Income TAx Officer Ward-6(3)(1), Bangalore V. Shri Altaf Pasha , Bangalore

ITA 1623/BANG/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 7120 (ITAT-BANGALORE)
• Duration Of Justice: 4 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-12-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2011-2012
• Appeal Filed On: 31-07-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: M RAVI KIRAN
• Keywords: Audit objection; Tax effect

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC - C BENCH : BANGALORE BEFORE SHRI SUNIL KUMAR YADAV , JUDICIAL MEMBER ITA NO. 1623/BANG/2017 ASSESSMENT YEAR : 201 1 - 1 2 THE INCOME TAX OFFICER, WARD 6(3)(1), BANGALORE. VS. SHRI ALTAF PASHA, NO.13, 37/C SULOCHANA, 1 ST MAIN ROAD, T.P. VENUGOPAL LAYOUT, OPP. SBM COLONY, ANAND NAGAR, BANGALORE 560 042. PAN: AJZPP 7838F APPELLANT RESPONDENT APPELLANT BY : SHRI M . RAJASEKHAR, ADDL. CIT(DR) RESPONDENT BY : SHRI M . RAVI KIRAN, CA DATE OF HEARING : 27.11.2017 DATE OF PRONOUNCEMENT : 15 .1 2 .2017 O R D E R THIS APPEAL IS BY THE REVENUE AGAINST THE ORDER OF CIT(APPEALS) INTER ALIA ON THE FOLLOWING GROUNDS:- 1. THE ORDER OF THE CIT (APPEALS) IS OPPOSED TO LAW AND THE FACTS AND CIRCUMSTANCES OF THE CASE. 2. WHETHER LD. CIT(A) IS JUSTIFIED IN DELETING THE ADDITION OF RS.25,10,263 WHEN THE AO HAD MADE THE ADDITION BASE D ON THE REPLY OF M/S S.M. ENTERPRISES. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE CIT(A) ERRED IN DECIDING THE MATTER BASED ON ADDITIONAL EV IDENCES SUBMITTED BY THE ASSESSEE IN SPITE OF THE FACT THAT THE ASSESSEE COULD NOT PRODUCE ANY DOCUMENTS DURING THE ASSESSME NT ITA NO.1623/BANG/2017 PAGE 2 OF 3 PROCEEDINGS AND EXPRESSED HIS INABILITY TO PRODUCE THE SAME, WHICH IS CONTRAVENED TO THE PROVISION OF RULE 46A(3 ). 4. FOR THESE AND SUCH OTHER GROUNDS THAT MAY BE URG ED AT THE TIME OF HEARING, IT IS HUMBLY PRAYED THAT THE ORDER OF THE CIT(A), IN SO FAR AS IT RELATES TO THE ABOVE GROUNDS MAY BE REVERSED AND THAT OF THE ASSESSING OFFICER BE RESTORED. 5. THE APPELLANT CRAVES LEAVE TO ADD, TO ALTER, TO AMEND OR DELETE ANY OF THE GROUNDS THAT MAY BE URGED AT THE TIME OF HEARING OF THE APPEAL. 2. DURING THE COURSE OF HEARING, THE LD. COUNSEL FO R THE ASSESSEE POINTED OUT THAT THE TAX EFFECT INVOLVED IN THIS AP PEAL WAS LESS THAN RS.10 LAKHS FOR THE IMPUGNED ASSESSMENT YEAR, THEREFORE B Y VIRTUE OF CIRCULAR NO.21/2015, DT.10.12.2015, TAX EFFECT IS BELOW THE PRESCRIBED LIMIT LAID DOWN FOR FILING APPEALS BEFORE THIS TRIBUNAL. 3. LD. DR SUBMITTED THAT PARA 8 OF THE CIRCULAR WAS NOT APPLICABLE IN THIS CASE. THEREFORE, HE DID NOT OBJECT TO THE APP LICATION OF THE CIRCULAR. 4. HAVING CAREFULLY EXAMINED THE ORDERS OF LOWER AU THORITIES IN THE LIGHT OF RIVAL SUBMISSIONS, WE FIND THAT THE TAX EFFECT O N THE IMPUGNED ISSUE IS LESS THAN RS.10 LAKHS. PARA 4 OF THE CIRCULAR NO.2 1/2015 (SUPRA) IS REPRODUCED HEREUNDER : 4. FOR THIS PURPOSE, TAX EFFECT MEANS THE DIFFER ENCE BETWEEN THE TAX ON THE TOTAL INCOME ASSESSED AND TH E TAX THAT WOULD HAVE BEEN CHARGEABLE HAD SUCH TOTAL INCOME BE EN REDUCED BY THE AMOUNT OF INCOME IN RESPECT OF THE ISSUES AG AINST WHICH APPEAL IS INTENDED TO BE FILED (HEREINAFTER REFERRE D TO AS DISPUTED ISSUES). HOWEVER THE TAX WILL NOT INCLU DE ANY INTEREST THEREON, EXCEPT WHERE CHARGEABILITY OF INTEREST IT SELF IS IN DISPUTE. IN CASE THE CHARGEABILITY OF INTEREST IS THE ISSUE UNDER DISPUTE, THE AMOUNT OF INTEREST SHALL BE THE TAX EFFECT. IN CAS ES WHERE RETURNED LOSS IS REDUCED OR ASSESSED AS INCOME, THE TAX EFFE CT WOULD INCLUDE NOTIONAL TAX ON DISPUTED ADDITIONS. IN CAS E OF PENALTY ORDERS, THE TAX EFFECT WILL MEAN QUANTUM OF PENALTY DELETED OR REDUCED IN THE ORDER TO BE APPEALED AGAINST. ITA NO.1623/BANG/2017 PAGE 3 OF 3 5. THE ASSESSEE HAD NOT CHALLENGED THE CONSTITUTI ONAL VALIDITY OF ANY PROVISIONS OF THE ACT NOR HAD IT CHALLENGED THE LEG ALITY OF THE CIRCULAR. REVENUE HAS NOT BROUGHT TO OUR NOTICE ANYTHING TO S HOW THAT THE APPEAL AROSE ON AN ISSUE EMANATING FROM ANY REVENUE AUDIT OBJECTIONS ACCEPTED BY THE DEPARTMENT. ADDITION GIVING RISE TO THE APP EAL DOES NOT RELATE TO ANY UNDISCLOSED FOREIGN ASSETS / BANK ACCOUNTS. THUS, WE FIND THAT CIRCULAR NO.21/2015 (SUPRA) IS SQUARELY APPLICABLE IN THIS C ASE. HOWEVER IF REVENUE FINDS THAT APPEAL ARISES OUT OF ISSUES EMAN ATING FROM AUDIT OBJECTION IT WILL BE FREE TO FILE NECESSARY PETITIO N SEEKING RECALL OF THIS ORDER. WITH THE ABOVE OBSERVATIONS APPEAL OF THE REVENUE I S THEREFORE DISMISSED. 6. IN THE RESULT, THE APPEAL BY THE REVENUE IS DISM ISSED. PRONOUNCED IN THE OPEN COURT ON THIS 15 TH DECEMBER, 2017. SD/- ( SUNIL KUMAR YADAV ) JUDICIAL MEMBER BANGALORE, DATED, THE 15 TH DECEMBER, 2017. / D ESAI S MURTHY / COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR, ITAT, BANGALORE.