I.T.O., Ward - 5(3), Kolkata, Kolkata V. M/s. Black Forest Properties Pvt. Ltd., Kolkata

ITA 1505/KOL/2009

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 7940 (ITAT-KOLKATA)
• Duration Of Justice: 6 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-03-2010
• Appeal Filed By: Department
• Bench Allotted: C
• Assessment Year: 2001-2002
• Appeal Filed On: 27-08-2009
• Court: TRIBUNAL
• Department Lawyers: O P AGARWALAR
• Assessee Lawyers: S BAGCHI
• Keywords: Question of law; Tax effect

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH - C , KOLKATA ( ) BEFORE . . , SHRI B.R.MITTAL, JUDICIAL MEMBER. /AND . . , , SHRI B.C.MEENA, ACCOUNTA NT MEMBER. /ITA NO. 1505/KOL/2009 / ASSESSMENT YEAR ITO, WARD 5(3), KOLKATA. - - - VERSUS - . M/S.BLACK FOREST PROPERTIES PVT.LTD.,4,INDIAN EXCHANGE PLACE, KOLKATA 700 001. ( / A PPELLANT ) ( / RESPONDENT ) / FOR THE APPELLANT: / SHRI O.P.AGARWAL,AR / FOR THE RESPONDENT : / SHRI S. BAGCHI, DR / ORDER . . , SHRI B.R.MITTAL, JUDICIAL MEMBER. THIS APPEAL IS FILED BY THE DEPARTMENT AGA INST ORDER DT. 29.5.2009 OF THE LEARNED COMMISSIONER OF INCOME - TAX (APPEALS) FOR THE ASSESSMENT YEAR 2001 - 02, ON THE FOLLOWING GROUNDS. 1. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN LAW AS WELL AS ON FACTS IN DELETING T HE ADDITION OF RS.5,34,000 MADE BY THE ASSESSING OFFICER ON ACCOUNT OF DIFFERENCE IN; VALUATION OF LAND PURCHASED BY THE ASSESSEE. 2. THAT THE APPELLANT CRAVES FOR LEAVE TO ADD, DELETE OR MODIFY ANY OF THE GROUNDS OF APPEAL BEFORE OR AT THE TIME OF HEARING . 2. AT THE TIME OF HEARING, THE LEARNED CONCEDED THAT THE TOTAL TAX EFFECT IN THIS APPEAL IS LESS THAN RS.2 LAKHS. THE LEARNED DR WAS ALSO NOT ABLE TO POINT OUT AS TO WHETHER ANY QUESTION OF LAW ARISES IN THIS APPEAL. WE ALSO OBSERVE THAT THE ISSUE INVO LVED IN THIS APPEAL DOES NOT FALL ON ANY OF THE EXCEPTION PROVIDED IN THE CBDT CIRCULAR. WE HAVE CONSIDERED THE GROUNDS OF APPEAL IN THE LIGHT OF THE CBDT 2 /ITA NO. 1505/KOL/2009 CIRCULAR NO. 279/MISC. - 64/05 - ITJ DATED 24 - 10 - 2005 READ WITH INSTRUCTION NO. 2/2005 DATED 24 - 10 - 2005. 3 . WE FIND THAT THE CBDT VIDE INSTRUCTION NO. 2/2005 DATED 24.10.2005 ISSUES GUIDELINES TO THE REVENUE AUTHORITIES WITH REGARD TO FILING OF APPEAL BEFORE THE TRIBUNAL, HIGH COURT AND THE SUPREME COURT. FROM THE ABOVE INSTRUCTION, IT IS EVIDENT THAT SINCE 1987, THE CBDT HAS BEEN INSTRUCTING ITS OFFICERS NOT TO FILE THE APPEAL WHERE THE TAX EFFECT IS BELOW CERTAIN MONETARY LIMITS. VIDE INSTRUCTION NO. 1903 DATED 28.10.1992 THE MONETARY LIMIT WAS REVISED UPWARD AND THE OFFICERS WERE DIRECTED NOT TO FILE APPEA L BEFORE THE INCOME TAX APPELLATE TRIBUNAL WHERE THE TAX EFFECT WAS BELOW RS.25,000/ - . THE ABOVE MONETARY LIMIT WAS FURTHER REVISED UPWARD BY INSTRUCTION NO. 1979 DATED 27.3.2000 AND THE OFFICERS WERE DIRECTED NOT TO FILE THE APPEAL TO ITAT WHERE THE TAX EF FECT IS BELOW RS.1,00,000/ - . THEREAFTER IN PARTIAL MODIFICATION OF THE ABOVE INSTRUCTION , THE BOARD VIDE INSTRUCTION NO. 2/2005 DATED 24.10.2005 HAS FURTHER RAISED THE ABOVE MONETARY LIMIT TO RS.2,00,000/ - WITH THE SAME DIRECTIONS. THUS THE C.B.D.T. 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 MONETARY LIMIT IS ALSO REVISED UPWARD FROM TIME TO TIME. THE CIRCULAR UNDER INSTRUCTION NO.1979 DATED 27 - 3 - 2000 WAS CONSIDERED BY THE BOMBAY HIGH COURT IN THE CASE OF CAMCO COLOUR CO. 254 ITR 565 AND THEIR LORDSHIPS HELD AT PAGE 568 AS UNDER IT APPEARS THAT DESPITE THE ABOVE CIRCULAR, THE REVENUE HAS CHOSEN TO FILE THE PRESENT APPEAL KNOWINGLY FULL Y WELL THAT THE CORRIDORS OF THE COURTS ARE FLOODED WITH PENDING LITIGATIONS. THE PRESENTATION OF THIS APPEAL IS QUITE CONTRARY TO THE INSTRUCTION ISSUED IN THE CIRCULAR, WHICH IS BINDING ON THE REVENUE. IN THE ABOVE VIEW OF THE MATTER, CONSIDERING THE INS TRUCTIONS ISSUED BY THE CENTRAL BOARD OF DIRECT TAXES, WE ARE SATISFIED THAT THE BOARD HAS TAKEN A POLICY DECISION NOT TO FILE APPEAL IN A TYPE OF CASE IN HAND AND THE SAME IS BINDING ON THE REVENUE (APPELLANT HEREIN). IN THE RESULT, WE DISMISS THIS APPEAL ON THIS COUNT IN LIMINE WITH NO ORDER AS TO COSTS. 4 . WE FIND THAT RECENTLY THE APEX COURT HAS CONSIDERED THE EFFECT OF CIRCULAR ISSUED BY THE CBDT IN THE CASE OF COMMISSIONER OF CUSTOMS VS. INDIAN OIL CORPORATION LTD. 267 ITR 272. THEIR LORDSHIPS EXAM INED THE EARLIER DECISIONS OF 3 /ITA NO. 1505/KOL/2009 THE APEX COURT WITH REGARD TO BINDING NATURE OF THE CIRCULAR AND LAID DOWN THE FOLLOWING PRINCIPLES AT PAGE 277 OF THE REPORTS - THE PRINCIPLES LAID DOWN BY ALL THESE DECISIONS ARE 1 ) ALTHOUGH A CIRCULAR IS NOT BINDING ON A COURT ON 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 REVENUE IS BOUND BY IT AN D CANNOT BE ALLOWED TO PLEAD THA T IT IS NOT VALID NOR THAT I T IS CONTRARY TO THE TERMS OF THE STATUTE. 2) DESPITE THE DECISION OF THIS COURT, THE DEPARTMENT CANNOT BE PERMITTED TO TAKE A STAND CONTRARY TO THE INSTRUCTIONS ISSUED BY THE BOARD. 3) A SHOW CAUSE NOTICE AND DEMAND CONTRARY TO EXISTING CIRCULARS OF THE BOARD ARE AB INITIO VOID. 4) IT IS NOT OPEN TO THE REVENUE TO ADVANCE AN ARGUMENT OR FILE AN APPEAL CONTRARY TO THE CIRCULARS. 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 ARG UMENT OR FILE AN APPEAL CONTRARY TO THE CIRCULAR. ACCORDINGLY, THIS APPEAL FILED BY THE REVENUE IS NOT ADMITTED AND IS BEING DISMISSED IN LIMINE . 5 . IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED. THIS ORDER IS PRONOUNCED IN OPEN COURT ON DT. 18.03.2010 SD/ - SD/ - ( . . ) , , (B.C.MEENA), ACCOUNTANT MEMBER. ( . . ), B.R.MITTAL, JUDICIAL MEMBER ( ) DATE: 18.03.2010 ( /H.K.PADHEE) / SNR.PRIVATE SECRETARY. 4 /ITA NO. 1505/KOL/2009 - COPY OF THE ORDER FORWARDED TO: 1. / THE APPELLANT : ITO, WARD 5(3), KOLKATA. 2 / THE RESPONDENT : M/S.BLACK FOREST PRO PERTIES PVT.LTD.,4,INDIAN EXCHANGE PLACE, KOLKATA 700 001. 3. / THE CIT, 4. ( ) / THE CIT(A), 5. / DR, KOLKATA BENCHES, KOLKATA 6. GUARD FILE . / TRUE COPY , / B Y ORDER , / DEPUTY REGISTRAR .