DCIT, Circle-7(1), Kolkata, Kolkata V. M/s M.L. Dalmia & Co. Ltd., Kolkata

ITA 1627/KOL/2016

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 4552 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 11 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-08-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 12-08-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Tax effect
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : KOLKATA [BEFORE HONBLE SHRI ABY. T. VARKEY, JM & SHRI M. BALAGANESH, AM ] I.T.A NO. 1627/KOL/20 16 ASSESSMENT YEAR : 2009-1 0 DCIT, CIRCLE-7(1), KOLKATA -VS- M/S M.L. DAL MIA & CO. LTD. [PAN: AABCM 7841 F ] (APPELLANT) (RESPONDENT) FOR THE APPELLANT : SHRI SALLONG YADEN, AD DL. CIT, SR. DR FOR THE RESPONDENT : SHRI D.S. DAMLE, FCA DATE OF HEARING : 12.07.2018 DATE OF PRONOUNCEMENT : 01.08.2018 ORDER PER M.BALAGANESH, AM 1. THIS APPEAL BY THE REVENUE ARISES OUT OF THE O RDER OF THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS)-18, KOLKATA [IN SHORT THE LD CIT(A)] IN APPEAL NO. 230/CIT(A)-18/11-12/ITO, WD.-7(1)/KOL DA TED 10.05.2016 AGAINST THE ORDER PASSED BY THE JCIT(OSD), ODS TO CIT-III, KOLKATA [ IN SHORT THE LD AO] UNDER SECTION 143(3) OF THE INCOME TAX ACT, 196 1 (IN SHORT THE ACT) DATED 14.12.2011 FOR THE ASSESSMENT YEAR 2009-10. 2 ITA NO.1627/KOL/2016 M/S M.L. DALMIA & CO. LTD. A.YR.2009-10 2 2. RECENTLY THE CBDT HAS ISSUED CIRCULAR NO. 3 /2018 DATED 11.07.2018, WHEREBY THE MONETARY LIMITS FOR FILING OF APPEALS BY THE DEPARTMENT BEFORE INCOME TAX APPELLATE TRIBUNAL AND HIGH COURTS AND SLP BEFORE SUPREME COURT HAVE BEEN INCREASED AS MEASURE FOR REDUCING LITIGAT ION. THE REVISED MONETARY LIMITS LAID DOWN IN PARA-3 OF THIS CIRCULAR AND THE MANNER OF COMPUTING TAX EFFECT AS LAID DOWN IN PARA-4 OF THIS CIRCULAR ARE AS FOLL OWS: 3 . HENCEFORTH, APPEALS/ SLPS SHALL NOT BE FILED I N CASES WHERE THE TAX EFFECT DOES NOT EXCEED THE MONETARY LIMITS GIVEN HEREUNDER : SL. 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. 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 BEEN CH ARGEABLE 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 R EFERRED TO AS 'DISPUTED ISSUES). FURTHER, 'TAX EFFECT' SHALL BE TAX INCLUDING APPLIC ABLE SURCHARGE AND CESS. HOWEVER, THE TAX WILL NOT INCLUDE ANY INTEREST THER EON, EXCEPT WHERE CHARGEABILITY OF INTEREST ITSELF IS IN DISPUTE. IN CASE THE CHARGEABILITY OF INTEREST IS THE ISSUE UNDER DISPUTE, THE AMOUNT OF INTEREST SHA LL BE THE TAX EFFECT. IN CASES WHERE RETURNED LOSS IS REDUCED OR ASSESSED AS INCOM E, THE TAX EFFECT WOULD INCLUDE NOTIONAL TAX ON DISPUTED ADDITIONS. IN CASE OF PENALTY ORDERS, THE TAX EFFECT WILL MEAN QUANTUM OF PENALTY DELETED OR REDU CED IN THE ORDER TO BE APPEALED AGAINST. 3. IN PARA-13 OF THE SAID CIRCULAR IT HAS FURTHER BEEN CLARIFIED THAT THE REVISED MONETARY LIMITS WILL APPLY RETROSPECTIVELY. THE RE LEVANT PARA-13 OF THE CIRCULAR READS THUS: 3 ITA NO.1627/KOL/2016 M/S M.L. DALMIA & CO. LTD. A.YR.2009-10 3 13. THIS CIRCULAR WILL APPLY TO SLPS/APPEALS/CROSS OBJECTIONS/REFERENCES TO BE FILED HENCEFORTH IN SC/HCS/TRIBUNAL AND IT SHALL AL SO APPLY RETROSPECTIVELY TO PENDING SLPS/APPEALS/CROSS OBJECTIONS/REFERENCES. P ENDING APPEALS BELOW THE SPECIFIED TAX LIMITS IN PARA 3 ABOVE MAY BE WITHDRA WN/NOT PRESSED. 4. IN THE PRESENT CASE, THE TAX EFFECT IN THIS AP PEAL BY THE REVENUE IS LESS THAN RS.20,00,000/-. THOUGH THIS APPEAL HAD BEEN FILED BY THE REVENUE ON 12.08.2016 AND WAS WITHIN THE MONETARY LIMIT IN THE FORM OF TA X EFFECT FOR FILING APPEALS BEFORE TRIBUNAL, IN VIEW OF PARA-13 OF THE CIRCULAR OF CBDT, EVEN SUCH APPEALS WILL BE GOVERNED BY THE NEW MONETARY LIMITS LAID DO WN IN THE CBDT CIRCULAR NO.3/2018 REFERRED TO ABOVE. 5. IT IS A SETTLED LAW THAT THE CIRCULARS ISSUED BY CBDT ARE BINDING ON THE REVENUE. THIS POSITION WAS CONFIRMED BY THE APEX CO URT IN THE CASE OF COMMISSIONER OF CUSTOMS VS INDIAN OIL CORPORATION L TD. REPORTED IN 267 ITR 272 WHEREIN THEIR LORDSHIPS EXAMINED THE EARLIER DE CISIONS OF THE APEX COURT WITH REGARD TO BINDING NATURE OF THE CIRCULAR AND L AID DOWN THAT WHEN A CIRCULAR ISSUED BY THE BOARD REMAINS IN OPERATION THEN THE R EVENUE IS BOUND BY IT AND CANNOT BE ALLOWED TO PLEAD THAT IT IS NOT VALID OR THAT IT IS CONTRARY TO THE TERMS OF THE STATUTE. THE APPEAL UNDER CONSIDERATION HAS CER TAINLY BEEN FILED CONTRARY TO THE CIRCULAR ISSUED BY THE CBDT CIRCULAR NO.3 DATED 11. 07.2018. 5.1. IN THE EVENT, THE REVENUE FINDS AT A LATER POI NT OF TIME THAT THE TAX EFFECT IN THE APPEAL IS MORE THAN RS.20 LAKHS OR DESPITE LOW TAX EFFECT THE APPEAL OF THE REVENUE IS MAINTAINABLE, THE REVENUE IS AT LIBERTY TO MOVE THIS TRIBUNAL FOR RECALLING OF THIS ORDER. 4 ITA NO.1627/KOL/2016 M/S M.L. DALMIA & CO. LTD. A.YR.2009-10 4 6. IN VIEW OF THE ABOVE, WE HOLD THAT THE APPEAL FI LED BY THE DEPARTMENT, AGAINST THE IMPUGNED ORDER OF THE LD. CIT(A), IS CO NTRARY TO THE POLICY DECISION OF THE DEPARTMENT AND AS SUCH THE APPEAL FILED BY T HE DEPARTMENT IS DISMISSED IN LIMINE . 7. IN THE RESULT, THE APPEAL BY THE REVENUE IS DI SMISSED. ORDER PRONOUNCED IN THE COURT ON 01.08.2018 SD/- SD/- [A.T. VARKEY] [ M.BALAGANESH ] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 01.08.2018 SB, SR. PS COPY OF THE ORDER FORWARDED TO: 1. DCIT, CIRCLE-7(1), KOLKATA, AAYAKAR BHAWAN DAKSH IN, P-7, CHOWRINGHEE SQUARE, KOLKATA-700069. 2. M/S M. L. DALMIA & CO., 32, SHAKESPEARE SARANI, KOLKATA-700017. 3. C.I.T(A)- 4. C.I.T.- KOLKATA. 5. CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY BY ORDER SENIOR PRIVAT E SECRETARY HEAD OF OFFICE/D.D.O., ITAT, KOLKATA BENCHE S