DCIT, C-1, Ludhiana V. Vardhman Acrylics Ltd., Ludhiana

ITA 182/CHANDI/2018

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 6526 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-02-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 21-02-2019
• Assessment Year: 2014-2015
• Appeal Filed On: 15-02-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANJIT SINGH
• Assessee Lawyers: VINEET J AIN
• Keywords: Question of law; Tax effect; Condonation of delay; Rule 8D
• Section: 14A

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, B, CHANDIGARH , , BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER AND MS. ANNAPURNA GUPTA, ACCOUNTANT MEMBER ./ ITA NO. 1512/CHD/2017 ! ' / ASSESSMENT YEARS : 2014-15 M/S VARDHMAN ACRYLICS LIMITED, CHANDIGARH ROAD, LUDHIANA # THE DCIT, CIRCLE-1, LUDHIANA $ ./ PAN NO. AAACV7602E $% / APPELLANT &'$% / RESPONDENT & ./ ITA NO. 182/CHD/2018 ! ' / ASSESSMENT YEARS : 2014-15 THE DCIT, CIRCLE-1, LUDHIANA # M/S VARDHMAN ACRYLICS LIMITED, CHANDIGARH ROAD, LUDHIANA $ ./ PAN NO. AAACV7602E $% / APPELLANT &'$% / RESPONDENT ! ( ) * /ASSESSEE BY : SHRI VINEET JAIN, CA ) * / REVENUE BY : SHRI MANJIT SINGH, SR.DR + ) , /DATE OF HEARING : 21.02.2019 -./' ) , /DATE OF PRONOUNCEMENT : 21.02.2019 /ORDER PER SANJAY GARG, JUDICIAL MEMBER : THE PRESENT CROSS APPEALS PREFERRED BY THE ASSESSEE AND REVENUE ARE AGAINST THE ORDER DATED 22.8.2017 OF COMMISSIONER OF INCOME TAX (APPEALS)-I, LUDHIANA [HEREINAFTER REFERRED TO AS CIT(A)] ITA NO.182-C-2018 & 1512-C-17 M/S VARDHMAN ACRYLICS LIMITED LUDHIANA 2 2. FIRST, WE SHALL DEAL WITH THE APPEAL FILED BY TH E ASSESSEE IN ITA NO. 1512/CHD/2017. 3. THE SOLE DISPUTE INVOLVED IN THIS APPEAL IS RELA TING TO DISALLOWANCE OF EXPENDITURE U/S 14A OF THE INCOME- TAX ACT, 1961 (IN SHORT 'THE ACT') READ WITH RULE 8D(2(III)O F THE I.T.RULES. 4. THE LD. CIT(A) WHILE MAKING/CONFIRMING THE DISALLOWANCE HAS APPLIED THE AMENDED RULE EFFECTIVE FROM 2.6.2016. THE LD. COUNSEL FOR THE ASSESSEE HAS SUBM ITTED THAT THE ASSESSMENT YEAR UNDER CONSIDERATION IS ASS ESSMENT YEAR 2014-15 AND THAT THE AMENDED RULE IS TO BE APP LIED PROSPECTIVELY. HE, THEREFORE, HAS SUBMITTED THAT TH E MATTER NEEDS TO BE RESTORED TO THE FILE OF THE CIT(A) TO A PPLY THE RELEVANT RULES, AS WERE ENFORCEABLE FOR THE ASSESS MENT YEAR UNDER CONSIDERATION. THE LD. COUNSEL FOR THE ASSESS EE IN THIS RESPECT HAS RELIED UPON THE DECISION OF HON'BL E SUPREME COURT IN CIT VS. ESSAR TELEHOLDINGS LTD., [2018] 90 TAXMANN.COM 2 (SC) 5. WE FIND THAT NOW IT HAS BEEN HELD BY THE HON'BLE SUPREME COURT IN CIT VS. ESSAR TELEHOLDINGS LTD., (SUPRA) THAT AMENDED RULE 8D OF THE I.T. RULES IS APPLICABL E PROSPECTIVELY. IN VIEW OF THIS, THE MATTER IS RESTO RED TO THE FILE OF THE CIT(A) TO DECIDE THE ISSUE AFRESH IN A CCORDANCE WITH LAW IN THE LIGHT OF RELEVANT RULES AS MAY BE APPLICABLE IN THE ASSESSMENT YEAR UNDER CONSIDERATION. ITA NO.182-C-2018 & 1512-C-17 M/S VARDHMAN ACRYLICS LIMITED LUDHIANA 3 6. NOW COMING TO THE APPEAL OF THE REVENUE IN ITA N O. 182/CHD/2018 . THE APPEAL IS TIME BARRED FOR 100 DAYS. A SEPARATE APPLICATION FOR CONDONATION OF DELAY HAS B EEN FILED, WHEREIN, IT HAS BEEN PLEADED THAT ORDER GIVI NG EFFECT TO THE CIT(A) COULD NOT BE PASSED DUE TO NON-AVAILA BILITY OF CERTAIN RECORDS. THAT THE DELAY IN FILING THE PRESE NT APPEAL WAS NOT INTENTIONAL. CONSIDERING THE REASONS GIVEN IN THE APPLICATION, T HE DELAY IN FILING THE PRESENT APPEAL IS HEREBY CONDON ED. 7. AT THE OUTSET, THE LD. DR HAS FAIRLY AGREED THAT THE TAX EFFECT INVOLVED IN THE PRESENT CASE IS LESS THAN RS. 20 LACS AND THAT THE CBDT CIRCULAR NO. 3/2018 IS APPLICABLE TO THIS APPEAL, HENCE, THIS APPEAL OF THE REVENUE IS LIABLE TO BE DISMISSED. 8. IT MAY BE NOTED THAT CBDT VIDE CIRCULAR NO. 3/20 18 DATED 11.07.2018 HAS REVISED THE MONETARY LIMIT UPT O RS.20 LACS FOR FILING APPEALS BY THE DEPARTMENT BEFORE TH E TRIBUNAL AND FURTHER VIDE PARA 13 OF THE SAID CIRCULAR IT HA S BEEN CLARIFIED THAT SAID CIRCULAR IS APPLICABLE RETROSPE CTIVELY TO THE PENDING APPEALS ALSO. THE HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF PRINCIPAL CIT OF INCOME TAX V S. SURINDER KUMAR SINGHAL ITA NO 406-2016 (O&M) VIDE ORDER DAT ED 30.1.2017 WHILE FURTHER RELYING UPON THE DECISION O F THE HON'BLE SUPREME COURT IN THE CASE OF CIT VS. DHANA LEKSHMI BANK LTD. (2015) 373 ITR 526 (SC), HAS DISMISSED T HE APPEAL OF THE REVENUE WITHOUT GOING INTO THE MERITS DUE TO LOW TAX ITA NO.182-C-2018 & 1512-C-17 M/S VARDHMAN ACRYLICS LIMITED LUDHIANA 4 EFFECT LEAVING THE QUESTION OF LAW OPEN. IN VIEW O F THE CBDT CIRCULAR NO. 03/2018 (SUPRA) AND IN THE LIGHT OF TH E ABOVE REFERRED TO DECISION OF THE HON'BLE JURISDICTIONAL PUNJAB & HARYANA HIGH COURT (SUPRA), THE PRESENT APPEAL OF T HE REVENUE IS DISMISSED DUE TO LOW TAX EFFECT. 9. IT IS, HOWEVER, CLARIFIED THAT THE DISMISSAL OF THE ABOVE APPEAL SHALL NOT BE TAKEN TO BE AFFIRMATION O F THE ORDER OF THE CIT(A) ON MERITS. THE LEGAL ISSUE RAIS ED BY THE REVENUE IS BEING LEFT OPEN TO BE ADJUDICATED IN AN APPROPRIATE CASE. IN THE RESULT, APPEAL OF THE ASSESSEE IS TREATED AS ALLOWED, WHEREAS, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER DICTATED AND PRONOUNCED IN THE OPEN COURT IMMEDIATELY ON COMPLETION OF HEARING. SD/- SD/- ( / ANNAPURNA GUPTA) ! '#/ ACCOUNTANT MEMBER ( '%& / SANJAY GARG) ' '#/ JUDICIAL MEMBER DATED : 21 .02.2019 .. 1 ) & 23 43' / COPY OF THE ORDER FORWARDED TO : 1. $% / THE APPELLANT 2. &'$% / THE RESPONDENT 3. 5 / CIT 4. 5 ( )/ THE CIT(A) 5. 36 & 7! , , 7! , 89:; / DR, ITAT, CHANDIGARH 6. : < + / GUARD FILE 1 / BY ORDER, = / ASSISTANT REGISTRAR