Addl. CIT, Noida V. M/s. Swaran Jayanti Rail Nagar Flat Owners Association, Noida

ITA 155/DEL/2010

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 3789 (ITAT-DELHI)
• Duration Of Justice: 5 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-06-2010
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 21-06-2010
• Assessment Year: 2005-2006
• Appeal Filed On: 11-01-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Tax effect

Judgement Text

ITA NO. 155/DEL/2010 A.Y. 2005-06 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH G NEW DELHI BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER I.T.A. NO. 155/DEL/2010 A.Y. 2005-06 ADDL. COMMISSIONER OF INCOME TAX, VS. M/S SWARAN JAYANTI RAIL NAGAR FLAT NOIDA RANGE, NOIDA, 2 ND FLOOR, OWNERS ASSOCIATION, A-1, SECTOR-50, G-BLOCK, SHOPPING COMPLEX, NOIDA SECTOR-20, NOIDA-201301 (UP) (PAN: AADTS4242H) [APPELLANT] (RESPONDENT) ASSESSEE : SH. A.K. KUNDRA, ADVOCATE DEPARTMENT BY : MRS. LEENA SRIVASTAVA, DR ORDER PER SHAMIM YAHYA, AM THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST T HE ORDER OF THE CIT(A) DATED 29.10.2009 FOR THE ASSESSMENT YEAR 2005-06. 2. THE ISSUE RAISED READS AS UNDER:- WHETHER LD. CIT(A) IS JUSTIFIED IN HOLDING THAT TH E INTEREST EARNED ON BANK FDR IS EXEMPT FROM TAX ON THE PRINCIPLE & DOCTRINE OF MUTU ALITY. 3. AT THE THRESHOLD, WE NOTE THAT THE TAX EFFECT I N THIS CASE IS BELOW RS. 2 LAKHS, FIXED BY THE CBDT FOR FILING THE APPEAL BEFORE THE TRIBUNAL VIDE INSTRUCTION NO. 5 DATED 16.7.2007. WHILE CONSIDERING THE EFFECT OF CBDT I NSTRUCTIONS IN THIS REGARD, ITAT DELHI BENCHES ARE CONSISTENTLY TAKING THE VIEW THAT REVENU E AUTHORITIES MUST GIVE RESPECT TO THE C.B.D.T. CIRCULARS AND SHOULD NOT FILE APPEAL I N SMALL AND PETTY CASES. THE WHOLE IDEA ITA NO. 155/DEL/2010 A.Y. 2005-06 2 OF THE CIRCULAR IS NOT TO WASTE ENERGY OF THE DEPAR TMENT ON SMALL MATTERS AND SAVE IT FOR HIGH-TAX YIELDING CASES. 4. IN OUR ABOVE VIEW, WE FIND SUPPORT FROM THE RECE NT DECISION OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF COMMISSIONER OF IN COME TAX VS. PITHWA ENGG. WORKS, [2005] 197 CTR (BOM) 655 : [2005] 276 ITR 519 (BOM) WHEREIN THEIR LORDSHIPS FOLLOWING THEIR ORDER IN THE CASE OF CIT VS. CAMCO COLOUR CO. [2002] 173 CTR (BOM) 255 : [2002] 254 ITR 565 (BOM) HELD THAT INSTRUCTION DT. 27 TH MARCH, 2000 REFLECT THE POLICY DECISION TAKEN BY THE BOARD NOT TO RAISE QUESTIONS OF LAW WHE RE THE TAX EFFECT IS LESS THAN THE AMOUNT PRESCRIBED WITH A VIEW TO REDUCE LITIGATIONS BEFORE THE HIGH COURTS AND THE SUPREME COURT. THE SAID CIRCULAR IS BINDING ON THE REVENUE. ONE FAILS TO UNDERSTAND HOW THE REVENUE CAN CONTEND THAT SO FAR AS NEW CASE S ARE CONCERNED, THE CIRCULAR ISSUED BY THE BOARD IS BINDING ON THEM AND IN COMPLIANCE W ITH THE SAID INSTRUCTIONS, THEY DO NOT FILE REFERENCES IF THE TAX EFFECT IS LESS THAN RS. 2 LAKHS, BUT THE SAME APPROACH IS NOT ADOPTED WITH RESPECT TO THE OLD REFERRED CASES EVEN IF THE TAX EFFECT IS LEAS THAN RS. 2 LAKHS. THERE IS NO LOGIC BEHIND THIS APPROACH. BOA RDS CIRCULAR DT. 27 TH MARCH, 2000 IS VERY MUCH APPLICABLE EVEN TO THE OLD REFERENCES WHI CH ARE STILL UNDECIDED. THE DEPARTMENT IS NOT JUSTIFIED IN PROCEEDING WITH THE OLD REFERENCES WHEREIN THE TAX IMPACT IS MINIMAL. THUS, THERE IS NO JUSTIFICATION TO PRO CEED WITH DECADES OLD REFERENCES HAVING NEGLIGIBLE TAX EFFECT. 5. FOR SIMILAR PROPOSITION, WE ALSO FIND SUPPORT FR OM THE DECISION OF HIGH COURT OF DELHI IN THE CASE OF COMMISSIONER OF INCOME TAX VS. PRADEEP KUMAR GUPTA, [2007] 207 CTR (DEL) 115 WHEREIN THEIR LORDSHIPS HELD THAT TAX EFFECT BEING LESS THAN RS. 2 LAKH, THE APPEAL FILED BY THE REVENUE AGAINST THE CBDT INSTRU CTION WAS NOT MAINTAINABLE. 6. IN THIS VIEW OF THE MATTER AND RESPECTFULLY FOLL OWING THE DECISIONS (SUPRA), IT IS HELD THAT SINCE THE TAX EFFECT INVOLVED IN THE INST ANT APPEAL OF THE REVENUE IS LESS THAN RS. 2 LAC, THE SAME IS AGAINST THE INSTRUCTIONS ISS UED BY THE CBDT AND, HENCE, NOT ITA NO. 155/DEL/2010 A.Y. 2005-06 3 MAINTAINABLE BEFORE THE TRIBUNAL. ACCORDINGLY, THE APPEAL FILED BY THE REVENUE IS LIABLE TO BE DISMISSED ON THIS GROUND ALONE AND THE SAME I S DISMISSED ACCORDINGLY. 7. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 21/06/201 0, UPON CONCLUSION OF HEARING. SD/- SD/- [RAJPAL YADAV] [SHAMIM YAHYA] JUDICIAL MEMBER ACCOUNTANT MEMBER DATE 21/06/2010 SRB COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, DEPUTY REGISTRAR, ITAT, DELHI BENCHES