ITO (Central), Nashik V. Smt. Jasbirkaur Narendrasingh Bindra, Nashik

ITA 1677/PUN/2013

• Counselvise Citation: 167724514 RSA 2013
• Duration Of Justice: 1 year(s) 3 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-12-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 15-12-2014
• Assessment Year: 2007-2008
• Appeal Filed On: 03-09-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B C MALAKAR
• Keywords: Question of law; Tax effect
• Section: 260A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE MS. SUSHMA CHOWLA, JUDICIAL MEMBER AND SHRI R.K. PANDA, ACCOUNTANT MEMBER ITA NO.1677/PN/2013 (ASSESSMENT YEAR: 2007-08) THE INCOME TAX OFFICER (CENTRAL), NASHIK . APPELLANT VS. SMT. JASBIRKAUR NARENDRASINGH BINDRA, AMRUT VILLA, NASHIK PUNE ROAD, NASHIK 422101 PAN: AEJPB4645M . RESPONDENT APPELLANT BY : SHRI B.C. MALAKAR RESPONDENT BY : NONE DATE OF HEARING : 15-12-2014 DATE OF PRONOUNCEMENT : 16-12-2014 ORDER PER SUSHMA CHOWLA, JM: THIS APPEAL FILED BY THE REVENUE IS AGAINST THE ORDER OF CIT(A)-I, NASHIK, DATED 17.06.2013 RELATING TO ASSESSMENT YEAR 200 7-08 AGAINST PENALTY LEVIED UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT. 2. DESPITE THE SERVICE OF NOTICE, NONE APPEARED ON BEHALF O F THE ASSESSEE. HOWEVER, WE PROCEED TO DECIDE THE PRESENT APPEAL SINCE THE TAX EFFECT IN THE APPEAL IS BELOW RS.4 LAKHS. 3. ON THE PERUSAL OF THE RECORD, WE FIND THAT THE PRESEN T APPEAL IS FILED BY THE REVENUE AND THE TOTAL TAX EFFECT IN THE PRESE NT APPEAL IS BELOW RS.4 LAKHS. THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE ITA NO.1677/PN/2013 SMT. JASBIRKAUR NARENDRASINGH BINDRA 2 REVENUE FAIRLY ADMITTED THAT THE TAX EFFECT IN THE PRESEN T APPEAL WAS LESS THAN RS.4 LAKHS. 4. WE FIND THAT THE ISSUE IN THE PRESENT APPEAL IS SQUAREL Y COVERED BY THE RATIO LAID DOWN BY THE HONBLE BOMBAY HIGH COURT IN T HE CASE OF CIT VS. SMT. VIJAYA V. KAVEKAR REPORTED IN (2013) 350 ITR 237 (BOM) THAT THE PROPOSITION REGARDING THE CIRCULARS ISSUED BY THE CBDT AR E NOT ONLY APPLICABLE TO THE NEW CASES BUT WOULD ALSO APPLICABLE TO TH E PENDING APPEALS. 5. UNDER THE PROVISIONS OF SECTION 268(1) OF THE ACT, THE CB DT IS EMPOWERED TO ISSUE INSTRUCTIONS FIXING THE MONETARY LIMITS FOR THE REVENUE TO FILE APPEALS BEFORE THE TRIBUNAL, ALL THE HIGH COUR TS AND THE SUPREME COURT. THE CBDT FROM TIME TO TIME, ISSUES INSTRU CTIONS FIXING THE MONETARY LIMITS WITH THE OBJECT OF NOT BURDENING THE COURTS AND THE TRIBUNAL WITH MATTERS WHERE THE TAX EFFECT WAS ON A LOWE R SIDE. THE CBDT VIDE INSTRUCTION NO.5 OF 2014 ISSUED ON 10.07.2014 HA D REVISED THE EARLIER INSTRUCTION NO.3 OF 2011, DATED 09.02.2011 WH EREIN, THE MONETARY LIMITS AND OTHER CONDITIONS FOR FILING THE DEPARTMEN TAL APPEALS IN INCOME TAX MATTERS BEFORE THE APPELLATE TRIBUNALS, HIGH COURTS AND SUPREME COURT WERE SPECIFIED. THE INSTRUCTIONS ISSUED ON 10.07.2014 WERE IN SUPERSESSION OF THE EARLIER INSTRUCTIONS AND THE MONETARY LIMITS HAVE BEEN ENHANCED BY THE PRESENT INSTRUCTION AND IT HAS BEEN PROVIDED THAT THE APPEALS SHALL NOT BE FILED IN CASES WHERE THE TAX EFFECT DOES NOT EXCEED THE MONETARY LIMITS GIVEN HEREUNDER:- S NO APPEALS IN INCOME-TAX MATTERS MONETARY LIMIT (IN RS) 1. BEFORE APPELLATE TRIBUNAL 4,00,000/- 2. U/S 260A BEFORE HIGH COURT 10,00,000/- 3. BEFORE SUPREME COURT 25,00,000/- ITA NO.1677/PN/2013 SMT. JASBIRKAUR NARENDRASINGH BINDRA 3 6. THE REVISED MONETARY LIMIT FOR FILING THE APPEALS BEFORE THE APPELLATE TRIBUNAL WAS FIXED AT IN EXCESS OF RS.4 LACS. FURTHE R, UNDER THE SAID INSTRUCTION, IT WAS ALSO DIRECTED THAT THE ASSESSING OFFICER SHALL CALCULATE THE TAX EFFECT SEPARATELY FOR EVERY ASSESSMENT YEAR IN RESPECT OF THE DISPUTED ISSUES. IN CASE OF EVERY ASSESSEE WHERE, T HE DISPUTED ISSUE ARISES IN MORE THAN ONE ASSESSMENT YEAR, IT WAS DIRECTED THAT APPEAL COULD BE FILED IN RESPECT OF SUCH ASSESSMENT YEAR OR YEAR S IN WHICH, THE TAX EFFECT IN RESPECT OF THE DISPUTED ISSUE EXCEEDED THE MONETARY LIMIT FIXED. IN OTHER WORDS AND HENCEFORTH, THE APPEALS CAN B E FILED ONLY WITH REFERENCE TO THE TAX EFFECT IN THE RELEVANT ASSESSMENT Y EAR. IN CASE OF COMPOSITE ORDER OF ANY HIGH COURT OR APPELLATE AUTHORITY, IT WAS FURTHER CLARIFIED THAT IF THE APPEAL IS TO BE FILED IN RESPECT OF THE Y EAR/S IN WHICH, TAX EFFECT EXCEEDS THE MONETARY LIMIT PRESCRIBED THEN, SUC H APPEALS COULD ALSO BE FILED IN RESPECT OF ALL SUCH ASSESSMENT YEARS EVEN IF THE TAX EFFECT IS LESS THAN PRESCRIBED MONETARY LIMITS. 7. IN THE FACTS OF THE PRESENT CASE, THE REVENUE HAD FILED THE APPEAL ON 03.09.2013. ADMITTEDLY, IN THE YEAR UNDER APPEAL, THE T AX EFFECT IS LESS THAN RS.4 LACS AS PRESCRIBED IN INSTRUCTION NO.5 OF 2 014 ISSUED BY THE CBDT. AT THE TIME OF HEARING OF THE APPEAL, THE MONET ARY LIMITS PRESCRIBED BY THE CBDT STAND REVISED BY THE SAID INSTR UCTION NO.5 OF 2014, DATED 10.07.2014 UNDER WHICH, IT HAS BEEN PROVIDED T HAT WHERE THE TAX EFFECT DOES NOT EXCEED RS.4 LACS IN ANY OF THE A SSESSMENT YEAR THEN, NO APPEAL CAN BE FILED BEFORE THE APPELLATE TRIBUNAL. THE ISSUE ARISING BEFORE US IS WHETHER THE SAID REVISED INSTRUCTIONS WHICH WERE ISSUED SUBSEQUENT TO THE FILING OF THE APPEAL BY THE REVEN UE COULD BE APPLIED TO THE PENDING APPEAL OR APPLICABLE ONLY TO THE NE W CASES TO BE FILED BY THE REVENUE AFTER THE DATE OF ISSUE OF THE INSTRUCTIONS. ITA NO.1677/PN/2013 SMT. JASBIRKAUR NARENDRASINGH BINDRA 4 8. WE FIND THAT THE SAID ISSUE HAS BEEN CONSIDERED BY THE HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. SMT. VIJAYA V. KAVEKAR (SUPRA). THE HONBLE HIGH COURT IN THE CASE OF CIT VS. SM T. VIJAYA V. KAVEKAR (SUPRA), HAD IN TURN FOLLOWED THE RATIO LAID DOWN BY ANOTHER DIVISION OF BOMBAY HIGH COURT IN THE CASE OF CIT VS. POLYCO TT CORPORATION REPORTED IN (2009) 318 ITR 144 (BOM) WHEREIN, IT WAS HELD AS UNDER:- 8. IN CASE OF 'COMMISSIONER OF INCOME TAX V/S POLYC OTT CORPORATION' REPORTED AT '(2009) 318 ITR 144 (BOM), A A NOTHER DIVISION BENCH OF THIS COURT CONSTRUED THE SAME INST RUCTION NO. 2 OF 2005, DATED 24TH OCTOBER, 2005. THE DIVISION BENCH OBSE RVED WHILE CONSTRUING THE PARAGRAPH NO. 5 OF THE CIRCULAR, AS THUS : '9. HAVING CONSIDERED THE CONTENTIONS, IN OUR OPINIO N, THE INSTRUCTIONS CANNOT BE INTERPRETED AS A STATUTE THO UGH IT IS PURSUANT TO THE POWER CONFERRED UNDER SECTION 268A OF THE IT ACT. WHAT THE COURT HAS TO CONSIDER IS THE PLAIN LAN GUAGE OF THE PARA AND THE OBJECT BEHIND THE SAID PROVISIONS. THE OBJECT APPEARS TO BE NOT TO BURDEN COURTS AND TRIBUNALS IN RESPECT OF MATTERS WHERE THE TAX EFFECT IS LESS THAN THE LIMIT PR ESCRIBED. EVEN BEFORE THIS INSTRUCTION, CBDT HAS BEEN ISSUING INSTRUCTIONS, THE LAST ONE BEING ON 24TH OCT., 2005 WH ERE THE MONETARY LIMIT HAS BEEN FIXED. IN THOSE INSTRUCTIONS T HE ONLY EXCEPTION HAD BEEN THAT IN CASES INVOLVING, SUBSTANTIAL QUESTION OF LAW OF IMPORTANCE AS WELL AS IN CASES WHER E THE SAME QUESTION OF LAW WILL REPEATEDLY ARISE, EITHER IN T HE CASE CONCERNED OR IN SIMILAR CASE, APPEAL SHOULD BE FILED WITH OUT BEING HINDERED BY THE MONETARY LIMITS. THE PRESENT INSTRUCTIONS SEEM EVEN TO LIMIT THE ISSUES INSOFAR AS THE SAME QUESTION OF LAW OR RECURRING ISSUE EXCEPT TO THE EXTENT P ROVIDED IN PARA 5. ON A PROPER READING OF PARA 5 OF THE INSTRUCTIONS IT WOULD BE CLEAR THAT A DUTY IS CAST ON THE AO THAT EVEN IF THE DISPUTED QUESTIONS ARISE FOR MORE THAN ONE ASSESSMENT YEAR T HEN AN APPEAL SHOULD BE FILED ONLY IN RESPECT OF THOSE YEARS W HERE THE MONETARY LIMIT AS SPECIFIED IN PARA 3 OF THE INST RUCTION. THE EXCEPTION, HOWEVER, IS CARVED OUT IN RESPECT OF A COMPOSITE ORDER OF THE HIGH COURT OR APPELLATE AUTHOR ITY. IN OTHER WORDS WHERE THE HIGH COURT OR TRIBUNAL HAS PAS SED A COMPOSITE ORDER IN RESPECT OF THE SAME ASSESSEE ON T HE SAME QUESTION AND/OR ON DIFFERENT QUESTION AND FOR ONE O F THE ASSESSMENT YEARS, THE TAX EFFECT IS MORE THAN THE MO NETARY LIMIT THEN THE APPEAL SHALL ALSO BE FILED IN RESPECT OF ALL THE ITA NO.1677/PN/2013 SMT. JASBIRKAUR NARENDRASINGH BINDRA 5 ASSESSMENT YEARS. THE SUBMISSION ON BEHALF OF THE AS SESSEE IS THAT THE COMPOSITE ORDER MUST RELATE TO A COMMON ISSUE. WE BEG TO DISAGREE ON A PLAIN AND LITERAL CONSTRUCTION OF THE INSTRUCTION. THE EXPRESSION 'WHICH INVOLVES MORE THA N ONE YEAR' WOULD HAVE NO MEANING IF IT WAS RESTRICTED ONL Y TO THE EXPRESSION 'COMMON ISSUES'. THE EXPRESSION, THEREFORE , OF A COMPOSITE ORDER WILL HAVE TO BE READ TO MEAN AN ORDE R IN RESPECT OF THE SAME ASSESSEE FOR MORE THAN ONE YEAR . AN (ORDER) DISPOSING OF SEVERAL APPEALS ON A COMMON QUEST ION OF LAW BY APPELLATE AUTHORITY, CANNOT BE SAID TO BE A COM POSITE ORDER AS THE ORDER INVOLVES APPEALS BY DIFFERENT PERS ONS, WHICH APPEALS FOR THE SAKE OF CONVENIENCE HAVE BEEN ONLY CLUBBED TOGETHER FOR THE PURPOSE OF DISPOSAL ON THAT ISSUE. IN OUR OPINION, THIS WOULD BE THE CORRECT READING OF PAR A 5 OF THE INSTRUCTION.' 9. THE HONBLE BOMBAY HIGH COURT FURTHER HELD AS UNDER:- 15. THE POSITION OF LAW, THEREFORE, EMERGING FROM TH E AFORESAID JUDGEMENTS, IS THAT THE CIRCULARS OR INSTRUCTIONS IS SUED UNDER SECTION 268A OF THE INCOME TAX ACT BY THE CENTRAL BOARD OF DIRECT TAX ES, ARE APPLICABLE NOT ONLY TO NEW CASES BUT TO PENDING CASE S AS WELL. SUCH CIRCULARS HAVE BEEN ISSUED UNDER SECTION 268A OF TH E INCOME TAX ACT, WHICH IS AN EXCEPTION TO THE PROVISIONS OF SECT ION 260 OF THE ACT. THE CBDT BEING MINDFUL OF THIS POSITION HAS ISSUED THE AFORESAID INSTRUCTIONS. IN OUR OPINION, THEREFORE, THE INSTRUC TIONS WOULD BE APPLICABLE TO PENDING CASES AS WELL. WE HAVE ALREADY FO UND THAT THE INSTRUCTION NO. 5 OF 2008 AND INSTRUCTION NO. 3 OF 2 011 ARE PARA- MATERIA. THE INSTRUCTION NO. 5 OF 2008 HAS ALREADY BEEN INTERPRETED BY THIS COURT IN CIT V/S MADHUKAR INAMDAR (SUPRA). IT IS NOT DISPUTED THAT THIS JUDGEMENT HAS NOT BEEN CHALLENGED BY THE REVENUE AND THEREFORE STILL HOLDS THE FIELD. 10. FOLLOWING THE ABOVE SAID PROPOSITION LAID DOWN BY THE HO NBLE HIGH COURT IN THE CASE OF CIT VS. SMT. VIJAYA V. KAVEKAR (SUPR A), WE HOLD THAT IN VIEW OF THE REVISED INSTRUCTION ISSUED BY THE CBDT UN DER WHICH, THE MONETARY LIMIT FOR FILING THE APPEALS BEFORE THE APPELLATE AUTH ORITIES, TRIBUNALS HAS BEEN REVISED AND FIXED AT RS.4 LACS I.E. ONLY APPEALS WITH TAX EFFECT EXCEEDING RS.4 LACS WERE MAINTAINABLE. IN THE PR ESENT APPEAL FILED BY THE REVENUE, THE MONETARY LIMIT ADMITTEDLY, IS LESS T HAN RS.4 LACS. IN VIEW OF INSTRUCTION NO.5 OF 2014 WHICH ARE APPLICAB LE NOT ONLY TO THE NEW APPEALS TO BE FILED BY THE REVENUE, BUT ALSO TO T HE APPEALS ITA NO.1677/PN/2013 SMT. JASBIRKAUR NARENDRASINGH BINDRA 6 PENDING BEFORE THE TRIBUNAL, WE DISMISS THE APPEAL FILED BY TH E REVENUE BECAUSE OF SMALL TAX EFFECT. 11. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 16 TH DAY OF DECEMBER, 2014. SD/- SD/- (R.K. PANDA) (SUSHMA CHOWLA) ACCOUNTANT MEMBER JUDICIAL MEMBER PUNE, DATED: 16 TH DECEMBER, 2014. GCVSR COPY OF THE ORDER IS FORWARDED TO : - 1) THE DEPARTMENT; 2) THE ASSESSEE; 3) THE CIT(A)-I, NASHIK; 4) THE CIT-I, NASHIK; 5) THE DR B BENCH, I.T.A.T., PUNE; 6) GUARD FILE. BY ORDER //TRUE COPY// ASSISTANT REGISTRAR I.T.A.T., PUNE