ACIT, Cir-2(2), Kolkata, Kolkata V. M/s Vishnu Solutions Pvt. Ltd., Kolkata

ITA 1905/KOL/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 1908 (ITAT-KOLKATA)
• Duration Of Justice: 6 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-04-2017
• Appeal Filed By: Department
• Bench Allotted: SMC
• Next Hearing Date: 24-02-2017
• Assessment Year: 2010-2011
• Appeal Filed On: 29-09-2016
• Court: TRIBUNAL
• Department Lawyers: ANIL KR PAND E CIT LD
• Keywords: Audit objection; Tax effect

Judgement Text

1 ITA NO.1905 & CO NO. 75/K/16-TE M/S. VISHNU SOLUTIONS PVT.LTD. IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH: KOL KATA BEFORE: SHRI S.S. VISWANETHRA RAVI, JUDICIAL MEMBER AND SHRI DR. ARJUN LAL SAINI, AC COUNTANT MEMBER I.T.A NO. 1905/KOL/2 016 ASSESSMENT YEAR: 201 0-11 ASSISTANT COMMISSIONER VS. M/S. VISHNU SOLUTIONS P VT.LTD OF INCOME TAX, CIR-2(2) PAN: AABCV1738L KOLKATA [ APPELLANT] [ RESPONDENT ] C.O NO.75/KOL/2016 [I.T.A NO. 1905/KOL/2016 A.Y 2010-11] ASSISTANT COMMISSIONER VS. M/S. VISHNU SOLUTIONS P VT.LTD OF INCOME TAX, CIR-2(2) PAN: AABCV1738L KOLKATA [ CROSS OBJECTOR/ASSESSEE] [ RESPONDENT ] FOR THE APPELLANT/DEPARTMENT : SHRI ANIL KR. PAND E, ADDL.CIT, LD.DR FOR THE CROSS OBJECTOR/ASSESSEE : SHRI M.M BANERJE E, LD.AR DATE OF HEARING : 17-04-2017 DATE OF PRONOUNCEMENT : 17-04-2017 ORDER SHRI S.S.VISWANETHRA RAVI, JM: THIS APPEAL BY REVENUE AND CORRESPONDING CROSS OBJE CTION BY ASSESSEE BOTH ARE ARISING OUT OF ORDERS DATED 21 ST JULY, 2016 OF CIT(A), 10, KOLKATA FOR THE ASSESSMENT YEAR 2010-11. 2. IT IS SEEN FROM THE PERUSAL OF THE RECORDS THA T THE TOTAL TAX EFFECT ON THE ADDITIONS DISPUTED BEFORE US IS ADMITTEDLY BELOW THE TAX EFFECT LIMIT PRESCRIBED BY CBDT VIDE CIRCULAR NO. 21 / 201 5 DATED 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 :- 2 ITA NO.1905 & CO NO. 75/K/16-TE M/S. VISHNU SOLUTIONS PVT.LTD. 3. HENCEFORTH, APPEALS / SLPS SHALL NOT BE FILED IN CASES WHERE THE TAX EFFECT DOES NOT EXCEED THE MONETARY LIMITS GIVE N 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 PR ESCRIBED ABOVE. FILING 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 W OULD HAVE BEEN CHARGEABLE HAD SUCH TOTAL INCOME BEEN REDUCED BY TH E AMOUNT OF INCOME IN RESPECT OF THE ISSUES AGAINST WHICH APPEA L IS INTENDED TO BE FILED (HEREINAFTER REFERRED TO AS DISPUTED ISSU ES). HOWEVER, THE TAX WILL NOT INCLUDE ANY INTEREST THEREON, EXCEPT W HERE CHARGEABILITY OF INTEREST ITSELF IS IN DISPUTE. IN CASE THE CHAR GEABILITY OF INTEREST IS THE ISSUE UNDER DISPUTE, THE AMOUNT OF INTEREST SHA LL BE THE TAX EFFECT. IN CASES WHERE RETURNED 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 EFF ECT WILL MEAN QUANTUM OF 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 IS SUES IN THE CASE OF EVERY ASSESSEE. IF, IN THE CASE OF AN ASSESSEE, THE DISPUTED ISSUES ARISE IN MORE THAN ONE ASSESSMENT YEAR , APP EAL, CAN BE FILED IN RESPECT OF SUCH ASSESSMENT YEAR OR YEARS IN WHIC H THE TAX EFFECT IN RESPECT OF THE DISPUTED ISSUES EXCEEDS THE MONET ARY LIMIT SPECIFIED 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 ASSESSMENT YEAR. HOWEVER, IN CASE OF A C OMPOSITE ORDER OF ANY HIGH COURT OR APPELLATE AUTHORITY, WHICH INV OLVES MORE THAN ONE ASSESSMENT YEAR AND COMMON ISSUES IN MORE THAN ONE ASSESSMENT YEAR, APPEAL SHALL BE FILED IN RESPECT O F ALL SUCH ASSESSMENT YEARS EVEN IF THE TAX EFFECT IS LESS T HAN THE PRESCRIBED MONETARY LIMITS IN ANY OF THE YEAR(S), IF IT IS DEC IDED TO FILE APPEAL IN RESPECT OF THE YEAR(S) IN WHICH TAX EFFECT EXCEED S THE MONETARY LIMIT PRESCRIBED. IN CASE WHERE A COMPOSITE ORDER / JUDGEMENT 3 ITA NO.1905 & CO NO. 75/K/16-TE M/S. VISHNU SOLUTIONS PVT.LTD. INVOLVES MORE THAN ONE ASSESSEE, EACH ASSESSEE SHAL L BE DEALT WITH SEPARATELY. 8. ADVERSE JUDGEMENTS RELATING TO THE FOLLOWING ISS UES SHOULD BE CONTESTED ON MERITS NOTWITHSTANDING THAT THE TAX EF FECT ENTAILED IS LESS THAN THE MONETARY LIMITS SPECIFIED IN PARA 3 A BOVE 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/ TRIB UNALS. PENDING APPEALS BELOW THE SPECIFIED TAX LIMITS IN PARA 3 AB OVE MAY BE WITHDRAWN / NOT PRESSED. APPEALS BEFORE THE SUPREM E COURT WILL BE GOVERNED BY THE INSTRUCTIONS ON THIS SUBJECT, OPERA TIVE AT THE TIME WHEN SUCH APPEAL WAS FILED. 2.1 WE FIND THAT INTENTION BEHIND THE CIRCULAR NO.2 1/2015 DATED 10-12- 2015 NEEDS TO BE UNDERSTOOD IN THE FOLLOWING PERSPE CTIVE:- 2.2 ON PERUSAL OF THE CIRCULAR NO. 21 / 2015 DATED 10.12.2015 AND THE MATERIALS AVAILABLE ON RECORD, WE COULD NOT SEE WHE THER THE IMPUGNED CASE FALLS UNDER ANY OF THE EXCEPTIONS CONTEMPLATED IN THE SAID CIRCULAR. WE ALSO FIND THAT THE CIRCULAR MAKES IT VERY CLEAR THAT THE REVISED MONETARY LIMITS SHALL APPLY RETROSPECTIVELY TO PEND ING APPEALS ALSO. WE FIND THAT THE CIRCULAR IS BINDING ON THE TAX AUTHOR ITIES. THIS POSITION HAS BEEN CONFIRMED BY THE HONBLE APEX COURT IN THE CASE OF COMMISSIONER OF CUSTOMS VS INDIAN OIL CORPORATION L TD REPORTED IN 267 ITR 272 (SC) WHEREIN THEIR LORDSHIPS EXAMINED THE EARLIER DECIS IONS OF THE APEX COURT WITH REGARD TO BINDING NATURE OF THE CIRCULARS 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 4 ITA NO.1905 & CO NO. 75/K/16-TE M/S. VISHNU SOLUTIONS PVT.LTD. VALID OR THAT IT IS CONTRARY TO THE TERMS OF THE ST ATUTE. HENCE WE HOLD THAT THE APPEAL(S) OF THE REVENUE DESERVE TO BE DISMISSE D IN TERMS OF LOW TAX EFFECT VIDE CIRCULAR NO.21 / 2015 DATED 10.12.2015. ACCORDINGLY, THIS BEING A LOW TAX EFFECT CASE, WE DISMISS THE APPEAL OF THE REVENUE IN LIMINE, AS UNADMITTED, WITHOUT GOING INTO THE MERIT S OF THE CASE. THE APPEAL OF THE REVENUE IS DISMISSED. C.O NO. 75/KOL/16 ARISING OUT OF ITA NO.1905/KOL/2 016 FOR THE A.Y 2010-11 (BY THE ASSESSEE). 3. SINCE THE C.O IS ARISEN FROM THE IMPUGNED ORDER OF THE CIT-A, WHICH WE HAVE UPHELD BY DISMISSING THE SAID REVENUES APP EAL, THE C.O FILED BY THE ASSESSEE IS DISMISSED BEING INFRUCTUOUS. 4. IN THE RESULT, THE APPEAL OF THE REVENUE AND CR OSS OBJECTION OF THE ASSESSEE BOTH ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 17-04-2017 SD/- SD/- DR. ARJUN LAL SAINI S.S. VISWANETHRA RAVI ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 17-04-2017 PP(SR.P.S.) COPY OF THE ORDER FORWARDED TO: 1. APPELLANT THE ASSISTANT COMMISSIONER OF INCOME TA X, CIR-2(2) AAYKAR BHAWAN, P-7 CHOWRINGHEE SQUARE, KOLKATA-69. 2 RESPONDENT M/S. VISHNU SOLUTIONS PVT. LTD 8 N.S R OAD, C-3/3, GILLANDER HOUSE, KOLKATA-700 001. 3 . THE CIT(A), KOLKATA 4. 5. CIT , KOLKATA DR, KOLKATA BENCHES, KOLKATA 5 ITA NO.1905 & CO NO. 75/K/16-TE M/S. VISHNU SOLUTIONS PVT.LTD. / TRUE COPY, BY ORDER, ASSTT. REGISTRAR .