DCIT, Central Circle-1, Nashik V. Shri Amit Digvijay Singh, Nashik

ITA 1940/PUN/2012

• Counselvise Citation: [2015] 121 COUNSELVISE.COM (IT) 2342 (ITAT-PUNE)
• Duration Of Justice: 3 year(s) 2 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-12-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 08-10-2015
• Assessment Year: 2003-2004
• Appeal Filed On: 05-10-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K RASTOGI
• Assessee Lawyers: S N DOSHI; B
• Keywords: Tax effect
• Section: 12A

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE . . , , ' # BEFORE SHRI R.K. PANDA, AM AND SHRI VIKAS AWASTHY, JM . / ITA NO.1940/PN/2012 '% % / ASSESSMENT YEAR : 2003-04 ACIT, CENTRAL CIRCLE-1, NASHIK . / APPELLANT V/S SHRI AMIT DIGVIJAY SINGH, DURGESH RESIDENCY, GANGAPUR ROAD, NASHIK PAN NO. AQZPS2999F . / RESPONDENT / APPELLANT BY : SHRI S.K. RASTOGI, CIT / RESPONDENT BY : SHRI S.N. DOSHI & B / ORDER PER R.K. PANDA, AM : THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAINST THE ORDER DATED 24-07-2012 OF THE CIT(A)-I, NASHIK RELATING TO ASS ESSMENT YEAR 2003-04. 2. THE LD. COUNSEL FOR THE ASSESSEE AT THE OUTSET SUBM ITTED THAT THE TAX EFFECT ON THE GROUNDS RAISED BY THE REVENUE IS LESS THAN RS.10 LAKHS. THEREFORE, IN VIEW OF THE LATEST CIRCULAR OF CBDT NO.21/2015 DATED 10-12-2015 THE APPEAL OF THE REVENUE IS NOT MAINTAINABLE AND HAS TO BE DISMISSED. IT IS FURTHER PROVID ED VIDE THE SAID CIRCULAR ITSELF THAT THE SAID LIMIT WOULD BE APPLICABLE NOT ONLY TO ALL FUTURE TAX LITIGATIONS BUT EVEN TO THE PENDING APPEALS WHERE THE / DATE OF HEARING :21.12.2015 / DATE OF PRONOUNCEMENT:23.12.2015 2 ITA NO.1940/PN/2012 TAX INVOLVED IN THE APPEALS DOES NOT EXCEED RS.10 LAKHS A ND THE SAME SHALL NOT BE PRESSED OR WITHDRAWN. 3. THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVEN UE FAIRLY AGREED TO THE CONTENTION RAISED BY THE LEARNED AU THORIZED REPRESENTATIVE FOR THE ASSESSEE. 4. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE ISSUE ARISING IN THE PRESENT APPEAL IS IN RELATION TO T HE ADDITIONS, WHEREIN THE TAX EFFECT IS LESS THAN RS.10 LAKHS. IN THIS BA CKGROUND, WE HAVE TO CONSIDER THE CIRCULAR NO.21/2015 DATED 10.12.2 015 OF CBDT. THE CBDT VIDE THE SAID CIRCULAR HAS ANNOUNCED TH AT SUBJECT TO CERTAIN EXCEPTIONS, NO DEPARTMENTAL APPEAL WOULD BE FILED AGAINST THE RELIEF GIVEN BY THE CIT(A) BEFORE THE TRIBUNAL, WHERE THE TAX EFFECT EXCLUDING INTEREST DOES NOT EXCEED RS.10 LAKHS. THE SAID INSTRUCTIONS ARE MADE APPLICABLE NOT ONLY TO THE FUTURE A PPEALS TO BE FILED BY THE REVENUE BUT EVEN TO THE PENDING APPEALS WHE RE THE TAX INVOLVED IN EACH OF THE APPEAL DOES NOT EXCEED RS.10 LAKH S, THE SAME ARE INSTRUCTED NOT TO BE PRESSED OR TO BE WITHDRAWN B Y THE REVENUE. IN VIEW THEREOF, WHERE AN APPEAL IS PENDING BEFORE THE TRIB UNAL, IRRESPECTIVE OF THE YEAR TO WHICH IT RELATES, THE SAID INSTRUCTIONS OF T HE CBDT WOULD BE APPLICABLE AND THE APPEALS OF THE REVENUE P ENDING BEFORE THE TRIBUNAL WHERE THE TAX EFFECT IS LESS THAN RS. 10 LAKHS WOULD BECOME NULLITY. THE RELEVANT EXTRACT OF THE CIRCULAR IS AS UNDER:- 3. HENCEFORTH, APPEALS/SLPS SHALL NOT BE FILED IN CASES WHERE THE TAX EFFECT DOES NOT EXCEED THE MONETARY LIMITS GIVEN UN DER:- 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/ - 3 ITA NO.1940/PN/2012 IT IS CLARIFIED THAT AN APPEAL SHOULD NOT BE FILED MERELY BECAUSE THE TAX EFFECT IN A CASE EXCEEDS THE MONETARY LIMITS PRESCR IBED 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 WOULD HAVE BEEN CHARGEABLE HAD SUCH TOTAL INCOME BEEN REDUCED BY THE AMOUNT OF INCOME IN RESPECT OF THE ISSUES AGAINST WHICH APPEAL IS INTENDED TO BE F ILED (HEREINAFTER REFERRED TO AS DISPUTED ISSUES). HOWEVER, THE TAX WILL NO T INCLUDE ANY INTEREST THEREON, EXCEPT WHERE CHARGEABILITY OF INTEREST ITS ELF IS IN DISPUTE. IN CASE THE CHARGEABILITY OF INTEREST IS THE ISSUE UNDER DI SPUTE, 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 NO TIONAL TAX ON DISPUTED ADDITIONS. IN CASE OF PENALTY ORDERS, THE TAX EFFE CT WILL MEAN QUANTUM OF PENALTY DELETED OR REDUCED IN THE ORDER TO BE APPEA LED 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 ASSESSMENT. IF, IN THE CASE OF AN ASSESSEE, THE DI SPUTED ISSUES ARISE IN MORE THAN ONE ASSESSMENT YEAR, APPEAL, CAN BE FILED IN R ESPECT OF SUCH ASSESSMENT YEAR OR YEARS IN WHICH THE TAX EFFECT IN RESPECT OF THE DISPUTED ISSUES EXCEEDS THE MONETARY 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 OT HER WORDS, HENCEFORTH, APPEALS CAN BE FILED ONLY WITH REFERENCE TO THE TAX EFFECT IN THE RELEVANT ASSESSMENT YEAR. HOWEVER, IN CASE OF A COMPOSITE O RDER OF ANY HIGH COURT OF APPELLATE AUTHORITY, WHICH INVOLVES MORE THAN ON E ASSESSMENT YEAR AND COMMON ISSUES IN MORE THAN ONE ASSESSMENT YEAR, APP EAL SHALL BE FILED IN RESPECT OF ALL SUCH ASSESSMENT YEARS EVEN IF THE T AX 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 EFFE CT EXCEEDS THE MONETARY LIMIT PRESCRIBED. IN CASE WHERE A COMPOSITE ORDER / JUDGMENT INVOLVES MORE THAN ONE ASSESSEE, EACH ASSESSEE SHALL BE DEAL T WITH SEPARATELY. 5. THE CBDT HAS FURTHER CLARIFIED THAT IN CASE THE DISPUTED ISSUE ARISES IN MORE THAN ONE ASSESSMENT YEAR, THEN THE APPE AL CAN BE FILED IN RESPECT OF SUCH ASSESSMENT YEAR OR YEARS IN WHIC H THE TAX EFFECT IN RESPECT OF THE DISPUTED ISSUE EXCEEDS THE MONET ARY LIMIT SPECIFIED IN PARA 3 I.E. RS.10 LAKHS BEFORE THE TRIBUNAL. IT IS FURTHER DIRECTED THAT HENCEFORTH, THE APPEALS CAN BE FILED BY THE REVENUE ONLY WITH REFERENCE TO THE TAX EFFECT IN THE RELEVANT ASS ESSMENT YEAR. HOWEVER, IN CASE OF A COMPOSITE ORDER OF ANY HIGH COURT OR APPELLATE AUTHORITY, WHICH INVOLVES MORE THAN ONE ASSESSMENT YEAR AND COMMON ISSUES IN MORE THAN ONE ASSESSMENT YEAR, THEN A PPEAL SHALL 4 ITA NO.1940/PN/2012 BE FILED IN RESPECT OF SUCH ASSESSMENT YEAR, EVEN IF THE TA X EFFECT IS LESS THAN THE PRESCRIBED MONETARY LIMITS IN ANY OF THE YEA R(S), IF IT IS DECIDED TO FILE APPEAL IN RESPECT OF THE YEAR(S) IN WHICH TA X EFFECT EXCEEDS THE MONETARY LIMIT PRESCRIBED. WHERE A COMPOSIT E ORDER / JUDGMENT INVOLVES MORE THAN ONE ASSESSEE, THEN EACH AS SESSEE SHALL BE DEALT WITH SEPARATELY. IT IS ALSO PROVIDED FURTHER VID E PARAS 6 AND 7 THAT WHERE THE APPEAL BEFORE THE TRIBUNAL WAS NOT FILED ONLY ON ACCOUNT OF TAX EFFECT BEING LESS THAN SPECIFIED MONETARY LIMIT , THEN THE INCOME-TAX DEPARTMENT SHALL NOT BE PRECLUDED FROM FILIN G AN APPEAL AGAINST THE DISPUTED ISSUES IN THE CASE OF THE SAM E ASSESSEE FOR ANY OTHER ASSESSMENT YEAR, OR IN CASE OF ANY OTHER ASSESSEE FOR THE SAME OR ANY OTHER ASSESSMENT YEAR, IF THE TAX EFFECT EXCEEDS THE SPECIFIED MONETARY LIMITS. THE CBDT HAS FURTHER VIDE PARA 8 SPECIFIED THE ISSUE WHICH SHOULD BE CONTESTED ON MERITS NOTWITHSTANDING THAT THE TAX EFFECT ENTAILED IS LESS THAN T HE MONETARY LIMITS SPECIFIED. FURTHER, THE SPECIFIED MONETARY LIMITS AS PER PARA 9 WOULD NOT APPLY TO WRIT MATTERS AND DIRECT TAX MATTERS OTHER THAN INCOME TAX AND ALSO IS NOT APPLICABLE TO THE APPEALS WHER E TAX EFFECT IS NOT QUANTIFIABLE OR NOT INVOLVED, SUCH AS THE CASE OF REG ISTRATION OF TRUSTS OR INSTITUTIONS UNDER SECTION 12A OF THE ACT. IN SUCH CASES, THE DECISION TO FILE AN APPEAL IS TO BE TAKEN ON THE MERITS OF A PARTICULARS CASE. THE PARAS 6 TO 9 OF THE CIRCULAR READ AS UNDER:- 6. IN A CASE WHERE APPEAL BEFORE A TRIBUNAL OR A C OURT IS NOT FILED ONLY ON ACCOUNT OF THE TAX EFFECT BEING LESS THAN THE MO NETARY LIMIT SPECIFIED ABOVE, THE COMMISSIONER OF INCOME-TAX SHALL SPECIFI CALLY RECORD THAT EVEN THOUGH THE DECISION IS NOT ACCEPTABLE, APPEAL IS NO T BEING FILED ONLY ON THE CONSIDERATION THAT THE TAX EFFECT IS LESS THAN THE MONETARY LIMIT SPECIFIED IN THIS INSTRUCTION. IN SUCH CASES, THERE WILL BE NO PRESUMPTION THAT THE INCOME-TAX DEPARTMENT HAS ACQUIESCED IN THE DECISIO N ON THE DISPUTED ISSUES. THE INCOME-TAX DEPARTMENT SHALL NOT BE PRE CLUDED FROM FILING AN APPEAL AGAINST THE DISPUTED ISSUES IN THE CASE OF T HE SAME ASSESSEE FOR ANY OTHER ASSESSMENT YEAR, OR IN THE CASE OF ANY OTHER ASSESSEE FOR THE SAME OR ANY OTHER ASSESSMENT YEAR, IF THE TAX EFFECT EXCEED S THE SPECIFIED MONETARY LIMITS. 5 ITA NO.1940/PN/2012 7. IN THE PAST, A NUMBER OF INSTANCES HAVE COME TO THE NOTICE OF THE BOARD, WHEREBY AN ASSESSEE HAS CLAIMED RELIEF FROM THE TRIBUNAL OR THE COURT ONLY ON THE GROUND THAT THE DEPARTMENT HAS IM PLICITLY ACCEPTED THE DECISION OF THE TRIBUNAL OR COURT IN THE CASE OF TH E ASSESSEE FOR ANY OTHER ASSESSMENT YEAR OR IN THE CASE OF ANY OTHER ASSESSE E FOR THE SAME OR ANY OTHER ASSESSMENT YEAR, BY NOT FILING AN APPEAL ON T HE SAME DISPUTED ISSUES. THE DEPARTMENTAL REPRESENTATIVES/COUNSELS MUST MAKE EVERY EFFORT TO BRING TO THE NOTICE OF THE TRIBUNAL OR THE COURT TH AT THE APPEAL IN SUCH CASES WAS NOT FILED OR NOT ADMITTED ONLY FOR THE RE ASON OF THE TAX EFFECT BEING LESS THAN THE SPECIFIED MONETARY LIMIT AND, T HEREFORE, NO INFERENCE SHOULD BE DRAWN THAT THE DECISIONS RENDERED THEREIN WERE ACCEPTABLE TO THE DEPARTMENT. ACCORDINGLY, THEY SHOULD IMPRESS U PON THE TRIBUNAL OR THE COURT THAT SUCH CASES DO NOT HAVE ANY PRECEDENT VALUE. AS THE EVIDENCE OF NOT FILING APPEAL DUE TO THIS INSTRUCTION MAY HA VE TO BE PRODUCED IN COURTS, THE JUDICIAL FOLDERS IN THE OFFICE OF CIT M UST BE MAINTAINED IN A SYSTEMIC MANNER FOR EASY RETRIEVAL. 8. ADVERSE JUDGMENTS RELATING TO THE FOLLOWING ISSU ES SHOULD BE CONTESTED ON MERITS NOTWITHSTANDING THAT THE TAX EF FECT ENTAILED IS LESS 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 OBJECT IN THE CASE HAS BEEN ACC EPTED BY THE DEPARTMENT, OR (D) WHERE THE ADDITION RELATES TO UNDISCLOSED FOREIGN A SSETS / BANK ACCOUNTS. 9. THE MONETARY LIMITS SPECIFIED IN PARA 3 ABOVE SH ALL NOT APPLY TO WRIT MATTERS AND DIRECT TAX MATTERS OTHER THAN INCO ME TAX. FILING OF APPEALS IN OTHER DIRECT TAX MATTERS SHALL CONTINUE TO BE GOVERNED BY RELEVANT PROVISIONS OF STATUTE & RULES. FURTHER, F ILING OF APPEAL IN CASES OF INCOME TAX, WHERE THE TAX EFFECT IS NOT QUANTIFIABL E OR NOT INVOLVED, SUCH AS THE CASE OF REGISTRATION OF TRUSTS OR INSTITUTIONS UNDER SECTION 12A OF THE IT ACT, 1961, SHALL NOT BE GOVERNED BY THE LIMITS SPEC IFIED IN PARA 3 ABOVE AND DECISION TO FILE APPEAL IN SUCH CASES MAY BE TAKEN ON MERITS OF A PARTICULAR CASE. 6. THE RETROSPECTIVE OPERATION OF THE INSTRUCTIONS TO PEN DING APPEALS IS PROVIDED IN PARA 10 OF THE CIRCULAR, WHICH READS AS UNDER:- 10. THIS INSTRUCTION WILL APPLY RETROSPECTIVELY TO PENDING APPEALS AND APPEALS TO BE FILED HENCEFORTH IN HIGH COURTS / TRI BUNALS. PENDING APPEALS BELOW THE SPECIFIED TAX LIMITS IN PARA 3 ABOVE MAY BE WITHDRAWN / NOT PRESSED. APPEALS BEFORE THE SUPREME COURT WILL BE GOVERNED BY THE INSTRUCTIONS ON THIS SUBJECT, OPERATIVE AT THE TIME WHEN SUCH APPEAL WAS FILED. 6 ITA NO.1940/PN/2012 7. IN VIEW OF THE ABOVE SAID INSTRUCTIONS OF CBDT WHERE T HE TAX EFFECT IS LESS THAN RS.10 LAKHS, THE APPEAL FILED BY THE REVEN UE, WHICH ARE PENDING BEFORE THE TRIBUNAL ARE NOT TO BE PRES SED OR WITHDRAWN BY THE REVENUE AUTHORITIES. SINCE THE TAX EFFEC T IN THE INSTANT APPEAL FILED BY THE REVENUE IS ADMITTEDLY LESS THA N RS.10 LAKHS, THEREFORE, IN VIEW OF THE INSTRUCTIONS OF CBDT AND TH E ENTIRETY OF FACTS, WE DISMISS THE APPEAL FILED BY THE REVENUE AS NOT MAINTAINABLE. 8. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 23-12-2015. SD/- SD/- ( VIKAS AWASTHY ) ( R.K. PANDA ) JUDICIAL MEMBER ACCOUNTANT MEMBER PUNE ; DATED : 23 RD DECEMBER, 2015. ( )'+ , / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. THE CIT(A) - I, NASHIK 4. 5. 6. THE CIT-I, NASHIK % ((), ), / DR, ITAT, A PUNE; . / GUARD FILE. / BY ORDER , % // % ( //TRUE COPY// 01 ( ) / SR. PRIVATE SECRETARY ), / ITAT, PUNE