ITO, Aurangabad V. Mr MOHD.KHAN RAJE PATHAN, Aurangabad

ITA 1520/PUN/2013

• Counselvise Citation: [2015] 121 COUNSELVISE.COM (IT) 2319 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 4 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-12-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 09-03-2015
• Assessment Year: 2005-2006
• Appeal Filed On: 31-07-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DHEERAJ KUMAR JAIN
• Assessee Lawyers: S N PURANIK B
• Keywords: Tax effect
• Section: 12A

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE . . , , ' # BEFORE SHRI R.K. PANDA, AM AND SHRI VIKAS AWASTHY, JM . / ITA NO.1519/PN/2013 '% % / ASSESSMENT YEAR : 2005-06 ITO, WARD-2(3), AURANGABAD . / APPELLANT V/S MR. NASIBKHAN RAJEKHAN PATHAN, NEAR MAHANAGAR PALIKA SCHOOL, MUKUNDWADI, AURANGABAD PAN NO.ASUPP1152C . / RESPONDENT . / ITA NO.1520/PN/2013 '% % / ASSESSMENT YEAR : 2005-06 ITO, WARD-2(3), AURANGABAD . / APPELLANT V/S MR. MOHD. KHAN RAJEKHAN PATHAN, R/O. KHATIK GALLI, CHIKALTHANA, AURANGABAD. PAN NO.ASUPP1203G . / RESPONDENT / APPELLANT BY : SHRI DHEERAJ KUMAR JAIN / RESPONDENT BY : SHRI S.N. PURANIK B / ORDER PER R.K. PANDA, AM : THE ABOVE 2 APPEALS FILED BY THE REVENUE ARE DIRECTED A GAINST THE SEPARATE ORDERS DATED 03-05-2013 OF THE CIT(A), AURANGA BAD RELATING TO ASSESSMENT YEAR 2005-06. 2. DELETION OF PENALTY OF RS.7,17,892/- IN THE CASE OF ITA NO.1519/PN/2013 AND DELETION OF PENALTY OF RS.7,14,508/- IN THE CASE / DATE OF HEARING :15.12.2015 / DATE OF PRONOUNCEMENT:23.12.2015 2 ITA NO.1519 & 1520/PN/2013 OF ITA NO.1520/PN/2013 ARE THE ONLY ISSUES RAISED BY TH E REVENUE IN THE ABOVE 2 APPEALS 3. THE LD. COUNSEL FOR THE ASSESSEE AT THE OUTSET SUB MITTED THAT THE TAX EFFECT ON THE GROUNDS RAISED BY THE REVENUE IS LESS THAN RS.10 LAKHS. THEREFORE, IN VIEW OF THE LATEST CIRCULAR OF CBDT NO.21 /2015 DATED 10-12-2015 THE APPEALS OF THE REVENUE ARE NOT M AINTAINABLE AND HAVE TO BE DISMISSED. IT IS FURTHER PROVIDED VIDE THE SA ID CIRCULAR ITSELF THAT THE SAID LIMIT WOULD BE APPLICABLE NOT ONLY TO ALL FUTURE TAX LITIGATIONS BUT EVEN TO THE PENDING APPEALS WHERE THE TAX INVOLVED IN THE APPEALS DOES NOT EXCEED RS.10 LAKHS AND THE SAME S HALL NOT BE PRESSED OR WITHDRAWN. 4. THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVEN UE FAIRLY AGREED TO THE CONTENTION RAISED BY THE LEARNED AUTHORIZ ED REPRESENTATIVE FOR THE ASSESSEE. 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE ISSUE ARISING IN THE PRESENT APPEAL IS IN RELATION TO THE AD DITIONS, WHEREIN THE TAX EFFECT IS LESS THAN RS.10 LAKHS. IN THIS BA CKGROUND, WE HAVE TO CONSIDER THE CIRCULAR NO.21/2015 DATED 10.12.2015 OF CBDT. THE CBDT VIDE THE SAID CIRCULAR HAS ANNOUNCED THAT SUBJ ECT TO CERTAIN EXCEPTIONS, NO DEPARTMENTAL APPEAL WOULD BE FILED AGAINST TH E RELIEF GIVEN BY THE CIT(A) BEFORE THE TRIBUNAL, WHERE THE TAX EFFE CT EXCLUDING INTEREST DOES NOT EXCEED RS.10 LAKHS. THE SAID INSTRUCTIO NS ARE MADE APPLICABLE NOT ONLY TO THE FUTURE APPEALS TO BE FILED BY TH E REVENUE BUT EVEN TO THE PENDING APPEALS WHERE THE TAX INVOLVED IN EA CH OF THE APPEAL DOES NOT EXCEED RS.10 LAKHS, THE SAME ARE INSTRUC TED NOT TO BE PRESSED OR TO BE WITHDRAWN BY THE REVENUE. IN VIEW TH EREOF, WHERE AN APPEAL IS PENDING BEFORE THE TRIBUNAL, IRRESPECTIVE OF THE Y EAR TO WHICH 3 ITA NO.1519 & 1520/PN/2013 IT RELATES, THE SAID INSTRUCTIONS OF THE CBDT WOULD BE APPLI CABLE AND THE APPEALS OF THE REVENUE PENDING BEFORE THE TRIBUNAL WH ERE THE TAX EFFECT IS LESS THAN RS.10 LAKHS WOULD BECOME NULLITY. THE RELE VANT EXTRACT 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 GIVEN UN DER:- S NO APPEALS IN INCOME - TAX MAT TERS 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 PRESCRIBED AB OVE. 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 WOULD HA VE BEEN CHARGEABLE HAD SUCH TOTAL INCOME BEEN REDUCED BY THE AMOUNT OF INC OME IN RESPECT OF THE ISSUES AGAINST WHICH APPEAL IS INTENDED TO BE FILED (HEREINAFTER REFERRED TO AS DISPUTED ISSUES). HOWEVER, THE TAX WILL NOT INCL UDE ANY INTEREST THEREON, EXCEPT WHERE CHARGEABILITY OF INTEREST ITSELF IS IN DISPUTE. IN CASE THE CHARGEABILITY OF INTEREST IS THE ISSUE UNDER DISPUT E, THE AMOUNT OF INTEREST SHALL BE THE TAX EFFECT. IN CASES WHERE RETURNED L OSS IS REDUCED OR ASSESSED AS INCOME, THE TAX EFFECT WOULD INCLUDE NOTIONAL TAX O N DISPUTED ADDITIONS. IN CASE OF PENALTY ORDERS, THE TAX EFFECT WILL MEAN QU ANTUM 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 ISSUES I N THE CASE OF EVERY ASSESSMENT. IF, IN THE CASE OF AN ASSESSEE, THE DI SPUTED ISSUES ARISE IN MORE THAN ONE ASSESSMENT YEAR, APPEAL, CAN BE FILED IN R ESPECT OF SUCH ASSESSMENT YEAR OR YEARS IN WHICH THE TAX EFFECT IN RESPECT OF THE DISPUTED ISSUES EXCEEDS THE MONETARY LIMIT SPECIFIED IN PARA 3. NO APPEAL SHALL BE FILED IN RESPECT OF AN ASSESSMENT YEAR OR YEARS IN WHICH THE TAX EFFECT IS LESS THAN THE MONETARY LIMIT SPECIFIED IN PARA 3. IN OTHER WORDS, HENCEFO RTH, APPEALS CAN BE FILED ONLY WITH REFERENCE TO THE TAX EFFECT IN THE RELEVANT AS SESSMENT YEAR. HOWEVER, IN CASE OF A COMPOSITE ORDER OF ANY HIGH COURT OF APPE LLATE AUTHORITY, WHICH INVOLVES MORE THAN ONE ASSESSMENT YEAR AND COMMON I SSUES IN MORE THAN ONE ASSESSMENT YEAR, APPEAL SHALL BE FILED IN RESPECT O F ALL SUCH ASSESSMENT YEARS EVEN IF THE TAX EFFECT IS LESS THAN THE PRESCRIBE D MONETARY LIMITS IN ANY OF THE YEAR(S), IF IT IS DECIDED TO FILE APPEAL IN RESPECT OF THE YEAR(S) IN WHICH TAX EFFECT EXCEEDS THE MONETARY LIMIT PRESCRIBED. IN CASE WHERE A COMPOSITE ORDER / JUDGMENT INVOLVES MORE THAN ONE ASSESSEE, E ACH ASSESSEE SHALL BE DEALT WITH SEPARATELY. 6. THE CBDT HAS FURTHER CLARIFIED THAT IN CASE THE DISPUTED ISSUE ARISES IN MORE THAN ONE ASSESSMENT YEAR, THEN THE APPE AL CAN BE FILED 4 ITA NO.1519 & 1520/PN/2013 IN RESPECT OF SUCH ASSESSMENT YEAR OR YEARS IN WHICH TH E TAX EFFECT IN RESPECT OF THE DISPUTED ISSUE EXCEEDS THE MONETARY LIMIT SPECIFIED IN PARA 3 I.E. RS.10 LAKHS BEFORE THE TRIBUNAL. IT IS FURTHER DIR ECTED THAT HENCEFORTH, THE APPEALS CAN BE FILED BY THE REVENUE ONLY WITH REFERENCE TO THE TAX EFFECT IN THE RELEVANT ASSESSMENT YEAR. HOWE VER, IN CASE OF A COMPOSITE ORDER OF ANY HIGH COURT OR APPELLATE AUTHORITY , WHICH INVOLVES MORE THAN ONE ASSESSMENT YEAR AND COMMON ISSU ES IN MORE THAN ONE ASSESSMENT YEAR, THEN APPEAL SHALL BE FILED IN RES PECT OF SUCH 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 APP EAL IN RESPECT OF THE YEAR(S) IN WHICH TAX EFFECT EXCEEDS THE MONETARY LIMIT PRESCRIBED. WHERE A COMPOSITE ORDER / JUDGMENT INVOLVES MORE THAN ONE ASSESSEE, THEN EACH ASSESSEE SHALL BE DEALT WITH SEP ARATELY. IT IS ALSO PROVIDED FURTHER VIDE PARAS 6 AND 7 THAT WHERE THE APPEAL BEFORE THE TRIBUNAL WAS NOT FILED ONLY ON ACCOUNT OF TAX EFFECT BE ING LESS THAN SPECIFIED MONETARY LIMIT, THEN THE INCOME-TAX DEPARTMENT S HALL NOT BE PRECLUDED FROM FILING AN APPEAL AGAINST THE DISPUTED ISSUES IN THE CASE OF THE SAME ASSESSEE FOR ANY OTHER ASSESSMENT YEAR, OR IN CASE OF ANY 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 CONTESTED ON MERITS NOTWITHSTANDING THAT THE TAX EFFECT ENTAILED IS LESS THAN T HE MONETARY LIMITS SPECIFIED. FURTHER, THE SPECIFIED MONETARY 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 APPEALS WHER E TAX EFFECT IS NOT QUANTIFIABLE OR NOT INVOLVED, SUCH AS THE CASE OF REGIST RATION OF TRUSTS OR INSTITUTIONS UNDER SECTION 12A OF THE ACT. IN SUCH CASES, THE 5 ITA NO.1519 & 1520/PN/2013 DECISION TO FILE AN APPEAL 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 THE MONET ARY LIMIT SPECIFIED ABOVE, THE COMMISSIONER OF INCOME-TAX SHALL SPECIFICALLY R ECORD THAT EVEN THOUGH THE DECISION IS NOT ACCEPTABLE, 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 ACQUIESCED IN THE DECISION ON TH E DISPUTED ISSUES. THE INCOME-TAX DEPARTMENT SHALL NOT BE PRECLUDED FROM F ILING AN APPEAL AGAINST THE DISPUTED ISSUES IN THE CASE OF THE SAME ASSESSE E FOR ANY OTHER ASSESSMENT YEAR, OR IN THE CASE OF ANY OTHER ASSESSEE FOR THE SAME OR ANY OTHER ASSESSMENT YEAR, IF THE TAX EFFECT EXCEEDS THE SPEC IFIED 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 IMPLICIT LY ACCEPTED THE DECISION OF THE TRIBUNAL OR COURT IN THE CASE OF THE ASSESSE E FOR ANY OTHER ASSESSMENT YEAR OR IN THE CASE OF ANY OTHER ASSESSEE FOR THE S AME OR ANY OTHER ASSESSMENT YEAR, BY NOT FILING AN APPEAL ON THE SAME DISPUTED ISSUES. THE DEPARTMENTAL REPRESENTATIVES/COUNSELS MUST MAKE EVERY EFFORT TO BRING TO THE NOTICE OF THE TRIBUNAL OR THE COURT THAT THE APPEAL IN SUCH CASES WAS NOT FILED OR NOT ADMITTED ONLY FOR THE REASON OF THE TAX EFFECT BEIN G LESS THAN THE SPECIFIED MONETARY LIMIT AND, THEREFORE, NO INFERENCE SHOULD BE DRAWN THAT THE DECISIONS RENDERED THEREIN WERE ACCEPTABLE TO THE D EPARTMENT. ACCORDINGLY, THEY SHOULD IMPRESS UPON THE TRIBUNAL OR THE COURT THAT SUCH CASES DO NOT HAVE ANY PRECEDENT VALUE. AS THE EVIDENCE OF NOT F ILING APPEAL DUE TO THIS INSTRUCTION MAY HAVE TO BE PRODUCED IN COURTS, THE JUDICIAL FOLDERS IN THE OFFICE OF CSIT MUST BE MAINTAINED IN A SYSTEMIC MAN NER FOR EASY RETRIEVAL. 8. ADVERSE JUDGMENTS RELATING TO THE FOLLOWING ISSU ES SHOULD BE CONTESTED ON MERITS NOTWITHSTANDING THAT THE TAX EFFECT ENTAI LED 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 INCOME TA X. FILING OF APPEALS IN OTHER DIRECT TAX MATTERS SHALL CONTINUE TO BE GOVER NED BY RELEVANT PROVISIONS OF STATUTE & RULES. FURTHER, FILING OF APPEAL IN C ASES OF INCOME TAX, WHERE THE TAX EFFECT IS NOT QUANTIFIABLE OR NOT INVOLVED, SUC H AS THE CASE OF REGISTRATION OF TRUSTS OR INSTITUTIONS UNDER SECTION 12A OF THE IT ACT, 1961, SHALL NOT BE GOVERNED BY THE LIMITS SPECIFIED IN PARA 3 ABOVE AN D DECISION TO FILE APPEAL IN SUCH CASES MAY BE TAKEN ON MERITS OF A PARTICULAR C ASE. 7. THE RETROSPECTIVE OPERATION OF THE INSTRUCTIONS TO PEN DING APPEALS IS PROVIDED IN PARA 10 OF THE CIRCULAR, WHICH READS AS UNDER:- 6 ITA NO.1519 & 1520/PN/2013 10. THIS INSTRUCTION WILL APPLY RETROSPECTIVELY TO PENDING APPEALS AND APPEALS TO BE FILED HENCEFORTH IN HIGH COURTS / TRI BUNALS. PENDING APPEALS BELOW THE SPECIFIED TAX LIMITS IN PARA 3 ABOVE MAY BE WITHDRAWN / NOT PRESSED. APPEALS BEFORE THE SUPREME COURT WILL BE GOVERNED BY THE INSTRUCTIONS ON THIS SUBJECT, OPERATIVE 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 APPEALS FILED BY THE REV ENUE, WHICH ARE PENDING BEFORE THE TRIBUNAL ARE NOT TO BE PRESSED O R WITHDRAWN BY THE REVENUE AUTHORITIES. SINCE THE TAX EFFECT IN THE INSTA NT APPEALS FILED BY THE REVENUE IS ADMITTEDLY LESS THAN RS.10 LAKHS IN EACH CASE, THEREFORE, IN VIEW OF THE INSTRUCTIONS OF CBDT AND THE ENTIR ETY OF FACTS, WE DISMISS THE APPEALS FILED BY THE REVENUE AS NOT MAINTAINABLE. 9. IN THE RESULT, BOTH THE APPEALS FILED BY THE REVENUE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 23-12-2015. SD/- SD/- ( VIKAS AWASTHY ) ( R.K. PANDA ) JUDICIAL MEMBER ACCOUNTANT MEMBER PUNE ; DATED : 23 RD DECEMBER, 2015. ( )'+ , / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. THE CIT(A) , AURANGABAD 4. 5. 6. THE CIT, AURANGABAD % ((), ), / DR, ITAT, A PUNE; . / GUARD FILE. / BY ORDER , // TRUE COPY // // % ( //TRUE COPY // 01 ( ) / SR. PRIVATE SECRETARY ), / ITAT, PUNE