. PATIL 2 LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE FAIRLY ADMITTED THAT THE TAX EFFECT IN THE PRESENT APPEAL WAS LESS THAN RS. 4 LAKHS. 4 . WE FIND THAT THE ISSUE IN THE PRESENT APPEAL IS SQUARELY COVERED BY THE RA TIO LAID DOWN BY THE HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. SMT. VIJAYA V. KAVEKAR REPORTED IN (2013) 350 ITR 237 (BOM) THAT THE PROPOSITION REGARDING THE CIRCULARS ISSUED BY THE CBDT ARE NOT ONLY APPLICABLE TO THE NEW CASES BUT W OULD ALSO APPLIC ABLE TO THE PENDING APPEALS. 5 . UNDER THE PROVISIONS OF SECTION 268(1) OF THE ACT, THE CBDT IS EMPOWERED TO ISSUE INSTRUCTIONS FIXING THE MONETARY LIMITS FOR THE REVENUE TO FILE APPEALS BEFORE THE TRIBUNAL, ALL THE HIGH COURTS AND THE SUPREME COURT. THE CBDT FROM TIME TO TIME, ISSUES INSTRUCTIONS FIXING THE MONETARY LIMITS WITH THE OBJECT OF NOT BURDENING THE COURTS AND THE TRIBUNAL WITH MATTERS WHERE THE TAX EFFECT WAS ON A LOWER SIDE. THE CBDT VIDE INSTRUCTION NO.5 OF 2014 ISSUED ON 10.07.2014 HAD REVI SED THE EARLIER INSTRUCTION NO.3 OF 2011, DATED 09.02.2011 WHEREIN, THE MONETARY LIMITS AND OTHER CONDITIONS FOR FILING THE DEPARTMENTAL APPEALS IN INCOME TAX MATTERS BEFORE THE APPELLATE TRIBUNALS, HIGH COURTS AND SUPREME COURT WERE SPECIFIED. THE INSTRU CTIONS ISSUED ON 10.07.2014 WERE IN SUPERSESSION OF THE EARLIER INSTRUCTIONS AND THE MONETARY LIMITS HAVE BEEN ENHANCED BY THE PRESENT INSTRUCTION AND IT HAS BEEN PROVIDED THAT THE APPEALS SHALL NOT BE FILED IN CASES WHERE THE TAX EFFECT DOES NOT EXCEED TH E MONETARY LIMITS GIVEN HEREUNDER: - S NO APPEALS IN INCOME - TAX MATTERS MONETARY LIMIT (IN RS) 1. BEFORE APPELLATE TRIBUNAL 4,00,000/ - 2. U/S 260A BEFORE HIGH COURT 10,00,000/ - 3. BEFORE SUPREME COURT 25,00,000/ - 6 . THE REVISED MONETARY LIMIT FOR FILIN G THE APPEALS BEFORE THE APPELLATE TRIBUNAL WAS FIXED AT IN EXCESS OF RS.4 LACS. FURTHER, UNDER THE SAID INSTRUCTION, IT WAS ALSO DIRECTED THAT THE ASSESSING OFFICER SHALL CALCULATE THE TAX EFFECT SEPARATELY FOR EVERY ASSESSMENT YEAR IN RESPECT OF THE DIS PUTED ISSUES. IN CASE ITA NO . 1 477 /PN/20 1 4 SHRI DATTATRAYA R. PATIL 3 OF EVERY ASSESSEE WHERE, THE DISPUTED ISSUE ARISES IN MORE THAN ONE ASSESSMENT YEAR, IT WAS DIRECTED THAT APPEAL COULD BE FILED IN RESPECT OF SUCH ASSESSMENT YEAR OR YEARS IN WHICH, THE TAX EFFECT IN RESPECT OF THE DISPUTED ISSUE EXC EEDED THE MONETARY LIMIT FIXED. IN OTHER WORDS AND HENCEFORTH, THE APPEALS CAN BE FILED ONLY WITH REFERENCE TO THE TAX EFFECT IN THE RELEVANT ASSESSMENT YEAR. IN CASE OF COMPOSITE ORDER OF ANY HIGH COURT OR APPELLATE AUTHORITY, IT WAS FURTHER CLARIFIED T HAT IF THE APPEAL IS TO BE FILED IN RESPECT OF THE YEAR/S IN WHICH, TAX EFFECT EXCEEDS THE MONETARY LIMIT PRESCRIBED THEN, SUCH APPEALS COULD ALSO BE FILED IN RESPECT OF ALL SUCH ASSESSMENT YEARS EVEN IF THE TAX EFFECT IS LESS THAN PRESCRIBED MONETARY LIMI TS. 7 . IN THE FACTS OF THE PRESENT CASE, THE REVENUE HAD FILED THE APPEAL ON 2 3 . 0 7 .20 1 4 . ADMITTEDLY, IN THE YEAR UNDER APPEAL, THE TAX EFFECT IS LESS THAN RS.4 LACS AS PRESCRIBED IN INSTRUCTION NO.5 OF 2014 ISSUED BY THE CBDT. AT THE TIME OF HEARING OF THE APPEAL, THE MONETARY LIMITS PRESCRIBED BY THE CBDT STAND REVISED BY THE SAID INSTRUCTION NO.5 OF 2014, DATED 10.07.2014 UNDER WHICH, IT HAS BEEN BY THE SAID INSTRUCTION NO.5 OF 2014, DATED 10.07.2014 UNDER WHICH, IT HAS BEEN PROVIDED THAT WHERE THE TAX EFFECT DOES NOT EXCEED RS.4 LACS IN ANY OF THE ASSESSMENT YEAR THEN, NO APPEAL CAN BE FILED BEFORE THE APPELLATE TRIBUNAL. THE ISSUE ARISING BEFORE US IS WHETHER THE SAID REVISED INSTRUCTIONS WHICH WERE ISSUED SUBSEQUENT TO THE FILING OF THE APPEAL BY THE REVENUE COULD BE APPLIED TO THE PENDING APPEAL OR APPLICABLE ONLY TO THE NEW C ASES TO BE FILED BY THE REVENUE AFTER THE DATE OF ISSUE OF THE INSTRUCTIONS. 8 . WE FIND THAT THE SAID ISSUE HAS BEEN CONSIDERED BY THE HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. SMT. VIJAYA V. KAVEKAR (SUPRA). THE HONBLE HIGH COURT IN THE CASE O F CIT VS. SMT. VIJAYA V. KAVEKAR (SUPRA), HAD IN TURN FOLLOWED THE RATIO LAID DOWN BY ANOTHER DIVISION OF BOMBAY HIGH COURT IN THE CASE OF CIT VS. POLYCOTT CORPORATION REPORTED IN (2009) 318 ITR 144 (BOM) WHEREIN, IT WAS HELD AS UNDER: - 8. IN CASE OF 'CO MMISSIONER OF INCOME TAX V/S POLYCOTT CORPORATION' REPORTED AT '(2009) 318 ITR 144 (BOM), A ANOTHER DIVISION BENCH OF THIS ITA NO . 1 477 /PN/20 1 4 SHRI DATTATRAYA R. PATIL 4 COURT CONSTRUED THE SAME INSTRUCTION NO. 2 OF 2005, DATED 24TH OCTOBER, 2005. THE DIVISION BENCH OBSERVED WHILE CONSTRUING THE PARAGR APH NO. 5 OF THE CIRCULAR, AS THUS : '9. HAVING CONSIDERED THE CONTENTIONS, IN OUR OPINION, THE INSTRUCTIONS CANNOT BE INTERPRETED AS A STATUTE THOUGH IT IS PURSUANT TO THE POWER CONFERRED UNDER SECTION 268A OF THE IT ACT. WHAT THE COURT HAS TO CONSIDER I S THE PLAIN LANGUAGE OF THE PARA AND THE OBJECT BEHIND THE SAID PROVISIONS. THE OBJECT APPEARS TO BE NOT TO BURDEN COURTS AND TRIBUNALS IN RESPECT OF MATTERS WHERE THE TAX EFFECT IS LESS THAN THE LIMIT PRESCRIBED. EVEN BEFORE THIS INSTRUCTION, CBDT HAS BEE N ISSUING INSTRUCTIONS, THE LAST ONE BEING ON 24TH OCT., 2005 WHERE THE MONETARY LIMIT HAS BEEN FIXED. IN THOSE INSTRUCTIONS THE ONLY EXCEPTION HAD BEEN THAT IN CASES INVOLVING, SUBSTANTIAL QUESTION OF LAW OF IMPORTANCE AS WELL AS IN CASES WHERE THE SAME Q UESTION OF LAW WILL REPEATEDLY ARISE, EITHER IN THE CASE CONCERNED OR IN SIMILAR CASE, APPEAL SHOULD BE FILED WITHOUT BEING HINDERED BY THE MONETARY LIMITS. THE PRESENT INSTRUCTIONS SEEM EVEN TO LIMIT THE ISSUES INSOFAR AS THE SAME QUESTION OF LAW OR RECUR RING ISSUE EXCEPT TO THE EXTENT PROVIDED IN PARA 5. ON A PROPER READING OF PARA 5 OF THE INSTRUCTIONS IT WOULD BE CLEAR THAT A DUTY IS CAST ON THE AO THAT EVEN IF THE DISPUTED QUESTIONS ARISE FOR MORE THAN ONE ASSESSMENT YEAR THEN AN APPEAL SHOULD BE FILE D ONLY IN RESPECT OF THOSE YEARS WHERE THE MONETARY LIMIT AS SPECIFIED IN PARA 3 OF THE INSTRUCTION. THE EXCEPTION, HOWEVER, IS CARVED OUT IN RESPECT OF A COMPOSITE ORDER OF THE HIGH COURT OR APPELLATE AUTHORITY. IN OTHER WORDS WHERE THE HIGH COURT OR TRIB UNAL HAS PASSED A COMPOSITE ORDER IN RESPECT OF THE SAME ASSESSEE ON THE SAME QUESTION AND/OR ON DIFFERENT QUESTION AND FOR ONE OF THE ASSESSMENT YEARS, THE TAX EFFECT IS MORE THAN THE MONETARY LIMIT ASSESSMENT YEARS, THE TAX EFFECT IS MORE THAN THE MONETARY LIMIT THEN THE APPEAL SHALL ALSO BE FILED IN RESPECT OF ALL TH E ASSESSMENT YEARS. THE SUBMISSION ON BEHALF OF THE ASSESSEE IS THAT THE COMPOSITE ORDER MUST RELATE TO A COMMON ISSUE. WE BEG TO DISAGREE ON A PLAIN AND LITERAL CONSTRUCTION OF THE INSTRUCTION. THE EXPRESSION 'WHICH INVOLVES MORE THAN ONE YEAR' WOULD HAVE NO MEANING IF IT WAS RESTRICTED ONLY TO THE EXPRESSION 'COMMON ISSUES'. THE EXPRESSION, THEREFORE, OF A COMPOSITE ORDER WILL HAVE TO BE READ TO MEAN AN ORDER IN RESPECT OF THE SAME ASSESSEE FOR MORE THAN ONE YEAR. AN (ORDER) DISPOSING OF SEVERAL APPEALS O N A COMMON QUESTION OF LAW BY APPELLATE AUTHORITY, CANNOT BE SAID TO BE A COMPOSITE ORDER AS THE ORDER INVOLVES APPEALS BY DIFFERENT PERSONS, WHICH APPEALS FOR THE SAKE OF CONVENIENCE HAVE BEEN ONLY CLUBBED TOGETHER FOR THE PURPOSE OF DISPOSAL ON THAT ISSU E. IN OUR OPINION, THIS WOULD BE THE CORRECT READING OF PARA 5 OF THE INSTRUCTION.' 9 . THE HONBLE BOMBAY HIGH COURT FURTHER HELD AS UNDER: - 15. THE POSITION OF LAW, THEREFORE, EMERGING FROM THE AFORESAID JUDGEMENTS, IS THAT THE CIRCULARS OR INSTRUCTIONS ISSUED UNDER SECTION 268A OF THE INCOME TAX ACT BY THE CENTRAL BOARD OF DIRECT TAXES, ARE APPLICABLE NOT ONLY TO NEW CASES BUT TO PENDING CASES AS WELL. SUCH CIRCULARS HAVE BEEN ISSUED UNDER SECTION 268A OF THE INCOME TAX ACT, WHICH IS AN EXCEPTION TO THE PROVISIONS OF SECTION 260 OF THE ACT. THE CBDT BEING MINDFUL OF THIS POSITION HAS ISSUED THE AFORESAID INSTRUCTIONS. IN OUR OPINION, THEREFORE, THE INSTRUCTIONS WOULD BE APPLICABLE TO PENDING CASES AS WELL. WE HAVE ALREADY FOUND THAT THE INSTRUCTION NO. 5 OF 2008 AND INSTRUCTION NO. 3 OF 2011 ARE PARA - MATERIA. THE INSTRUCTION NO. 5 OF 2008 ITA NO . 1 477 /PN/20 1 4 SHRI DATTATRAYA R. PATIL 5 HAS ALREADY BEEN INTERPRETED BY THIS COURT IN CIT V/S MADHUKAR INAMDAR (SUPRA). IT IS NOT DISPUTED THAT THIS JUDGEMENT HAS NOT BEEN CHALLENGED BY THE REVENUE AND THEREFO RE STILL HOLDS THE FIELD. 1 0 . FOLLOWING THE ABOVE SAID PROPOSITION LAID DOWN BY THE HONBLE HIGH COURT IN THE CASE OF CIT VS. SMT. VIJAYA V. KAVEKAR (SUPRA), WE HOLD THAT IN VIEW OF THE REVISED INSTRUCTION ISSUED BY THE CBDT UNDER WHICH, THE MONETARY LIM IT FOR FILING THE APPEALS BEFORE THE APPELLATE AUTHORITIES, TRIBUNALS HAS BEEN REVISED AND FIXED AT RS.4 LACS I.E. ONLY APPEALS WITH TAX EFFECT EXCEEDING RS.4 LACS WERE MAINTAINABLE. IN THE PRESENT APPEAL FILED BY THE REVENUE, THE MONETARY LIMIT ADMITTEDL Y, IS LESS THAN RS.4 LACS. IN VIEW OF INSTRUCTION NO.5 OF 2014 WHICH ARE APPLICABLE NOT ONLY TO THE NEW APPEALS TO BE FILED BY THE REVENUE, BUT ALSO TO THE APPEALS PENDING BEFORE THE TRIBUNAL, WE DISMISS THE APPEAL FILED BY THE REVENUE BECAUSE OF SMALL TA X EFFECT. 1 1 . IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED. ORDER P RONOUNCED IN THE OPEN COURT ON THIS 17 TH DAY OF JULY , 201 5 . SD/ - ( SUSHMA CHOWLA ) / JUDICIAL MEMBER / PU NE ; DATED : 17 TH JU LY , 2015 . GCVSR / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT ; 2. / THE RESPONDENT; 3. ( ) / THE CIT(A), KOLHAPUR ; 4. / THE CIT - I/II, KOLHAPUR / CIT (CENTRAL), PUNE ; 5. , , - / DR SMC , ITAT, PUNE; 6. / GUARD FILE . / BY ORDER , // TRUE COPY // / SR. PRIVATE SECRETARY , / ITAT, PUNE