BADRI NARAYAN DUTTA, Jamshedpur V. ITO WARD-1(3), Jamshedpur

ITA 182/RAN/2016

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 8834 (ITAT-RANCHI)
• Duration Of Justice: 1 year(s) 8 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-02-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 07-06-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: RAJIV MITTAL LD
• Keywords: Audit objection; Tax effect

Judgement Text

1 ITA NOS.178 & 182/RAN/2016 IN THE INCOME TAX APPELLATE TRIBUNAL, RANCHI BENCH, RANCHI BEFORE: SHRI J. SUDHAKAR REDDY, ACCOUNTANT MEMBER AND SHRI S.S. VISWANETHRA RAVI, JUDICIA L MEMBER I.T.A NO. 178/RAN/2016 A.Y 2009-10 INCOME TAX OFFICER WARD 1(3), JAMSHEDPUR APPELLANT VS. SHRI BADRI NARAYAN DUTTA PAN: ACMPD061 1N RESPONDENT I.T.A NO. 182/RAN/2016 A.Y 2009-10 SHRI BADRI NARAYAN DUTTA PAN: ACMPD061 1N APPELLANT VS. INCOME TAX OFFICER WARD 1(3), JAMSHEDPUR RESPONDENT FOR THE APPELLANT : S/SHRI P.K. MONDAL, JCIT, LD. DR SANJAY PRASAD, CIT-A, LD.DR FOR THE RESPONDENT : SHRI RAJIV MITTAL, ADVOCATE, LD.AR DATE OF HEARING : 22-02-2018 DATE OF PRONOUNCEMENT : 28-02-2018 ORDER PER BENCH: BOTH THE ABOVE APPEALS BY REVENUE AND ASSESSEE ARE ARISING OUT OF SEPARATE ORDER DATED 28-03-2016 OF CIT(A), J AMSHEDPUR FOR THE ASSESSMENT YEAR 2009-10. 2. FIRST, WE SHALL TAKE UP THE APPEAL IN ITA NO. 17 8/RAN/2016 FOR THE A.Y 2009-10 BY THE REVENUE. 2 ITA NOS.178 & 182/RAN/2016 ITA NO. 178/RAN/2016 FOR THE A.Y 2009-10 3. ON PERUSAL OF RECORD, IT IS NOTICED THAT THE IS SUE INVOLVED IN THIS APPEAL OF REVENUE IS NOT MAINTAINABLE IN VIEW OF CB DTS PRESCRIBED CIRCULAR. THE LD. AR SUBMITTED THAT THE ISSUE INVOL VED IN THIS APPEAL IS RELATING TO BELOW TAX EFFECT, WHICH IS NOT MAINTAIN ABLE IN THE EYE OF LAW AND AS PER CBDTS CIRCULAR. ON THE OTHER HAND, THE LD.DR DID NOT CONTROVERT THE SAME. 4. IT IS SEEN FROM THE ABOVE THAT THE TOTAL TAX EFF ECT CHALLENGED BY THE REVENUE BEFORE US IS ADMITTEDLY BELOW THE TAX E FFECT LIMIT PRESCRIBED BY CBDT VIDE CIRCULAR NO. 21 / 2015 DATE D 10.12.2015 FOR PREFERRING APPEAL(S) BEFORE TRIBUNAL BY THE REVENU E. IT WILL BE PERTINENT TO REPRODUCE THE RELEVANT PORTION OF THE SAID CIRCULAR NO. 21 / 2015 DATED 10.12.2015 :- 3. HENCEFORTH, APPEALS / SLPS 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 10,00,000/- 2 BEFORE HIGH COURT 20,00,000/- 3 BEFORE SUPREME COURT 25,00,000/- IT IS CLARIFIED THAT AN APPEAL SHOULD NOT BE FILED MERELY BECAUSE THE TAX EFFECT IN A CASE EXCEEDS THE MONETARY LIMITS PRESCRIBED ABOVE. FILI NG 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 RESPECT OF THE ISSUES AGAINST WHICH APPEAL IS INTENDED TO BE FILED (HEREINAFTER REFERRED TO AS D ISPUTED ISSUES). HOWEVER, THE TAX WILL NOT INCLUDE ANY INTEREST THEREON, EXCEPT WHERE CHAR GEABILITY OF INTEREST ITSELF IS IN DISPUTE. IN CASE THE CHARGEABILITY OF INTEREST IS THE ISSUE UNDER DISPUTE, THE AMOUNT OF INTEREST SHALL BE THE TAX EFFECT. IN CASES WHERE R ETURNED LOSS IS REDUCED OR ASSESSED AS INCOME, THE TAX EFFECT WOULD INCLUDE NOTIONAL TAX O N DISPUTED ADDITIONS. IN CASE OF PENALTY ORDERS, THE TAX EFFECT WILL MEAN QUANTUM O F PENALTY DELETED OR REDUCED IN THE ORDER TO BE APPEALED AGAINST. 5. THE ASSESSING OFFICER SHALL CALCULATE THE TAX EF FECT SEPARATELY FOR EVERY ASSESSMENT YEAR IN RESPECT OF THE DISPUTED ISSUES IN THE CASE OF EVERY ASSESSEE. IF, IN THE CASE OF AN ASSESSEE, THE DISPUTED ISSUES ARISE IN MORE THAN ON E ASSESSMENT YEAR, APPEAL, CAN BE FILED IN RESPECT OF SUCH ASSESSMENT YEAR OR YEARS I N WHICH THE TAX EFFECT IN RESPECT OF THE DISPUTED ISSUES EXCEEDS THE MONETARY LIMIT SPECIFIE D IN PARA 3. NO APPEAL SHALL BE FILED IN RESPECT OF AN ASSESSMENT YEAR OR YEARS IN WHICH THE TAX EFFECT IS LESS THAN THE MONETARY LIMIT SPECIFIED IN PARA 3. IN OTHER WORDS , HENCEFORTH, APPEALS CAN BE FILED ONLY WITH REFERENCE TO THE TAX EFFECT IN THE RELEVANT AS SESSMENT YEAR. HOWEVER, IN CASE OF A COMPOSITE ORDER OF ANY HIGH COURT OR APPELLATE AUTH ORITY, WHICH INVOLVES MORE THAN ONE ASSESSMENT YEAR AND COMMON ISSUES IN MORE THAN ONE ASSESSMENT YEAR, APPEAL SHALL BE FILED IN RESPECT OF ALL SUCH ASSESSMENT YEARS EVEN IF THE TAX EFFECT IS LESS THAN THE PRESCRIBED MONETARY LIMITS IN ANY OF THE YEAR(S), I F IT IS DECIDED TO FILE APPEAL IN RESPECT OF THE YEAR(S) IN WHICH TAX EFFECT EXCEEDS THE MO NETARY LIMIT PRESCRIBED. IN CASE WHERE A COMPOSITE ORDER / JUDGEMENT INVOLVES MORE THAN ON E ASSESSEE, EACH ASSESSEE SHALL BE DEALT WITH SEPARATELY. 3 ITA NOS.178 & 182/RAN/2016 8. ADVERSE JUDGEMENTS RELATING TO THE FOLLOWING ISS UES SHOULD BE CONTESTED ON MERITS NOTWITHSTANDING THAT THE TAX EFFECT ENTAILED IS LES S THAN THE MONETARY LIMITS SPECIFIED IN PARA 3 ABOVE OR THERE IS NO TAX EFFECT: (A) WHERE THE CONSTITUTIONAL VALIDITY OF THE PROVISIONS OF AN ACT OR RULE ARE UNDER CHALLENGE, OR (B) WHERE BOARDS ORDER, NOTIFICATION, INSTRUCTION OR C IRCULAR HAS BEEN HELD TO BE ILLEGAL OR ULTRA VIRES, OR (C) WHERE REVENUE AUDIT OBJECTION IN THE CASE HAS BEEN ACCEPTED BY THE DEPARTMENT, OR (D) WHERE THE ADDITION RELATES TO UNDISCLOSED FOREIGN A SSETS / BANK ACCOUNTS. 10. THIS INSTRUCTION WILL APPLY RETROSPECTIVELY TO PENDING APPEALS AND APPEALS TO BE FILED HENCEFORTH IN HIGH COURTS/ TRIBUNALS. PENDING APPE ALS BELOW THE SPECIFIED TAX LIMITS IN PARA 3 ABOVE MAY BE WITHDRAWN / NOT PRESSED. APPEA LS BEFORE THE SUPREME COURT WILL BE GOVERNED BY THE INSTRUCTIONS ON THIS SUBJECT, OP ERATIVE AT THE TIME WHEN SUCH APPEAL WAS FILED. 5. IN VIEW OF THE ABOVE CIRCULAR, WE FIND THAT THE ISSUE CHALLENGED BY THE REVENUE IN THIS APPEAL IS BELOW THE TAX EFFE CT, WHICH IS PRESCRIBED BY THE BOARD UNDER CIRCULAR DT. 10-12-20 15. THEREFORE, THE APPEAL IS DISMISSED BEING LOW TAX EFFECT. 6. IN THE RESULT, THE APPEAL OF THE REVENUE IN ITA NO. 178/RAN/2016 FOR THE A.Y 2009-10 IS DISMISSED AS N OT MAINTAINABLE. 7. NOW, WE SHALL TAKE UP THE ASSESSEES APPEAL IN I TA NO.182/RAN/2016 FOR THE A.Y 2009-10. ITA NO.182/RAN/2016 FOR THE A.Y 2009-10 BY THE AS SESSEE . 8. AT THE TIME OF HEARING BEFORE US THE LD.AR SUBMI TS THAT ANOTHER OPPORTUNITY MAY BE GIVEN TO ASSESSEE TO REPRESENT I TS CASE PROPERLY BEFORE THE CIT-A. HE REFERRED TO PAGE 8 OF THE PAPE R BOOK AND ARGUED THAT THE ASSESSEE COULD NOT PROSECUTE HIS CASE PROP ERLY BEFORE THE CIT-A AS EARLIER AR WITHDREW ITS AUTHORIZATION FROM THE FIRST APPELLATE PROCEEDINGS. ON CHANGE OF JURISDICTION, THE CIT-A S ENT THE NOTICES TO EARLIER AR OF THE ASSESSEE, WHO WITHDREW HIS AUTHOR ISATION AND IN VIEW OF THIS, THERE WAS NO PROPER OPPORTUNITY OF TH E ASSESSEE TO REPRESENT ITS CASE BEFORE THE CIT-A. ON THE OTHER H AND, THE LD. DR HAS OBJECTED TO THE SAME. 4 ITA NOS.178 & 182/RAN/2016 9. HEARD RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. IT IS NOTICED FROM THE CERTIFIED COPIES OF THE ORDER S HEET OF THE CIT-A, PLACED AT PAGE 8 OF THE PAPER BOOK THAT THEN AR BY NAME SHRI NAWAL MEHETA,FCA HAS WITHDRAWN HIS AUTHORIZATION FROM THE PROCEEDINGS AND ON 10-03-2015, SHRI A.R MITRA, FCA FILED POWER OF ATTORNEY ON BEHALF OF THE ASSESSEE TO PROSECUTE HIS CASE. IT IS ALSO NOTICED FROM RECORD THAT AFTER CHANGE OF JURISDICTION, THE CIT-A SENT NOTICES TO THE EARLIER AR OF THE ASSESSEE, WHO WITHDRAWN HIS POWER OF ATTORNEY FROM THE PROCEEDINGS, WHICH IS AVAILABLE AT PAGE 12 OF T HE PAPER BOOK. WE ARE OF THE VIEW THAT THERE WAS NO OPPORTUNITY TO TH E ASSESSEE BEFORE THE CIT-A. THEREFORE, TAKING INTO CONSIDERATION THE SUBMISSIONS OF THE LD.AR, FACTS AND CIRCUMSTANCES OF THE CASE AND IN T HE INTEREST OF JUSTICE, WE DEEM IT FIT AND PROPER TO REMAND THE MA TTER TO THE FILE OF THE CIT-A FOR FRESH ADJUDICATION. THE ASSESSEE SHA LL BE AT LIBERTY TO FILE REQUISITE EVIDENCES AND EXPLANATION IN SUPPORT OF ITS CLAIM RAISED IN THE APPEAL BEFORE THE CIT-A. THEREFORE, THE GROU NDS RAISED BY THE ASSESSEE IN THE APPEAL ARE ALLOWED FOR STATISTICAL PURPOSE. 10. THE APPEAL OF ASSESSEE IN ITA NO. 182/RAN/2016 OR THE A.Y 2009-10 IS ALLOWED FOR STATISTICAL PURPOSE. 11. IN THE RESULT, THE APPEAL OF THE REVENUE IN ITA NO. 178/RAN/2016 FOR THE A.Y 2009-10 IS DISMISSED AND T HE APPEAL OF ASSESSEE IN ITA NO. 182/RAN/2016 OR THE A.Y 2009-10 IS ALLOWED FOR STATISTICAL PURPOSE. SD/- SD/- J. SUDHAKAR REDDY S.S. VISWANETHRA RAVI ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 28-02-2018 5 ITA NOS.178 & 182/RAN/2016 PP(SR.P.S.) COPY OF THE ORDER FORWARDED TO: 1 . APPELLANT THE ITO, WARD 1(3), 47 C.H AREA, JAMSHE DPUR-831001. 2 RESPONDENT SHRI BADRI NARAYAN DUTTA, FLAT NO. D/2, CHANDRA KUNJ, 27 NEW BARADWARI, SASKCHI, JAMSHEDPUR-831001. 3 . THE CIT(A), RANCHI 4. 5. CIT , RANCHI DR, ITAT RANCHI BENCHES, RANCHI. / TRUE COPY, BY ORDER, SR.PS ITAT, RANCHI