ACIT Central Circle 3(2) , CHENNAI V. CMG Steels Pvt. Ltd. , CHENNAI

ITA 1987/CHNY/2017

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 2702 (ITAT-CHENNAI)
• Duration Of Justice: 2 year(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-08-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2013-2014
• Appeal Filed On: 14-08-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S BHARATH
• Assessee Lawyers: T BANUSEKAR
• Keywords: Tax effect

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH: CHENNAI , !' , # $ BEFORE SHRI GEORGE MATHAN , JUDICIAL MEMBER AND SHRI S JAYARAMAN, ACCOUNTANT MEMBER ' ./ ITA NO.1986/CHNY/2017 (C.O NO.156/CHNY/2017) & ' ./ ITA NO.1987/CHNY/2017 (C.O NO.157/CHNY/2017) !% /ASSESSMENT YEARS: 2012-13 & 2013-14 THE ASST. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-3(2), CHENNAI. VS. M/S. CMG STEELS PVT. LTD., NO.8, ELANTHANUR, PONNERI HIGH ROAD, CHENNAI 600 103. [ PAN: AADCC 7579C ] ( & /APPELLANT) ( '(& /RESPONDENT) & ) * / APPELLANT BY : MR. S. BHARATH, CIT '(& ) * /RESPONDENT BY : MR. T. BANUSEKAR, C.A + ! ) ,# /DATE OF HEARING : 27.08.2019 -.% ) ,# /DATE OF PRONOUNCEMENT : 27.08.2019 / / O R D E R PER BENCH : THESE TWO APPEALS AND CROSS OBJECTIONS PERTAIN TO THE APPEALS ARE FILED BY THE REVENUE AND THE ASSESSEE AGAINST THE C OMMON ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-19, CHENNAI, I N ITA NO.12, 13 & ITA NOS.1986 & 1987/CHNY/2017 & C.O NOS.156 & 157/CHNY/2017 :- 2 -: 9/15-16 DATED 18.05.2017 FOR ASSESSMENT YEARS 2012- 13 & 2013-14. THE CROSS OBJECTIONS TAKEN UP FOR HEARING ARE ONLY SUCH CROSS OBJECTIONS AS EMANATE FROM THESE APPEALS AND ARE BROADLY IN SUPPO RT OF THE ORDERS PASSED BY THE COMMISSIONER (APPEALS). 2. MR. S.BHARATH, CIT REPRESENTED ON BEHALF OF THE REVENUE AND MR.T. BANUSEKAR, C.A REPRESENTED ON BEHALF OF THE ASSESSE E. 3. THE LEARNED COUNSEL FOR THE REVENUE AND THE ASSE SSEE FAIRLY CONCEDED BEFORE US THAT THE TAX EFFECT INVOLVED IN THIS APPEAL DOES NOT EXCEED RS.50 /- LAKHS. 4. VIDE CBDT CIRCULAR NO.17/2019 IN F.NO.279/MISC. 142/2007-ITJ(PT) DATED 8TH AUGUST, 2019, THE INCOME TAX DEPARTMENT H AS FURTHER LIBERALIZED ITS POLICY FOR NOT FILING APPEALS AGAINST THE DECIS IONS OF THE APPELLATE AUTHORITIES IN FAVOUR OF THE TAXPAYERS, WHEREIN TAX INVOLVED IS BELOW CERTAIN THRESHOLD LIMITS, AND ANNOUNCED ITS POLICY DECISION NOT TO FILE, OR PRESS, THE APPEALS, BEFORE THIS TRIBUNAL, AGAINST T HE APPELLATE ORDERS FAVOURABLE TO THE ASSESSEE IN THE CASES IN WHICH OV ERALL TAX EFFECT, EXCLUDING INTEREST EXCEPT WHEN INTEREST ITSELF IS I N DISPUTE, IS RS 50,00,000/- OR LESS. 5. IN VIEW OF THE ABOVE FACTUAL BACKGROUND AND THE CONCESSION BY THIS CBDT CIRCULAR, THESE APPEALS FILED BY THE REVENUE M UST BE DISMISSED AS ITA NOS.1986 & 1987/CHNY/2017 & C.O NOS.156 & 157/CHNY/2017 :- 3 -: WITHDRAWN AND THE CROSS OBJECTIONS FILED BY THE ASS ESSEE ARE ALSO DISMISSED AS INFRUCTUOUS. 6. THIS CIRCULAR, ONLY ENHANCES THE MONETARY LIMIT S AND GIVES FURTHER RELAXATION. THE OLD CIRCULAR, BEYOND ANY DISPUTE OR CONTROVERSY, CATEGORICALLY APPLIED TO THE PENDING APPEALS AS ON THE DATE OF ISSUANCE OF CIRCULAR. 7. THE CIRCULAR DATED 8TH AUGUST 2019 IS NOT A STA NDALONE CIRCULAR. IT IS TO BE READ IN CONJUNCTION WITH THE CBDT CIRCULAR NO . 3/2018 (AND SUBSEQUENT AMENDMENT THERETO), AND ALL IT DOES IS T O REPLACE PARAGRAPH NOS. 3 AND 5 OF THE SAID CIRCULAR. THIS IS EVIDENT FROM THE FOLLOWING EXTRACTS FROM THE CIRCULAR DATED 8 TH AUGUST 2019: 2. AS A STEP TOWARDS FURTHER MANAGEMENT OF LITIGAT ION. IT HAS BEEN DECIDED BY THE BOARD THAT MONETARY LIMITS FOR FILING OF APP EALS IN INCOME-TAX CASES BE ENHANCED FURTHER THROUGH AMENDMENT IN PARA 3 OF THE CIRCULAR MENTIONED ABOVE AND ACCORDINGLY, THE TABLE FOR MONE TARY LIMITS SPECIFIED IN PARA 3 OF THE CIRCULAR SHALL READ AS FOLLOWS: SL. NO APPEALS/SLPS IN INCOME-TAX MATTERS MONETARY LIMIT (RS.) 1 BEFORE APPELLATE TRIBUNAL 50,00,000 2 BEFORE HIGH COURT 1,00,00,000 3 BEFORE SUPREME COURT 2,00,00,000 3. FURTHER, WITH A VIEW TO PROVIDE PARITY IN FILING OF APPEALS IN SCENARIOS WHERE SEPARATE ORDER IS PASSED BY HIGHER APPELLATE AUTHORITIES FOR EACH ASSESSMENT YEAR VIS-A-VIS WHERE COMPOSITE ORDER FOR MORE THAN ONE ITA NOS.1986 & 1987/CHNY/2017 & C.O NOS.156 & 157/CHNY/2017 :- 4 -: ASSESSMENT YEARS IS PASSED. PARA 5 OF THE CIRCULAR IS SUBSTITUTED BY THE FOLLOWING PARA: 5. THE ASSESSING OFFICER SHALL CALCULATE THE TAX E FFECT SEPARATELY FOR EVERY ASSESSMENT YEAR IN RESPECT OF THE DISPUTED ISSUES I N THE CASE OF EVERYASSESSEE. IF IN THE CASE OF AN ASSESSEE, THE DISPUTED ISSUES ARI SE IN MORE THAN ONE ASSESSMENT YEAR, APPEAL CAN BE FILED IN RESPECT OF SUCH ASSESS MENT YEAR OR YEARS IN WHICH THE TAX EFFECT IN RESPECT OF THE DISPUTED ISSUES EXCEED S THE MONETARY LIMIT SPECIFIED IN PARA 3. NO APPEAL SHALL BE FILED IN RESPECT OF AN A SSESSMENT YEAR OR YEARS IN WHICH THE TAX EFFECT IS LESS THAN THE MONETARY LIMIT SPEC IFIED IN PARA-3. FURTHER, EVEN IN THE CASE OF COMPOSITE ORDER OF ANY HIGH COURT OR AP PELLATE AUTHORITY WHICH INVOLVES MORE THAN ONE ASSESSMENT YEAR AND COMMON I SSUES IN MORE THAN ONE ASSESSMENT YEAR NO APPEAL SHALL BE FILED IN RESPECT OF AN ASSESSMENT YEAR OR YEARS IN WHICH THE TAX EFFECT IS LESS THAN THE MONETARY L IMIT SPECIFIED IN PARA 3. IN CASE WHERE A COMPOSITE ORDER/ JUDGEMENT INVOLVES MORE TH AN ONE ASSESSEE, EACH ASSESSEE SHALL BE DEALT WITH SEPARATELY 4. THE SAID MODIFICATIONS SHALL COME INTO EFFECT FR OM THE DATE OF ISSUE OF THIS CIRCULAR. 8. CLEARLY, ALL OTHER PORTIONS OF THE CIRCULAR NO. 3 OF 2018 (SUPRA) HAVE REMAINED INTACT. THE PORTION WHICH HAS REMAINED INT ACT INCLUDES PARAGRAPH 13 OF THE AFORESAID CIRCULAR WHICH IS AS FOLLOWS: 13. THIS CIRCULAR WILL APPLY TO SLPS/ APPEALS/ CROS S OBJECTIONS/ REFERENCES TO BE FILED HENCEFORTH IN SC/HCS/TRIBUNAL AND IT SH ALL ALSO APPLY RETROSPECTIVELY TO PENDING SLPS/ APPEALS/ CROSS OBJ ECTIONS/REFERENCES. PENDING APPEALS BELOW THE SPECIFIED TAX LIMITS IN P ARE 3 ABOVE MAY BE WITHDRAWN/ NOT PRESSED . 9. THE HONBLE SUPREME COURT IN THE CASE OF THE CO MMISSIONER OF INCOME TAX-5,NEW DELHI VS. KESHAV POWER LTD., IN SL P NO.21497/2019 DATED 16.08.2019 REPORTED IN 2019(8)TMI 811(SC) HAS ALSO APPLIED THE CIRCULAR NO.17/2019 DATED 08.08.2019 HAS DISMISSED THE APPEAL HOLDING AS FOLLOWS: SINCE THE TAX EFFECT INVOLVED IN THE MATTER IS LESS THAN RS.2/- CRORES, GOING BY THE LATEST CIRCULAR ISSUED BY THE CBDT, WE SEE NO REASON TO INTERFERE IN THIS MATTER. THE SPECIAL LEAVE PETITION IS DISMISSED, LEAVING ALL THE QUESTIONS OF LAW OPEN . ITA NOS.1986 & 1987/CHNY/2017 & C.O NOS.156 & 157/CHNY/2017 :- 5 -: 10. LEARNED COMMISSIONER (DR) SUBMITS LIBERTY MAY KINDLY BE GIVEN TO POINT OUT, UPON NECESSARY FURTHER VERIFICATIONS, AN D TO SEEK RECALL THE DISMISSAL OF APPEAL AND RESTORATION OF THE APPEAL I N THE CASE (I) IN WHICH IT CAN BE DEMONSTRATED THAT THE APPEALS ARE COVERED BY THE EXCEPTIONS, AND (II) WHICH ARE INADVERTENTLY INCLUDED IN THIS BUNCH OF APPEALS, WHEREIN THE TAX EFFECT, IN TERMS OF THE CBDT CIRCULAR (SUPRA), EXCEEDS RS 50,00,000. NONE OPPOSES THIS PRAYER; WE ACCEPT THE SAME. WE MA KE IT CLEAR THAT THE APPELLANTS SHALL BE AT LIBERTY TO POINT OUT THE CAS E WHICH IS WRONGLY INCLUDED IN THE APPEAL SO SUMMARILY DISMISSED, EITH ER OWING TO WRONG COMPUTATION OF TAX EFFECT OR OWNING TO SUCH CASES B EING COVERED BY THE PERMISSIBLE EXCEPTIONS- OR FOR ANY OTHER REASON, AN D WE WILL TAKE APPROPRIATE REMEDIAL STEPS IN THIS REGARD. 11. IN THE CIRCUMSTANCES, RESPECTFULLY FOLLOWING T HE PRINCIPLES LAID DOWN BY THE HONBLE SUPREME COURT IN THE CASE OF THE CO MMISSIONER OF INCOME TAX-5, NEW DELHI VS. KESHAV POWER LTD., REFERRED TO SUPRA AND IN THE LIGHT OF THE ABOVE DISCUSSIONS, BOTH THE APPEALS FILED B Y THE REVENUE ARE FOUND TO BE NON-MAINTAINABLE, AND AS ALL THE RELATED CROS S-OBJECTIONS OF THE ASSESSEE ARISE ONLY AS A RESULT OF THOSE APPEALS AN D MERELY SUPPORT THE ORDER OF THE CIT(A), THE CROSS OBJECTIONS FILED BY THE ASSESSEE ARE ALSO DISMISSED AS INFRUCTUOUS. ITA NOS.1986 & 1987/CHNY/2017 & C.O NOS.156 & 157/CHNY/2017 :- 6 -: 12. IN THE RESULT, BOTH THE APPEALS OF REVENUE STAN DS DISMISSED AS WITHDRAWN AND THE CROSS OBJECTIONS FILED BY THE ASS ESSEE ARE ALSO DISMISSED AS INFRUCTUOUS. ORDER PRONOUNCED IN THE OPEN COURT AFTER CONCLUSIO N OF HEARING ON THE 27 TH AUGUST, 2019 IN CHENNAI. SD/- SD/- ( ) (S. JAYARAMAN) # /ACCOUNTANT MEMBER ( ) (GEORGE MATHAN) /JUDICIAL MEMBER /CHENNAI, 0' /DATED: 27 TH AUGUST, 2019. EDN, SR. PS / ) ',12 32%, /COPY TO: 1. & /APPELLANT 4. + 4, /CIT 2. '(& /RESPONDENT 5. 2!56 ', /DR 3. + 4, ( ) /CIT(A) 6. 69 : /GF