ITO, Ward - 55(1), Kolkata, Kolkata V. M/s. Pashupati Traders, Kolkata

ITA 1968/KOL/2010

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 59584 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 3 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-02-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 06-07-2011
• Assessment Year: 2002-2003
• Appeal Filed On: 21-10-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P S DUTTA
• Keywords: Audit objection; Tax effect; Condonation of delay
• Section: 260A; 12A

Judgement Text

1 , C , , IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH- C, KOL KATA [ , . . , ! ] BEFORE SHRI MAHAVIR SINGH, JUDICIAL MEMBER & SRI C.D. RAO, ACCO UNTANT MEMBER ' ' ' ' / ITA NO. 1968 (KOL) OF 2010 #$ %& / ASSESSMENT YEAR 2002-03 INCOME - TAX OFFICER, WARD - 55(1), KOLKATA. - # - - VERSUS - M/S. PASHUPATI TRADERS , KOLKATA. (PAN-AAHFP6621M) ( '( / APPELLANT ) ( )*'( / RESPONDENT ) '( + , / FOR THE APPELLANT: / SRI P.S. DUTTA )*'( + , / FOR THE RESPONDENT: / SRI P.K. SINGH -#. + ! /DATE OF HEARING : 01/02/2012 /% + ! /DATE OF PRONOUNCEMENT : 01/02/2012 0 / ORDER ( ,) (MAHAVIR SINGH), JUDICIAL MEMBER : THIS APPEAL BY REVENUE IS ARISING OUT OF THE ORDER OF THE CIT(A)-XXXVI, KOLKATA IN APPEAL NO56/CIT(A)-XXXVI/KOL/SET ASIDE/W D.55(1)KOL/09-10/08-09,DATED 19/05/2010. ASSESSMENT WAS FRAMED BY I.T.O., WARD-5 5(1), KOLKATA U/S. 144 OF THE INCOME-TAX ACT, 1961 (HEREINAFTER REFERRED TO AS T HE ACT) FOR ASSESSMENT YEAR 2002- 03 VIDE HIS ORDER DATED 21/03/2005. 2. THIS APPEAL OF REVENUE IS DELAYED BY 41 DAYS AN D FILED CONDONATION PETITION STATING THAT THERE IS NO DELIBERATE CAUSE FOR DELAY , AS FOR PASSING ORDER U/S. 251 OF THE ACT, PAST RECORDS FOR ASSESSMENT YEAR 2001-02 WAS N EEDED WHICH WAS NOT READILY AVAILABLE AND THUS TOOK TIME TO SEARCH OUT. FINALL Y, ORDER WAS PASSED ON 30/9/2010 AND SCRUTINY REPORT WAS SENT AND IN THE PROCESS APP ROVAL FROM CIT KOL-XX, FOR FILING APPEAL BEFORE TRIBUNAL WAS RECEIVED ON 20/10/2010. HENCE DELAY OCCURRED. LEARNED COUNSEL HAS NOT OBJECTED TO CONDONATION OF DELAY AN D HE CONCEDED THE POSITION. AS 2 LEARNED COUNSEL CONCEDED THE POSITION, WE HAVE NO H ESITATION IN CONDONING THE DELAY AND ADMITTING THE APPEAL. 3. AT THE TIME OF HEARING LD. COUNSEL FOR THE ASSE SSEE STATED THAT THAT TAX EFFECT IN THIS APPEAL OF THE REVENUE IS BELOW THE PRESCRIB ED MONETARY LIMITS FOR FILING OF APPEAL BEFORE ITAT AND OTHER SUPERIOR COURTS. IT S EEMS THAT THE REVENUES APPEAL, THE AMOUNT IN DISPUTE INVOLVED IS RS.8,21,357/- ON WHICH TAX DEMAND TO BE RAISED ON THE ASSESSEE IS RS.2,93,226/-. THE ONLY ISSUE NOW R EMAINS BEFORE US IS THAT THE APPEAL OF THE REVENUE IS BELOW THE PRESCRIBED LIMIT OF TAX EFFECT IN VIEW OF THE BOARDS INSTRUCTION ISSUED FROM TIME TO TIME REVISING THE M ONETARY LIMITS FOR FILING OF APPEALS BY THE DEPARTMENT BEFORE ITAT AND OTHER SUPERIOR CO URTS. THE APPEAL RELATES TO ASSESSMENT YEAR 2002-03 AND FILED BEFORE THE TRIBUN AL ON 21.10.2010. SINCE THIS APPEAL FILED ON 21.10.2010, THE SAME WILL BE COVERE D BY INSTRUCTION NO. 3/2011 ISSUED ON 09.02.2011 I.E. THE REVISED MONETARY LIMI T FOR FILING OF APPEAL BEFORE ITAT, WHEREBY THE CBDT HAS FIXED THE LIMIT OF RS. 3 LACS. HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS DELHI RACE CLUB IN ITA NO.128/2008 D ATED 03.03.2011 HAS HELD AS UNDER: THE TAX EFFECT INVOLVED IN THE PRESENT APPEAL IS RS.4,65,860/-. AS PER THE RECENT GUIDELINES OF THE CBDT, APPEAL IN THOSE CASE S WHERE THE TAX EFFECT IS LESS THAN 10 LACS, ARE NOT TO BE ENTERTAINED. THIS COURT IN THE CASE OF COMMISSIONER OF INCOME TA X-III V. M/S. P. S. JAIN AND CO. BEING ITA NO. 179/1991 DECIDED ON 2 ND AUGUST, 2010 HAS TAKEN A VIEW THAT SUCH CIRCULAR WOULD ALSO APPLY TO PENDING CASES. IN VIEW OF THE DECISION OF HONBLE DELHI HIGH COURT , THE REVISED MONETARY LIMIT OF RS. 3 LACS AS PER INSTRUCTION NO.3/2011 WILL APPLY TO PEN DING APPEALS. THE RELEVANT CIRCULAR ISSUED BY CBDT READS AS UNDER : INSTRUCTION NO. 3/2011 [F. NO. 279/MISC. 142/2007- ITJ], DATED 9-2-2011 REFERENCE IS INVITED TO BOARD'S INSTRUCTION NO. 5/2 008 DATED 15-5-2008 WHEREIN MONETARY LIMITS AND OTHER CONDITIONS FOR FILING DEP ARTMENTAL APPEALS (IN INCOME- TAX MATTERS) BEFORE APPELLATE TRIBUNAL, HIGH COURTS AND SUPREME COURT WERE SPECIFIED. 2. IN SUPERSESSION OF THE ABOVE INSTRUCTION, IT HAS BE EN DECIDED BY THE BOARD THAT DEPARTMENTAL APPEALS MAY BE FILED ON MERITS BEFORE APPELLATE TRIBUNAL, HIGH COURTS AND SUPREME COURT KEEPING IN VIEW THE MONETA RY LIMITS AND CONDITIONS SPECIFIED BELOW. 3 3. HENCEFORTH APPEALS SHALL NOT BE FILED IN CASES WHER E THE TAX EFFECT DOES NOT EXCEED THE MONETARY LIMITS GIVEN HEREUNDER: S. NO. APPEALS IN INCOME-TAX MATTERS MONETARY LIMIT (IN RS.) 1. APPEAL BEFORE APPELLATE TRIBUNAL 3,00,000 2. APPEAL U/S. 260A BEFORE HIGH COURT 10,00,00 0 3. APPEAL 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. FILING OF APPEAL IN SUCH CASES IS TO BE DECIDED ON MERITS OF THE CASE. 4. FOR THIS PURPOSE, TAX EFFECT MEANS THE DIFFERENCE 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 RESP ECT OF THE ISSUES AGAINST WHICH APPEAL IS INTENDED TO BE FILED (HEREINAFTER R EFERRED TO AS 'DISPUTED ISSUES'). HOWEVER THE TAX WILL NOT INCLUDE ANY INTEREST THERE ON, EXCEPT WHERE CHARGEABILITY OF INTEREST ITSELF IS IN DISPUTE. IN CASE THE CHARG EABILITY OF INTEREST IS THE ISSUE UNDER DISPUTE, THE AMOUNT OF INTEREST SHALL BE THE TAX EFFECT. IN CASES WHERE RETURNED LOSS IS REDUCED OR ASSESSED AS INCOME, THE TAX EFFECT WOULD INCLUDE NOTIONAL TAX ON DISPUTED ADDITIONS. IN CASE OF PENA LTY ORDERS, THE TAX EFFECT WILL MEAN QUANTUM OF PENALTY DELETED OR REDUCED IN THE O RDER TO BE APPEALED AGAINST. 5. THE ASSESSING OFFICER SHALL CALCULATE THE TAX EFFEC T SEPARATELY FOR EVERY ASSESSMENT YEAR IN RESPECT OF THE DISPUTED ISSUES I N THE CASE OF EVERY ASSESSEE. IF, IN THE CASE OF AN ASSESSEE, THE DISPUTED ISSUES ARISE IN MORE THAN ONE ASSESSMENT YEAR, APPEAL, CAN BE FILED IN RESPECT OF SUCH ASSESSMENT YEAR OR YEARS IN WHICH THE TAX EFFECT IN RESPECT OF THE DIS PUTED 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 OTHER WORDS, HENCEFORTH, AP PEALS CAN BE FILED ONLY WITH REFERENCE TO THE TAX EFFECT IN THE RELEVANT ASSESSM ENT 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), IF IT IS DECIDED TO FILE APPEAL IN RESPECT OF THE YEAR(S) IN WHICH 'TAX EFFECT' EXCEEDS THE MONETARY LIMIT PRESCRIBED. IN CASE WHERE A COMPOSIT E ORDER/JUDGMENT INVOLVES MORE THAN ONE ASSESSEE, EACH ASSESSEE SHALL BE DEAL T WITH SEPARATELY. 6. IN A CASE WHERE APPEAL BEFORE A TRIBUNAL OR A COURT IS NOT FILED ONLY ON ACCOUNT OF THE TAX EFFECT BEING LESS THAN THE MONET ARY LIMIT SPECIFIED ABOVE, THE COMMISSIONER OF INCOME-TAX SHALL SPECIFICALLY RECOR D THAT 'EVEN THOUGH THE DECISION IS NOT ACCEPTABLE, APPEAL IS NOT BEING FIL ED ONLY ON THE CONSIDERATION THAT THE TAX EFFECT IS LESS THAN THE MONETARY LIMIT SPEC IFIED IN THIS INSTRUCTION'. FURTHER, IN SUCH CASES, THERE WILL BE NO PRESUMPTION THAT TH E INCOME-TAX DEPARTMENT HAS ACQUIESCED IN THE DECISION ON THE DISPUTED ISSUES. THE INCOME-TAX DEPARTMENT SHALL NOT BE PRECLUDED FROM FILING AN APPEAL AGAINS T THE DISPUTED ISSUES IN THE 4 CASE OF THE 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 EXCEEDS THE SPECIFIED MONETARY LIMITS. 7. IN THE PAST, A NUMBER OF INSTANCES HAVE COME TO THE NOTICE OF THE BOARD, WHEREBY AN ASSESSEE HAS CLAIMED RELIEF FROM THE TRI BUNAL OR THE COURT ONLY ON THE GROUND THAT THE DEPARTMENT HAS IMPLICITLY ACCEP TED THE DECISION OF THE TRIBUNAL OR COURT IN THE CASE OF THE ASSESSEE FOR A NY OTHER ASSESSMENT YEAR OR IN THE CASE OF ANY OTHER ASSESSEE FOR THE SAME OR ANY OTHER ASSESSMENT YEAR, BY NOT FILING AN APPEAL ON THE SAME DISPUTED ISSUES. T HE DEPARTMENTAL REPRESENTATIVES/COUNSELS MUST MAKE EVERY EFFORT TO BRING TO THE NOTICE OF THE TRIBUNAL OR THE COURT THAT THE APPEAL IN SUCH CASES WAS NOT FILED OR NOT ADMITTED ONLY FOR THE REASON OF THE TAX EFFECT BEING LESS TH AN THE SPECIFIED MONETARY LIMIT AND, THEREFORE, NO INFERENCE SHOULD BE DRAWN THAT T HE DECISIONS RENDERED THEREIN WERE ACCEPTABLE TO THE DEPARTMENT. ACCORDINGLY, THE Y SHOULD IMPRESS UPON THE TRIBUNAL OR THE COURT THAT SUCH CASES DO NOT HAVE A NY PRECEDENT VALUE. AS THE EVIDENCE OF NOT FILING APPEAL DUE TO THIS INSTRUCTI ON MAY HAVE 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 ISSUES SHOULD BE CONTESTED ON MERITS NOTWITHSTANDING THAT THE TAX EFFECT 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 PROVISI ONS OF AN ACT OR RULE ARE UNDER CHALLENGE, OR B. WHERE BOARD'S ORDER, NOTIFICATION, INSTRUCTION O R CIRCULAR HAS BEEN HELD TO BE ILLEGAL OR ULTRA VIRES, OR C. WHERE REVENUE AUDIT OBJECTION IN THE CASE HAS B EEN ACCEPTED BY THE DEPARTMENT. 9. THE PROPOSAL FOR FILING SPECIAL LEAVE PETITION UNDE R ARTICLE 136 OF THE CONSTITUTION BEFORE THE SUPREME COURT SHOULD, IN AL L CASES, BE SENT TO THE DIRECTORATE OF INCOME-TAX (LEGAL & RESEARCH), NEW D ELHI AND THE DECISION TO FILE SPECIAL LEAVE PETITION SHALL BE IN CONSULTATION WIT H THE MINISTRY OF LAW AND JUSTICE. 10. THE MONETARY LIMITS SPECIFIED IN PARA 3 ABOVE SHALL NOT APPLY TO WRIT MATTERS AND DIRECT TAX MATTERS OTHER THAN INCOME-TAX, FILIN G OF APPEALS IN OTHER DIRECT TAX MATTERS SHALL CONTINUE TO BE GOVERNED BY RELEVANT P ROVISIONS OF STATUTE AND RULES. FURTHER, FILING OF APPEAL IN CASES OF INCOME-TAX, W HERE THE TAX EFFECT IS NOT QUANTIFIABLE OR NOT INVOLVED, SUCH AS THE CASE OF R EGISTRATION OF TRUSTS OR INSTITUTIONS UNDER SECTION 12A OF THE IT ACT, 1961, SHALL NOT BE GOVERNED BY THE LIMITS SPECIFIED IN PARA 3 ABOVE AND DECISION TO FI LE APPEAL IN SUCH CASES MAY BE TAKEN ON MERITS OF A PARTICULAR CASE. 11. THIS INSTRUCTION WILL APPLY TO APPEALS FILED ON OR AFTER FEBRUARY, 09, 2011. HOWEVER, THE CASES WHERE APPEALS HAVE BEEN FILED BE FORE FEBRUARY 09, 2011 WILL 5 BE GOVERNED BY THE INSTRUCTIONS ON THIS SUBJECT, OP ERATIVE AT THE TIME WHEN SUCH APPEAL WAS FILED. 12. THIS ISSUES UNDER SECTION 268(1) OF THE INCOME TAX ACT, 1961. 4. ON QUERY FROM THE BENCH, THE LD. DR COULD NOT PO INT OUT ANY OF THE EXCEPTIONS AS PROVIDED IN THE CIRCULAR AS UNDER: (A) THAT THIS IS A LOSS CASE HAVING TAX EFFECT MOR E THAN THE PRESCRIBED LIMIT, WHICH SHOULD BE TAKEN INTO ACCOUNT, (B) THAT THIS IS A COMPOSITE ORDER FOR MANY ASSESSM ENT YEARS WHERE TAX EFFECT WILL BE MORE THAN THE PRESCRIBED LIMIT AS PER PARA 5 OF ABOVE INSTRUCTIONS, (C) THAT THERE IS OTHER YEAR PENDING AS DISPUTED O N THE SINGULAR ISSUE, (D) THAT IN THE CASE OF REVENUE, WHERE CONSTITUTION AL VALIDITY OF THE PROVISIONS OF THE ACT OR I.T. RULES 1962 ARE UNDER CHALLENGE, (E) THAT BOARDS ORDER, NOTIFICATION, INSTRUCTION O R CIRCULAR HAS BEEN HELD TO BE ILLEGAL OR ULTRA VIRES, (F) THAT REVENUE AUDIT OBJECTION IN THE CASE HAS BE EN ACCEPTED BY THE DEPARTMENT AND THE SAME IS UNDER CHALLENGE. THE LD. DR COULD NOT POINT OUT ANY OF THE EXCEPTION S AS PROVIDED ABOVE. ACCORDINGLY, THIS BEING A TAX EFFECT CASE, WE DISMI SS THE APPEAL OF THE REVENUE IN LIMINE WITHOUT GOING INTO MERITS AND AS UNADMITTED. 5. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. SD/- SD/- ( . . ) ! ( , ) (C.D. RAO) ACCOUNTANT MEMBER (MAHAVIR SINGH) JUDICIAL MEMBER ( ! ! ! ! ) DATE: 01 -02-2012 0 + )1 2 1%3 - COPY OF THE ORDER FORWARDED TO: 1. /APPLICANT : I.T.O., WARD-55(1), KILKATA 2 )*'( / THE RESPONDENT : PASHUPATI TRADERS, 43, RAFI AH MED KIDWAI ROAD, KOL-16 3. 0# ( ) : THE CIT(A)-XXXVI, KOLKATA. 4. 0# / THE CIT, KOL - 5 . 45 )# / DR, ITAT, KOLKATA BENCHES, KOLKATA *1 ) / TRUE COPY, 0#- / BY ORDER, (DKP) ASSTT. REGISTRAR .