DCIT, Circle - 45, Kolkata V. M/s. Sharda Ice & Refgn. Corporation, Kolkata

ITA 1989/KOL/2009

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 54635 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 11 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-10-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 14-07-2010
• Assessment Year: 2006-2007
• Appeal Filed On: 23-11-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NIHAR DUTTA GUPTA
• Keywords: Audit objection; Tax effect
• Section: 260A; 12A

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH: KOL KATA () BEFORE , /AND , . ! . '# ) [BEFORE SRI MAHAVIR SINGH, JM & SHRI C. D. RAO, AM] $ $ $ $ / I.T.A NO. 1989/KOL/2009 %& '( %& '( %& '( %& '(/ // / ASSESSMENT YEAR: 2006-07 DEPUTY COMMISSIONER OF INCOME-TAX, VS M/S. SHARDA ICE & REFGN CORPORATION CIRCLE-45, KOLKATA PAN: AALFS 8162J (*+ /APPELLANT ) (,-*+/ RESPONDENT ) DATE OF HEARING : 27.10.2011 DATE OF PRONOUNCEMENT: 28.10.2011 FOR THE APPELLANT: SHRI NIHAR DUTTA GUPTA FOR THE RESPONDENT: SHRI SUBASH AGARWAL '. / ORDER PER MAHAVIR SINGH, JM ( , , , , ) THIS APPEAL BY DEPARTMENT IS ARISING OUT OF ORDER O F CIT(A)-XXX, KOLKATA IN APPEAL NO. 134/CIT(A)-XXX/CIRCLE-45/2008-09 DATED 02.09.20 09. ASSESSMENT WAS FRAMED BY DCIT, CIRCLE-45, KOLKATA U/S.143(3) OF THE ACT, 1961 FOR ASSESSMENT YEAR 2006-07 VIDE HIS ORDER DATED 28.11.2008. 2. AT THE OUTSET, IT WAS INFORMED BY LD. COUNSEL FOR T HE ASSESSEE THAT TAX EFFECT IN THIS APPEAL IS BELOW THE PRESCRIBED MONETARY LIMITS FOR FILING OF APPEALS BEFORE ITAT AND OTHER SUPERIOR COURTS. IT SEEMS THAT THE REVENUES APPEA L, THE QUANTUM INVOLVED IS RS.7,29,512/- ON WHICH TAX EFFECT WILL BE RS.2,45,554/-. THE ONLY IS SUE NOW REMAINS 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 MONETARY LIMI TS FOR FILING OF APPEALS BY THE DEPARTMENT BEFORE ITAT AND OTHER SUPERIOR COURTS. THE APPEAL RELATES TO ASSESSMENT YEAR 2006-07 AND FILED BEFORE THE TRIBUNAL ON 23.11.2009. SINCE THI S APPEAL FILED ON 23.11.2009, THE SAME WILL BE COVERED BY INSTRUCTION NO. 3/2011 ISSUED ON 09.0 2.2011 I.E. THE REVISED MONETARY LIMIT 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 C LUB IN ITA NO.128/2008 DATED 03.03.2011 HAS HELD AS UNDER: THE TAX EFFECT INVOLVED IN THE PRESENT APPEAL IS R S.4,65,860/-. AS PER THE RECENT GUIDELINES OF THE CBDT, APPEAL IN THOSE CASES WHERE THE TAX EFFECT IS LESS THAN 10 LACS, ARE NOT TO BE ENTERTAINED. 2 ITA 1989/K/20 0 9 M/S. SHARDA ICE & REFGN. CORPN. A.Y. 06-07 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 PENDING APP EALS. 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 DEPARTMENTAL APPEAL S (IN INCOME-TAX MATTERS) BEFORE APPELLATE TRIBUNAL, HIGH COURTS AND SUPREME COURT WERE SPECIF IED. 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 TRI BUNAL, HIGH COURTS AND SUPREME COURT KEEPING IN VIEW THE MONETARY LIMITS AND CONDITIONS SPECIFIE D BELOW. 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 10,00,0 00 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 CHARGEABLE HAD SUC H TOTAL INCOME BEEN REDUCED BY THE AMOUNT OF INCOME IN RESPECT OF THE ISSUES AGAINST WHICH APPEA L IS INTENDED TO BE FILED (HEREINAFTER REFERRED TO AS 'DISPUTED ISSUES'). HOWEVER THE TAX WILL NOT INC LUDE ANY INTEREST THEREON, EXCEPT WHERE CHARGEABILITY OF INTEREST ITSELF IS IN DISPUTE. IN CASE THE CHARGEABILITY OF INTEREST IS THE ISSUE UND ER DISPUTE, THE AMOUNT OF INTEREST SHALL BE THE TAX EF FECT. IN CASES WHERE RETURNED 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 EFFECT WILL MEAN QUANTUM OF PENALTY DELETED OR REDUCED IN THE ORDER 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 IN THE CASE OF EVERY ASSESSEE. IF, IN THE CASE OF AN ASSESSEE, THE DISPUTED ISSUES ARISE IN MORE THAN ONE ASSESSMENT Y EAR, APPEAL, CAN BE FILED IN RESPECT 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 MONE TARY LIMIT SPECIFIED IN PARA 3. IN OTHER WORDS, HENCEFORTH, APPEALS CAN BE FILED ONLY WITH REFERENC E TO THE TAX EFFECT IN THE RELEVANT ASSESSMENT YEAR. HOWEVER, IN CASE OF A COMPOSITE ORDER OF ANY HIGH COURT OR APPELLATE AUTHORITY, WHICH INVOLVES MORE THAN ONE ASSESSMENT YEAR AND COMMON I SSUES IN MORE THAN ONE ASSESSMENT YEAR, APPEAL SHALL BE FILED IN RESPECT OF ALL SUCH ASSESS MENT YEARS EVEN IF THE 'TAX EFFECT' IS LESS THAN TH E 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 EFFECT' EXCEEDS THE MONETARY LIMIT PRESCRIBED. IN CASE WHERE A COMPOSITE ORDER/JUDGMENT INVOLVES MORE THAN ONE ASSESSEE, EAC H ASSESSEE SHALL BE DEALT WITH SEPARATELY. 3 ITA 1989/K/20 0 9 M/S. SHARDA ICE & REFGN. CORPN. A.Y. 06-07 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 MONETARY LIMIT SPECIFIED ABOVE, THE COMMISSIONER OF INCOME-TAX SHALL SPECIFICALLY RECORD THAT 'EVEN THOUGH THE DECISION IS NOT ACCEPTABLE, APPEAL IS NOT BEING FILED ONLY ON THE CONSIDERATION THAT THE TAX EFFECT IS LESS TH AN THE MONETARY LIMIT SPECIFIED IN THIS INSTRUCTION '. FURTHER, IN SUCH CASES, THERE WILL BE NO PRESUMPTIO N THAT THE INCOME-TAX DEPARTMENT HAS ACQUIESCED IN THE DECISION ON THE DISPUTED ISSUES. THE INCOME-TAX DEPARTMENT SHALL NOT BE PRECLUDED FROM FILING AN APPEAL AGAINST THE DISPUTE D ISSUES IN THE 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 MONET ARY 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 TRIBUNAL OR THE COURT O NLY ON THE GROUND THAT THE DEPARTMENT HAS IMPLICITLY ACCEPTED THE DECISION OF THE TRIBUNAL OR COURT IN THE CASE OF THE 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 THE SAME DISPUTED ISSUES. T HE DEPARTMENTAL REPRESENTATIVES/COUNSELS MUST MAKE EVERY EFFORT TO BRING TO THE NOTICE OF THE TRI BUNAL OR THE COURT THAT THE APPEAL IN SUCH CASES WAS NOT FILED OR NOT ADMITTED ONLY FOR THE REASON O F THE TAX EFFECT BEING LESS THAN THE SPECIFIED MONETARY LIMIT AND, THEREFORE, NO INFERENCE SHOULD BE DRAWN THAT THE 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 ANY PRECEDENT VAL UE. AS THE EVIDENCE OF NOT FILING APPEAL DUE TO THIS INSTRUCTION MAY HAVE TO BE PRODUCED IN COURTS, THE JUDICIAL FOLDERS IN THE OFFICE OF CIT MUST 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 LES S 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 BOARD'S 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. 9. THE PROPOSAL FOR FILING SPECIAL LEAVE PETITION UNDE R ARTICLE 136 OF THE CONSTITUTION BEFORE THE SUPREME COURT SHOULD, IN ALL CASES, BE SENT TO THE DIRECTORATE OF INCOME-TAX (LEGAL & RESEARCH), NEW DELHI AND THE DECISION TO FILE SPECIAL LEAVE PE TITION SHALL BE IN CONSULTATION WITH 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, FILING OF APPEALS IN OTHER DIRECT TAX MATTERS SHALL CONTINUE TO BE GOVERNED BY RELEVANT PROVISIONS OF STATUTE AND RULE S. FURTHER, FILING OF APPEAL IN CASES OF INCOME- TAX, WHERE THE TAX EFFECT IS NOT QUANTIFIABLE OR NO T INVOLVED, SUCH AS THE CASE OF REGISTRATION OF TRU STS OR INSTITUTIONS UNDER SECTION 12A OF THE IT ACT, 19 61, SHALL NOT BE GOVERNED BY THE LIMITS SPECIFIED IN PARA 3 ABOVE AND DECISION TO FILE APPEAL IN SUCH CASES MAY BE TAKEN ON MERITS OF A PARTICULAR CASE. 11. THIS INSTRUCTION WILL APPLY TO APPEALS FILED ON OR AFTER 09.02.2011. HOWEVER, THE CASES WHERE APPEALS HAVE BEEN FILED BEFORE 09.02.2011 WILL BE G OVERNED BY THE INSTRUCTIONS ON THIS SUBJECT, OPERATIVE 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: 4 ITA 1989/K/20 0 9 M/S. SHARDA ICE & REFGN. CORPN. A.Y. 06-07 (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 ASSESS MENT YEARS WHERE TAX EFFECT WILL BE MORE THAN THE PRESCRIBED LIMIT AS PER PARA 5 OF A BOVE INSTRUCTIONS, (C) THAT THERE IS OTHER YEAR PENDING AS DISPUTED O N THE SINGULAR ISSUE, (D) THAT IN THE CASE OF REVENUE, WHERE CONSTITUTIO NAL VALIDITY OF THE PROVISIONS OF THE ACT OR I.T. RULES 1962 ARE UNDER CHALLENGE , (E) THAT BOARDS ORDER, NOTIFICATION, INSTRUCTION OR CIRCULAR HAS BEEN HELD TO BE ILLEGAL OR ULTRA VIRES, (F) THAT REVENUE AUDIT OBJECTION IN THE CASE HAS BEEN A CCEPTED 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 DISMISS THE APPEAL OF T HE REVENUE IN LIMINE WITHOUT GOING INTO MERITS AND AS UNADMITTED. 5. IN THE RESULT, APPEAL OF REVENUE IS DISMISSED. 6. ORDER PRONOUNCED IN OPEN COURT ON 28.10.2011. SD/- SD/- . ! ! ! ! . '# , (C. D. RAO) (MAHAVIR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER ( !# !# !# !#) )) ) DATED :28TH OCTOBER, 2011 /0 %12 3 JD.(SR.P.S.) '. 4 ,5 6'5'7- COPY OF THE ORDER FORWARDED TO: 1 . *+ / APPELLANT DCIT, CIR-45, KOLKATA. 2 ,-*+ / RESPONDENT M/S. SHARDA ICE & REFRGN. CORPN, 7/2 , BABULAL LANE, KOLKATA-700 007. 3 . .% ( )/ THE CIT(A), KOLKATA 4. 5. .% / CIT KOLKATA 5 => ,% / DR, KOLKATA BENCHES, KOLKATA -5 ,/ TRUE COPY, '.%?/ BY ORDER, 2 /ASSTT. REGISTRAR .