ACIT, Circle - 5, Kolkata, Kolkata V. M/s. Balmer Lawrie & Co. Ltd., Kolkata

ITA 1792/KOL/2008

• Counselvise Citation: [2018] 118 COUNSELVISE.COM (IT) 8735 (ITAT-KOLKATA)
• Duration Of Justice: 10 year(s) 3 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-12-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 23-08-2016
• Assessment Year: 2005-2006
• Appeal Filed On: 16-09-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SAURABH KUMAR
• Assessee Lawyers: D S DAMLE
• Keywords: Tax effect

Judgement Text

1 ITA NOS. 1792-1793/KOL/2008 BALMER LAWRIE & CO. LTD.., AYS 2005-06 & 2006-07 , C , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH: KOL KATA ( ) . . , . ' # $% % , '( ) [BEFORE SHRI A. T. VARKEY, JM & DR. A. L. SAINI, A M] I.T.A. NOS. 1792 & 1793/KOL/2008 ASSESSMENT YEARS: 2005-06 & 2006-07 ASSISTANT COMMISSIONER OF INCOME-TAX, CIRCLE-5, KOLKATA. VS. M/S. BALMER LAWRIE & CO. LTD. (PAN: AABCB0984E) APPELLANT RESPONDENT DATE OF HEARING 17.12.2018 DATE OF PRONOUNCEMENT 17.12.2018 FOR THE APPELLANT SHRI SAURABH KUMAR, ADDL. CIT, DR FOR THE RESPONDENT SHRI D. S. DAMLE, FCA ORDER PER SHRI A.T.VARKEY, JM BOTH THESE APPEALS PREFERRED BY THE REVENUE ARE AGA INST THE SEPARATE ORDERS OF THE LD. CIT(A)-V, KOLKATA DATED 11.07.2018 FOR AYS 2005-06 AND 2006-07. 2. AT THE OUTSET ITSELF, THE LD. COUNSEL FOR THE AS SESSEE HAS BROUGHT TO OUR ATTENTION TO THE FACT THAT THE REVENUE HAS PREFERRED BOTH THESE APPEALS WHICH HAVE TAX EFFECT OF LESS THAN RS. 20 LACS, THEREFORE, THE REVENUES APPEALS ARE N OT MAINTAINABLE IN THE LIGHT OF THE CBDT CIRCULAR NO.3/2018 DATED 11.07.2018 WHEREIN CBDT HA S DIRECTED AS UNDER: 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. FILIN G OF APPEAL IN SUCH CASES IS TO BE DECIDED ON MERITS OF THE CASE. 2 ITA NOS. 1792-1793/KOL/2008 BALMER LAWRIE & CO. LTD.., AYS 2005-06 & 2006-07 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 CHARGEABL E HAD SUCH TOTAL INCOME BEEN REDUCED BY THE AMOUNT OF INCOME IN RESPECT OF THE I SSUES AGAINST WHICH APPEAL IS INTENDED TO BE FILED (HEREINAFTER REFERRED TO AS 'D ISPUTED ISSUES). FURTHER, 'TAX EFFECT' SHALL BE TAX INCLUDING APPLICABLE SURCHARGE AND CES S. HOWEVER, THE TAX WILL NOT INCLUDE ANY INTEREST THEREON, EXCEPT WHERE CHARGEABILITY OF INTEREST ITSELF IS IN DISPUTE. IN CASE THE CHARGEABILITY OF INTEREST IS THE ISSUE UNDER DISPUT E, THE AMOUNT OF INTEREST SHALL BE THE TAX EFFECT. IN CASES WHERE RETURNED LOSS IS REDUCED OR ASSESSED AS INCOME, THE TAX EFFECT WOULD INCLUDE NOTIONAL TAX ON DISPUTED ADDITIONS. I N CASE OF PENALTY ORDERS, THE TAX EFFECT WILL MEAN QUANTUM OF PENALTY DELETED OR REDUCED 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 RELEVANT PA RA-13 OF THE CIRCULAR READS THUS: 13. THIS CIRCULAR WILL APPLY TO SLPS/APPEALS/CROSS OBJECTIONS/REFERENCES TO BE FILED HENCEFORTH IN SC/HCS/TRIBUNAL AND IT SHALL ALSO APP LY RETROSPECTIVELY TO PENDING SLPS/APPEALS/CROSS OBJECTIONS/REFERENCES. PENDING A PPEALS BELOW THE SPECIFIED TAX LIMITS IN PARA 3 ABOVE MAY BE WITHDRAWN/NOT PRESSED. 4. IN THE PRESENT CASE, THE TAX EFFECT IN THESE A PPEALS BY THE REVENUE ARE LESS THAN RS.20,00,000/-. THOUGH THESE APPEALS HAD BEEN FIL ED BY THE REVENUE ON 16.09.2008 AND WERE WITHIN THE MONETARY LIMIT IN THE FORM OF TAX E FFECT FOR FILING APPEAL BEFORE TRIBUNAL, IN VIEW OF PARA-13 OF THE CIRCULAR OF CBDT, EVEN SUCH APPEAL WILL BE GOVERNED BY THE NEW MONETARY LIMITS LAID DOWN 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 COURT IN T HE CASE OF COMMISSIONER OF CUSTOMS VS INDIAN OIL CORPORATION LTD. REPORTED IN 267 ITR 272 WHEREIN THEIR LORDSHIPS EXAMINED THE EARLIER DECISIONS OF THE APEX COURT WITH REGARD TO BINDING NATURE OF THE CIRCULAR AND LAID DOWN THAT WHEN A CIRCULAR ISSUED BY THE BOARD REMAI NS IN OPERATION THEN THE REVENUE 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. 6. IN THE EVENT, THE REVENUE FINDS AT A LATER POINT 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 FO R RECALLING OF THIS ORDER. 3 ITA NOS. 1792-1793/KOL/2008 BALMER LAWRIE & CO. LTD.., AYS 2005-06 & 2006-07 7. IN VIEW OF THE ABOVE, WE HOLD THAT THE APPEALS F ILED BY THE DEPARTMENT, AGAINST THE IMPUGNED ORDERS OF THE LD. CIT(A), ARE CONTRARY TO THE POLICY DECISION OF THE DEPARTMENT AND AS SUCH THE APPEALS FILED BY THE DEPARTMENT ARE DISMISSED IN LIMINE . 9. IN THE RESULT, BOTH THE APPEALS BY THE REVENUE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (DR. A. L. SAINI) (A. T. VARKEY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 17 TH DECEMBER, 2018 JD.(SR.P.S.) COPY OF THE ORDER FORWARDED TO: 1 APPELLANT ACIT, CIRCLE-5, KOLKATA. 2 RESPONDENT M/S. BALMER LAWRIE & CO. LTD., 21, N. S. ROAD, KOLKATA-700 001. 3 4 5 CIT(A) -V, KOLKATA (SENT THROUGH E-MAIL) CIT , KOLKATA. DR, KOLKATA BENCHES, KOLKATA (SENT THROUGH E-MAIL) / TRUE COPY, BY ORDER, ASSISTANT REGISTRAR