ACIT, Nashik V. Shri TARACHAND BACHUMAL DALWANI, Nashik

ITA 1551/PUN/2013

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 2667 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 7 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-03-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 03-03-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 05-08-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: HITENDRA NINAWE
• 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.1551/PN/2013 #& & / ASSESSMENT YEAR : 2009-10 ACIT, CENTRAL CIRCLE-I, NASHIK . / APPELLANT V/S SHRI TARACHAND BACHUMAN DALWANI, PROP. OF RAJAN BACHUMAN & CO. DR.B.A. ROAD, NASHIK ROAD, NASHIK PAN NO.AANPD2375G . / RESPONDENT / ASSESSEE BY : SHRI PRAMOD SHINGTE / REVENUE BY : SHRI HITENDRA NINAWE / ORDER PER R.K.PANDA, AM : THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAINST THE OR DER DATED 01-05-2013 OF THE CIT(A)-II, NASHIK RELATING TO ASSESSMENT YEAR 2009-10. 2. THE REVENUE IN THE IMPUGNED ORDER HAS CHALLENGED THE ORDER OF THE CIT(A) IN DELETING THE PENALTY OF RS.8,49,750/- LEVIED BY THE A O. U/S.271(1)(C). 3. THE LD. COUNSEL FOR THE ASSESSEE AT THE OUTSET SUBMIT TED THAT THE TAX EFFECT IN THE INSTANT APPEAL FILED BY THE REVENUE IS LESS THA N RS.10 LAKHS. THEREFORE, IN VIEW OF THE LATEST CIRCULAR OF CBDT NO.21/2015 DATED 10-12- 2015 THE APPEAL OF THE REVENUE IS NOT MAINTAINABLE AND S HOULD BE DISMISSED. / DATE OF HEARING :10.03.2016 / DATE OF PRONOUNCEMENT:10.03.2016 2 ITA NO.1551/PN/2013 4. THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVEN UE FAIRLY CONCEDED THAT THE TAX EFFECT IN THE GROUND RAISED BY TH E 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 THA N RS.10 LAKHS. IN THIS BACKGROUND, WE HAVE TO CONSIDER THE CIRCULAR NO.21/2 015 DATED 10.12.2015 OF CBDT. THE CBDT VIDE THE SAID CIRCULAR HAS ANN OUNCED THAT SUBJECT TO CERTAIN EXCEPTIONS, NO DEPARTMENTAL APPEAL WO ULD BE FILED AGAINST THE 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 APPEALS TO BE FILED BY THE 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 INSTRUCTED N OT TO BE PRESSED OR TO BE WITHDRAWN BY THE REVENUE. IN VIEW THEREOF, WHERE AN APPEAL IS PENDING BEFORE THE TRIBUNAL, IRRESPECTIVE OF THE YEAR TO WHICH IT R ELATES, THE SAID INSTRUCTIONS OF THE CBDT WOULD BE APPLICABLE AND THE APPEA LS OF THE REVENUE PENDING BEFORE THE TRIBUNAL WHERE THE TAX EFFECT IS LESS THAN RS.10 LAKHS WOULD BECOME NULLITY. THE RELEVANT EXTRACT OF THE CIR CULAR IS AS UNDER:- 3. HENCEFORTH, APPEALS/SLPS SHALL NOT BE FILED IN CASES WHERE THE TAX EFFECT DOES NOT EXCEED THE MONETARY LIMITS GIVEN 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 PRESCRIBED 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 WOULD HAVE B EEN CHARGEABLE HAD SUCH TOTAL INCOME BEEN REDUCED BY THE AMOUNT OF INCOME IN RESP ECT OF THE ISSUES AGAINST WHICH APPEAL IS INTENDED TO BE FILED (HEREINAFTER REFERRE D TO AS DISPUTED ISSUES). 3 ITA NO.1551/PN/2013 HOWEVER, THE TAX WILL NOT INCLUDE ANY INTEREST THER EON, 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 BE THE TAX EF FECT. IN CASES WHERE RETURNED LOSS IS REDUCED OR ASSESSED AS INCOME, THE TAX EFFECT WO ULD INCLUDE NOTIONAL TAX ON DISPUTED ADDITIONS. IN CASE OF PENALTY ORDERS, THE TAX EFFECT WILL MEAN QUANTUM OF PENALTY DELETED OR REDUCED IN THE ORDER TO BE APPEA LED 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 DISPUTED ISSUES ARI SE IN MORE THAN ONE ASSESSMENT YEAR, APPEAL, CAN BE FILED IN RESPECT OF SUCH ASSES SMENT YEAR OR YEARS IN WHICH THE TAX EFFECT IN RESPECT OF THE DISPUTED ISSUES EXCEED S 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 SPEC IFIED IN PARA 3. IN OTHER WORDS, HENCEFORTH, APPEALS CAN BE FILED ONLY WITH REFERENC E TO THE TAX EFFECT IN THE RELEVANT ASSESSMENT YEAR. HOWEVER, IN CASE OF A COMPOSITE O RDER OF ANY HIGH COURT OF APPELLATE AUTHORITY, WHICH INVOLVES MORE THAN ONE A SSESSMENT YEAR AND COMMON ISSUES IN MORE THAN ONE ASSESSMENT YEAR, APPEAL SHA LL 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 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, EACH ASSE SSEE 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 APPEAL CAN BE FILED IN RESPECT OF SUCH ASSESSMENT YEAR OR YEARS IN WHICH THE TAX EFFECT IN RESPECT OF THE DISPUTED ISSUE EXCEEDS THE MONETARY LIMIT SPECIFIED IN PAR A 3 I.E. RS.10 LAKHS BEFORE THE TRIBUNAL. IT IS FURTHER DIRECTED THAT HENCEFOR TH, THE APPEALS CAN BE FILED BY THE REVENUE ONLY WITH REFERENCE TO THE TAX E FFECT IN THE RELEVANT ASSESSMENT YEAR. HOWEVER, IN CASE OF A COMPOSITE ORDER OF ANY HIGH COURT OR APPELLATE AUTHORITY, WHICH INVOLVES MORE THAN ONE ASSESSME NT YEAR AND COMMON ISSUES IN MORE THAN ONE ASSESSMENT YEAR, THEN A PPEAL SHALL BE FILED IN RESPECT OF SUCH ASSESSMENT YEAR, EVEN IF THE TAX EFFECT IS LESS THAN THE PRESCRIBED MONETARY LIMITS IN ANY OF THE YEAR(S), IF IT IS DECIDE D TO FILE APPEAL 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 SEPARAT ELY. IT IS ALSO PROVIDED FURTHER VIDE PARAS 6 AND 7 THAT WHERE THE AP PEAL BEFORE THE TRIBUNAL WAS NOT FILED ONLY ON ACCOUNT OF TAX EFFECT BEING LESS THAN SPECIFIED 4 ITA NO.1551/PN/2013 MONETARY LIMIT, THEN THE INCOME-TAX DEPARTMENT SHALL 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 EFFE CT ENTAILED IS LESS THAN THE MONETARY LIMITS SPECIFIED. FURTHER, THE SPECIFIED M ONETARY 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 REGISTRATIO N OF TRUSTS OR INSTITUTIONS UNDER SECTION 12A OF THE ACT. IN SUCH CASES , THE DECISION TO FILE AN APPEAL IS TO BE TAKEN ON THE MERITS OF A PARTICULARS C ASE. 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 RECOR D THAT EVEN THOUGH THE DECISION IS NOT ACCEPTABLE, APPEAL IS NOT BEING FILED ONLY O N 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 DE PARTMENT HAS ACQUIESCED IN THE DECISION ON THE DISPUTED ISSUES. THE INCOME-TAX DE PARTMENT SHALL NOT BE PRECLUDED FROM FILING AN APPEAL AGAINST THE DISPUTED ISSUES I N THE CASE OF THE SAME ASSESSEE FOR ANY OTHER ASSESSMENT YEAR, OR IN THE CASE OF ANY OT HER ASSESSEE FOR THE SAME OR ANY OTHER ASSESSMENT YEAR, IF THE TAX EFFECT EXCEEDS TH E 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 TRI BUNAL OR THE COURT ONLY ON THE GROUND THAT THE DEPARTMENT HAS IMPLICITLY ACCEPTED THE DECISION OF THE TRIBUNAL OR COURT IN THE CASE OF THE ASSESSEE FOR ANY OTHER ASS ESSMENT YEAR OR IN THE CASE OF ANY OTHER ASSESSEE FOR THE SAME OR ANY OTHER ASSESSMENT YEAR, BY NOT FILING AN APPEAL ON THE SAME DISPUTED ISSUES. THE DEPARTMENTAL REPRESE NTATIVES/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 T HE REASON OF THE TAX EFFECT BEING LESS THAN THE SPECIFIED MONETARY LIMIT AND, THEREFO RE, NO INFERENCE SHOULD BE DRAWN THAT THE 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 COURTS, THE JUDICIAL FOLDERS IN THE OFFICE OF CSIT MUST BE MAINTAINED IN A SYSTEMIC MANNER FOR EA SY RETRIEVAL. 8. ADVERSE JUDGMENTS RELATING TO THE FOLLOWING ISSU ES SHOULD BE CONTESTED ON MERITS NOTWITHSTANDING THAT THE TAX EFFECT ENTAILED IS LESS THAN THE MONETARY LIMITS SPECIFIED IN PARA 3 ABOVE OR THERE IS NO TAX EFFECT : 5 ITA NO.1551/PN/2013 (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 TAX. FILI NG OF APPEALS IN OTHER DIRECT TAX MATTERS SHALL CONTINUE TO BE GOVERNED BY RELEVANT P ROVISIONS OF STATUTE & RULES. FURTHER, FILING OF APPEAL IN CASES OF INCOME TAX, W HERE THE TAX EFFECT IS NOT QUANTIFIABLE OR NOT INVOLVED, SUCH AS THE CASE OF R EGISTRATION OF TRUSTS OR INSTITUTIONS UNDER SECTION 12A OF THE IT ACT, 1961, SHALL NOT BE GOVERNED BY THE 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. PE NDING APPEALS BELOW THE SPECIFIED TAX LIMITS IN PARA 3 ABOVE MAY BE WITHDRAWN / NOT P RESSED. 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 T HE TAX EFFECT IS LESS THAN RS.10 LAKHS, THE APPEALS FILED BY THE REVENUE, WH ICH ARE PENDING BEFORE THE TRIBUNAL ARE NOT TO BE PRESSED OR WITHDRAWN BY THE REVENUE AUTHORITIES. SINCE THE TAX EFFECT 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 B Y 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 HEARING ITSELF, I.E. ON 10-03-2016. SD/- SD/- ( VIKAS AWASTHY ) ( R.K. PANDA ) JUDICIAL MEMBER ACCOUNTANT MEMBER PUNE ; DATED : 10 TH MARCH, 2016. 6 ITA NO.1551/PN/2013 ) *#,! -! / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. THE CIT(A) - II, NASHIK 4. 5. 6. THE CIT-II, NAHSIK $ ''(, (, / DR, ITAT, B PUNE; - / GUARD FILE. / BY ORDER , // TRUE COPY // // $ ' //TRUE COPY // /0 ' ( / SR. PRIVATE SECRETARY (, / ITAT, PUNE