DCIT, Cir-1(2), Kolkata, Kolkata V. M/s The Indian Steel Wire Products Ltd., Kolkata

ITA 1567/KOL/2016

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 6288 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 9 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-05-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2008-2009
• Appeal Filed On: 02-08-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ROBIN CHOUDHUR Y
• Assessee Lawyers: S M SURANA
• Keywords: Tax effect
• Section: 143(3)

Judgement Text

, C , IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH C KOLKATA BEFORE SHRI S.S.GODARA, JUDICIAL MEMBER AND DR. A.L. SAINI, ACCOUNTANT MEMBER ITA NO. 1567 / KOL / 20 16 ASSESSMENT YEAR :2008-09 DCIT, CIRCLE-1(2), AAYAKAR BHAWAN, P-7, CHOWRIGHEE SQUARE, R.NO.14, 7 TH FLOOR,KOLKATA-700 069 V/S . M/S THE INDIAN STEEL WIRE PRODUCTS LTD., 7, RED CROSS PLACE, KOLKATA-700 001 [ PAN NO.AABCT 1067 C ] /APPELLANT .. / RESPONDENT /BY APPELLANT SHRI ROBIN CHOUDHURY, ADDL. CIT-DR /BY RESPONDENT SHRI S.M. SURANA, ADVOCATE /DATE OF HEARING 05-02-2019 /DATE OF PRONOUNCEMENT 03-05-2019 / O R D E R PER S.S.GODARA, JUDICIAL MEMBER:- THIS REVENUES APPEAL FOR ASSESSMENT YEAR 2008-09, ARISES AGAINST THE COMMISSIONER OF INCOME-TAX (APPEALS)-1, KOLKATAS O RDER DATED 05.05.2016 PASSED IN CASE NO.271/CIT(A)-1/CIR-3/2010-11, INVOLVING PROCE EDINGS U/S. 143(3) OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT. HEARD BOTH THE SIDES. CASE FILE PERUSED. 2. IT IS SEEN AT THE OUTSET THAT THE TAX EFFECT ON THE DISPUTED ADDITIONS BEFORE US IS LESS THAN RS. 20 LACS IN CASES I.E. LESS THAN THE P RESCRIBED REVISED THRESHOLD LIMIT IN CBDTS LATEST CIRCULAR NO. 3/2018 DATED 11.07.2018. IT WILL BE PERTINENT TO REPRODUCE THE RELEVANT PORTION OF THE SAID CIRCULAR NO. 3/2018 DATED 11.07.2018:- 3 . HENCEFORTH, APPEALS/ SLPS SHALL NOT BE FILED IN CASES WHERE THE TAX EFFECT DOES NOT EXCEED THE MONETARY LIMITS GIVEN HEREUNDER: SL. ITA NO.1567/KOL/2016 A.Y. 2008-09 DCIT, CIR-1(2), KOL. VS. M/S THE I NDIAN STEEL WIRE PRODUCTS LTD. PAGE 2 NO. APPEALS/SLPS IN INCOME-TAX MATTERS MONETARY LIMIT (IN RS) 1. BEFORE APPELLATE TRIBUNAL 20,00,000/- 2. BEFORE HIGH COURT 50,00,000/- 3. BEFORE SUPREME COURT 1,00,00,000/- IT IS CLARIFIED THAT AN APPEAL SHOULD NOT BE FILED MERELY BECAUSE THE TAX EFFECT IN A CASE EXCEEDS THE MONETARY LIMITS PRESCRIBED ABOVE. FILIN G OF APPEAL IN SUCH CASES IS TO BE DECIDED ON MERITS OF THE CASE. 4. FOR THIS PURPOSE, ' TAX EFFECT ' MEANS THE DIFFERENCE BETWEEN THE TAX ON THE TOTAL INCOME ASSESSED AND THE TAX THAT WOULD HAVE BEEN CH ARGEABLE HAD SUCH TOTAL INCOME BEEN REDUCED BY THE AMOUNT OF INCOME IN RESPECT OF THE ISSUES AGAINST WHICH APPEAL IS INTENDED TO BE FILED (HEREINAFTER REFERRED TO AS ' DISPUTED ISSUES ). FURTHER, ' TAX EFFECT ' SHALL BE TAX INCLUDING APPLICABLE SURCHARGE AND CES S. HOWEVER, THE TAX WILL NOT INCLUDE ANY INTEREST THEREON, EXCEPT WHERE CHARGEAB ILITY OF INTEREST ITSELF IS IN DISPUTE. IN CASE THE CHARGEABILITY OF INTEREST IS THE ISSUE UNDER DISPUTE, THE AMOUNT OF INTEREST SHALL BE THE TAX EFFECT. IN CASES WHERE RETURNED LO SS IS REDUCED OR ASSESSED AS INCOME, THE TAX EFFECT WOULD INCLUDE NOTIONAL TAX ON DISPUT ED ADDITIONS. IN CASE OF PENALTY ORDERS, THE TAX EFFECT WILL MEAN QUANTUM OF PENALTY DELETED OR REDUCED IN THE ORDER TO BE APPEALED AGAINST. 3.1 WE FIND THAT INTENTION BEHIND THE CIRCULAR NO3/ 2018 DATED 11.07.2018 NEEDS TO BE UNDERSTOOD IN THE FOLLOWING PERSPECTIVE:- BY PASSAGE OF TIME, THE MONEY VALUE HAS GONE DOWN, THE COST OF LITIGATION EXPENSES HAS GONE UP, NUMBER OF ASSESSES ON THE FILES OF TH E DEPARTMENT HAVE BEEN INCREASED AND CONSEQUENTLY, THE BURDEN ON THE DEPARTMENT IS A LSO INCREASED TO A TREMENDOUS EXTENT. THE CORRIDORS OF THE SUPERIOR COURTS ARE CH OKED WITH HUGE PENDENCY OF CASES. IN THIS VIEW OF THE MATTER, THE CBDT HAS RIGHTLY TA KEN A DECISION TO REVISE THE MONETARY LIMITS IN TUNE WITH THE PRESENT VALUE OF M ONEY AND WITH A VIEW TO REDUCE THE LITIGATION AND OFFERING RELIEF TO SMALL TAX PAYER S. THIS IS ALSO IN VIEW OF THE FACT THAT TIME AND ENERGY OF THE DEPARTMENT COULD BE USED MOR E PRODUCTIVELY AND EFFICIENTLY TO CATCH HOLD OF BIG FISHES, WHO IN TURN WOULD CONTRIB UTE MORE TO THE DEVELOPMENT OF THE COUNTRY. 3.2. ON PERUSAL OF THE CIRCULAR NO. 3/2018 DATED 11 .07.2018 AND THE MATERIALS AVAILABLE ON RECORD, WE DO NOT SEE THIS CASE FALLIN G UNDER ANY OF THE EXCEPTIONS CONTEMPLATED IN THE SAID CIRCULAR PER SE . WE ALSO FIND THAT THIS CIRCULAR MAKES IT VERY CLEAR THAT THE REVISED MONETARY LIMITS SHALL APPLY RETROSPECTIVELY TO PENDING APPEALS AS WELL. H ONBLE APEX COURT IN COMMISSIONER OF CUSTOMS VS IND IAN OIL CORPORATION LTD REPORTED IN 267 ITR 272 (SC) HAS SETTLED THE LAW THAT CBDTS CIRCULARS ARE VERY MUCH BINDING ON REVENUE AUTHORITIES. WE THUS HOLD THAT T HIS REVENUES APPEAL RAISING SOLE ISSUE OF 5480 LAC DESERVE TO BE DISMISSED IN TERMS OF LOW TA X EFFECT. WE MAKE IT CLEAR THAT IT SHALL VERY MUCH OPEN FOR THE REVENUE TO SEE K NECESSARY RECTIFICATION IN CASE IT ITA NO.1567/KOL/2016 A.Y. 2008-09 DCIT, CIR-1(2), KOL. VS. M/S THE I NDIAN STEEL WIRE PRODUCTS LTD. PAGE 3 IS FOUND THAT ANY OF THESE APPEALS INVOLVE OPERATIO NS OF EXCEPTION CLAUSES IN THE TAX EFFECT CIRCULAR AS PER LAW. 4. THIS REVENUES APPEAL IS DISMISSED FOR INVOLVING LOWER THAN THE PRESCRIBED MINIMUM TAX EFFECT. ORDER PRONOUNCED IN THE OPEN COURT 03/ 05/2019 SD/- SD/- ( %) (' %) (DR.A.L. SAINI) (S.S.GODARA) (ACCOUNTANT MEMBER) (JUDICIAL MEMBER) KOLKATA, *DKP, SR.P.S (- 03 / 05 /201 9 / COPY OF ORDER FORWARDED TO:- 1. /APPELLANT-DCIT, CIR-1(2),AYAKAR BHAWAN, P-7, CHOWR INGHEE SQUARE, ROOM NO. 14, 7 TH FLOOR, KOLKATA-69 2. /RESPONDENT-M/STHE INDIAN STEEL & WIRE PRODUCTS LTD .,7, RED CROSS PLACE KOL-001 3. 3 4 / CONCERNED CIT KOLKATA 4. 4- / CIT (A) KOLKATA 5. 7 ''3, 3, / DR, ITAT, KOLKATA 6. < / GUARD FILE. BY ORDER/ , /TRUE COPY/ 3,