Asstt.Commissioner of Income-tax ,Chandrapur Circle, Chandrapur V. M/s. Gajanan Construction Co., Chandrapur

ITA 19/NAG/2011

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 9644 (ITAT-NAGPUR)
• Duration Of Justice: 1 year(s) 8 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-10-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2007-2008
• Appeal Filed On: 01-02-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR MILIND BHUSARI; K JOHN VIKRAM
• Assessee Lawyers: R S BHATTAD
• Keywords: Question of law; Tax effect

Judgement Text

ITA NO. 19 /N AG/2011 GAJANAN CONSTRUCTION CO., CHANDRAPUR IN THE INCOME TAX APPELLATE TRIBUNAL NAGPUR BENCH , NAGPUR BEFORE: SHRI P.K. BANSAL , ACCOUNTANT MEMBER AND SHRI D.T. GARASIA , JUDICIAL MEMBER ITA NO. 1 9 / NAG /20 1 1 ASSESSMENT YEAR : 200 7 - 0 8 ACIT, CHANDRAPUR CIRCLE CHANDRAPUR VS. GAJANAN CONSTRUCTION CO. CHANDRAPUR (APPELLANT) (RESPONDENT) PAN NO. AABFG 7700Q APPELLANT BY: SHRI K. JOHN VIKRAM, JCIT & DR. MILIND BHUSARI, CIT(DR) RESPONDENT BY: SHRI R.S. BHATTAD, C.A. DATE OF HEARING: 18.10.12 DATE OF PRONOUNCEMENT: 19.10.12 OR DER PER BENCH: TH IS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE CIT(A) DATED 29.11.2010 ON VARIOUS GROUNDS. 2 . AT THE OUTSET OF HEARING, THE LEARNED REPRESENTATIVE FOR THE ASSESSEE RAISED A PRELIMINARY OBJECTION BY POINTING OUT INSTRUCT ION NO. 3/2011 DATED 09.02.2011 ISSUED BY THE CENTRAL BOARD OF DIRECT TAXES (CBDT) FIXING THE MONETARY LIMITS FOR FILING OF DEPARTMENTAL APPEALS BEFORE THE TRIBUNAL. IN TERMS OF THE SAID INSTRUCTION, MONETARY LIMIT FOR FILING DEPARTMENTAL APPEAL TO THE TRI BUNAL HAS BEEN FIXED AT RS 3 LAKHS. IN OTHER WORDS, IN CASES WHERE THE TAX EFFECT OF THE ADDITIONS DELETED BY THE COMMISSIONER OF INCOME - TAX (APPEALS) IS LESS THAN RS 3 LAKHS, NO APPEAL SHALL BE FILED BY THE DEPARTMENT IN SUCH CASES. ACCORDING TO THE LEARN ED REPRESENTATIVE, THE TAX EFFECT WITH RESPECT TO THE RELIEF ALLOWED BY THE COMMISSIONER OF INCOME - TAX (A PPEALS) IN THE CAPTIONED APPEAL IS BELOW RS 3 LAKHS. SUCH FACTUAL MATRIX HAS NOT BEEN CONTESTED BY THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVE NUE, THOUGH THE RELIEF ALLOWED BY THE COMMISSIONER OF INCOME - TAX (APPEALS) IS SOUGHT TO BE ASSAILED ON MERITS . ITA NO.19/NAG/2011 GAJANAN CONSTRUCTION CO., CHANDRAPUR 2 3 . WE FIND THAT IN A RECENT DECISION, THE CO - ORDINATE BENCH OF ITAT MUMBAI, IN THE CASE OF ITO V SHRI ASHOK G. DHANDHARIAI, MUMBAI IN ITA NO2460 /MUM/2010 DATED 28.2.2011 HELD THAT THE REVISED INSTRUCTIONS DATED 9.2.2011 (SUPRA) ARE APPLICABLE TO THE PRESENT CASES ALSO, ALTHOUGH SUCH APPEALS HAVE BEEN FILED ON A PRIOR DATE. 4 . IN VIEW OF THE PRECEDENT BROUGHT OUT BY THE LEARNED REPRESENTATIVE FOR T HE RESPONDENT, FA CTUALLY THE DEPARTMENTAL APPEAL IS LIABLE TO BE CONSIDERED TO HAVE BEEN FILED CONTRARY TO THE CBDT INSTRUCTIONS DATED 9.2.2011 (SUPRA). THE TRIBUNAL FOLLOWING THE JUDGMENT OF THE HON BLE BOMBAY HIGH COURT IN THE CASE OF CIT V MADHUKAR K. I NAMDAR (HUF) 318 ITR 149 AND CIT V PITHWA ENGINEERING WORKS 276 ITR 519 (BOM) FOUND IT APPROPRIATE TO DISMISS THE DEPARTMENTAL APPEAL ON THE GROUND THAT TAX EFFECT IS LESS THAN RS 3 LAKHS , EVEN IN A CASE WHERE THE DEPARTMENTAL APPEAL S WAS FILED PRIOR TO TH E DATE OF THE CBDT INSTRUCTION DATED 9.2.2011 (SUPRA) . THE FOLLOWING DISCUSSION IN THE ORDER IS WORTHY OF NOTICE: 5. WE HEARD BOTH THE PARTIES. THE CASE OF CIT VS. CHHAJER PACKAGING & PLASTICS PVT. LTD. 300 ITR RELIED ON BY THE DR IS DISTINGUISHABLE FROM THE FACTS OF THE PRESENT CASE. AT PARA 12 PAGE 184 OF THE DECISION IN THE CASE OF CHHAJER PACKAGING & PLASTICS PVT. LTD. IT HAS BEEN HELD AS FOLLOWS: OTHERWISE ALSO, PARAGRAPH OF THIS CIRCULAR ITSELF SAVES CERTAIN APPEALS FROM BEING OBSTRUCTED DUE TO FINA NCIAL LIMITS. PARAGRAPH 3 READS: THE BOARD HAS ALSO DECIDED THAT IN CASES INVOLVING SUBSTANTIAL QUESTION OF LAW OF IMPORTANCE AS WELL AS IN CASES WHERE THE SAME QUESTION OF LAW WILL REPEATEDLY ARISE, EITHER IN THE CASE CONCERNED OR IN SIMILAR CASES, SHOUL D BE SEPARATELY CONSIDERED ON THE MERITS WITHOUT BEING HINDERED BY THE MONETARY LIMITS. IT IS EVIDENT THAT, WHENEVER THERE IS A SUBSTANTIAL QUESTION OF LAW, OR QUESTION OF LAW WHICH IS LIKELY TO RECUR IN FUTURE, THE DEPARTMENT IS NOT PROHIBITED FROM FILIN G AND PURSUING APPEALS. WE BELIEVE THAT THE SAVING CLAUSE SAVES THE PRESENT APPEAL SINCE IT INVOLVES A QUESTION OF LAW REGARDING INTERPRETATION OF SECTION 275(1) (C) OF THE ACT, AND MORE PARTICULARLY TH E ASPECT OF MANNER IN WHICH THE LIMITATION SHOULD BE CO MPUTED IN THE LIGHT OF THE SAID PROVISIONS. WE HAVE, THEREFORE, PROCEEDED TO HEAR THE ADVOCATES ON THE MERITS. IN OUR OPINION, THE CASE OF CIT V CHHAJER WAS WITH RESPECT OF INTERPRETATION OF 275(1) (C) OF THE ACT AND HENCE CAME UNDER THE ITA NO.19/NAG/2011 GAJANAN CONSTRUCTION CO., CHANDRAPUR 3 EXCEPTION CLAUSE UN DER THE CBDT CIRCULAR AND WAS NOT OBSTRUCTED BY THE MONETARY LIMIT OF RS 3 LAKHS PRESCRIBED BY THE CIRCULAR. THEREFORE THE CASE OF 300 ITR 180 IS INAPPLICABLE TO THE FACTS OF OUR CASE. FURTHER INSTRUCTION NO. 5 DT. 15.5.2008 FIXING THE MONETARY LIMIT AT RS 2 LAKHS IS SIMILAR TO THAT OF INSTRUCTION NO. 3 DATED 9.2.2011 WHICH THE ASSESSEE HAS BROUGHT TO OUR NOTICE IN SUPPORT OF HIS CONTENTION. SINCE BOTH THE INSTRUCTION NOS. 5 & 3 ARE IDENTICAL, THE RATIO OF THE DECISION IN THE CASE OF CIT V PITHWA ENGG. WORK WHICH DEALS WITH INSTRUCTION NO. 5 DT. 15.5.2008 SHALL EQUALLY APPLY TO THE PRESENT CASE WHICH FALLS UNDER INSTRUCTION NO. 3 DATED 9.2.2011. FOLLOWING THE RATIO OF THE DECISION IN THE CASE OF CIT V PITHWA ENGG. WORK WHEREIN IT HAS BEEN HELD THAT IN OUR VIEW, THE BOARD S CIRCULAR DT. 27 TH MARCH, 2000 IS VERY MUCH APPLICABLE EVEN TO THE OLD REFERENCES WHICH ARE STILL UNDECIDED , WE DISMISS THE DEPARTMENTAL APPEAL ON THE GROUND THAT THE TAX EFFECT IS LESS THAN 3 LAKHS. 5. FOLLOWING THE AFORESAID PRECEDENT, THE CAPTIONED APPEAL FILED BY THE REVENUE IS LIABLE TO BE DISMISSED I N VIEW OF CBDT INSTRUCTION NO. 3 DATED 9.2.2011 (SUPRA) AS THE TAX EFFECT WITH RESPECT TO THE QUANTUM OF RELIEF ALLOWED BY THE COMMISSIONER OF INCOME - TAX (APPEALS) IS BELOW RS 3 LAKHS A ND IT HAS NOT BEEN SHOWN THAT THE APPEAL FALL S UNDER ANY OF THE EXCEPTIONS PROVIDED IN PARA 8 OF THE CBDT INSTRUCTION (SUPRA). WE ORDER ACCORDINGLY. PRONOUNCED IN THE OPEN COURT ON 19.10 .201 2 SD/ - SD/ - ( D.T. GARASIA ) ( P.K. BANSAL ) JUDICIAL MEMBER ACCOUNTANT MEMBER VG/SPS NAGPUR DATED 19 TH OCTOBER , 20 1 2 COPY TO 1 ACIT, CHANDRAPUR 2 M/S. GAJANAN CONSTRUCTION COMPANY, KOTWALI WARD, CHANDRAPUR 3 THE CIT - I II , NAGPUR 4 THE CIT(A), 5 THE DR, ITAT, 6 GUARD FILE. BY ORDER SR. PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL NA GPUR