ITO, Ward 29(2), V. Renu Gupta,

ITA 2053/DEL/2007

• Counselvise Citation: [2016] 121 COUNSELVISE.COM (IT) 2709 (ITAT-DELHI)
• Duration Of Justice: 8 year(s) 8 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-01-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Next Hearing Date: 30-12-2015
• Assessment Year: 1998-1999
• Appeal Filed On: 24-04-2007
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KESANG Y SHERPA
• Keywords: Audit objection; Tax effect
• Section: 12A

Judgement Text

ITA NO. 2053/DEL/2007 CO. NO. 249/DEL/2007 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH F, NEW DELHI BEFORE SHRI N. K. SAINI, AM AND SHRI KULDIP SINGH JM ITA NO. 2053/DEL/2007 : ASS TT. YEAR : 1998-99 ITO, WARD 29(2) NEW DELHI VS SMT. RENU GUPTA, 133, TILAK BAZAR, DELHI (APPELLANT) (RESPONDENT) CO. NO. 249/DEL/2007 : A SSTT. YEAR : 1998-99 SMT. RENU GUPTA, 133, TILAK BAZAR, DELHI VS ITO, WARD 29(2) NEW DELHI (APPELLANT) (RESPONDENT) PAN NO. AAVPG9395F ASSESSEE BY : SH. PRATAP GUPTA, CA REVENUE BY : SMT. KESANG Y. SHERPA, SR. DR. DATE OF HEARING : 30.12.2015 DATE OF PRONOUNCEMENT : 04.01.2016 ORDER PER N.K. SAINI, A.M. 1. THE APPEAL BY THE DEPARTMENT AND CROSS OBJECTION BY THE ASSESSEE ARE DIRECTED AGAINST THE ORDER DATED 01.02 .2007 OF THE CIT(A)-XXV, NEW DELHI 2. IN THE DEPARTMENTAL APPEAL THE ONLY ISSUE RELATE S TO THE DELETION OF ADDITION OF RS. 24,38,137/- MADE BY THE AO ON ACCOUNT OF ACCOMMODATION ENTRY. ITA NO. 2053/DEL/2007 CO. NO. 249/DEL/2007 3. DURING THE COURSE OF HEARING, THE LD. COUNSEL FO R THE ASSESSEE AT THE VERY OUTSET STATED THAT THE TAX EFFECT IN TH E DEPARTMENTAL APPEAL IS LESS THAN RS. 10 LACS. THEREFORE, IN VIE W OF THE CBDTS LATEST CIRCULAR NO. 21/2015 DATED 10/12/2015, THE D EPARTMENTAL APPEAL IS NOT MAINTAINABLE AND SHOULD BE DISMISSED ACCORDINGLY. 4. ON THE OTHER HAND, THE LD. D.R., ALTHOUGH SUPPOR TED THE ORDER OF THE ASSESSING OFFICER, BUT COULD NOT CONTROVERT THIS FACT THAT TAX EFFECT IN THIS APPEAL IS LESS THAN RS.10,00,000/-. 5. AFTER CONSIDERING THE SUBMISSIONS OF BOTH THE PA RTIES AND THE MATERIAL ON RECORD, IT IS NOTICED THAT SECTION 268A HAS BEEN INSERTED BY THE FINANCE ACT, 2008 WITH RETROSPECTIV E EFFECT FROM 01/04/99. THE PROVISIONS CONTAINED IN SECTION 268A READ AS UNDER: 268A. (1) THE BOARD MAY, FROM TIME TO TIME, ISSUE ORDERS, INSTRUCTIONS OR DIRECTIONS TO OTHER INCOME- TAX AUTHORITIES, FIXING SUCH MONETARY LIMITS AS IT MAY DEEM FIT, FOR THE PURPOSE OF REGULATING FILING OF APPEAL OR APPLICATION FOR REFERENCE BY ANY INCOME-TAX AUTHORI TY UNDER THE PROVISIONS OF THIS CHAPTER. (2) WHERE, IN PURSUANCE OF THE ORDERS, INSTRUCTIONS OR DIRECTIONS ISSUED UNDER SUB-SECTION (1), AN INCOME- TAX AUTHORITY HAS NOT FILED ANY APPEAL OR APPLICATION F OR REFERENCE ON ANY ISSUE IN THE CASE OF AN ASSESSEE F OR ANY ASSESSMENT YEAR, IT SHALL NOT PRECLUDE SUCH AUTHORI TY FROM FILING AN APPEAL OR APPLICATION FOR REFERENCE ON THE SAME ISSUE IN THE CASE OF (A) THE SAME ASSESSEE FOR ANY OTHER ASSESSMENT YEAR ; OR ITA NO. 2053/DEL/2007 CO. NO. 249/DEL/2007 (B) ANY OTHER ASSESSEE FOR THE SAME OR ANY OTHER ASSESSMENT YEAR. (3) NOTWITHSTANDING THAT NO APPEAL OR APPLICATION F OR REFERENCE HAS BEEN FILED BY AN INCOME-TAX AUTHORITY PURSUANT TO THE ORDERS OR INSTRUCTIONS OR DIRECTION S ISSUED UNDER SUB-SECTION (1), IT SHALL NOT BE LAWFU L FOR AN ASSESSEE, BEING A PARTY IN ANY APPEAL OR REFERENCE, TO CONTEND THAT THE INCOME-TAX AUTHORITY HAS ACQUIESCE D IN THE DECISION ON THE DISPUTED ISSUE BY NOT FILING AN APPEAL OR APPLICATION FOR REFERENCE IN ANY CASE. (4) THE APPELLATE TRIBUNAL OR COURT, HEARING SUCH A PPEAL OR REFERENCE, SHALL HAVE REGARD TO THE ORDERS, INSTRUCTIONS OR DIRECTIONS ISSUED UNDER SUB-SECTION (1) AND THE CIRCUMSTANCES UNDER WHICH SUCH APPEAL OR APPLICATION FOR REFERENCE WAS FILED OR NOT FILED IN RESPECT OF ANY CASE. (5) EVERY ORDER, INSTRUCTION OR DIRECTION WHICH HAS BEEN ISSUED BY THE BOARD FIXING MONETARY LIMITS FOR FILI NG AN APPEAL OR APPLICATION FOR REFERENCE SHALL BE DEEMED TO HAVE BEEN ISSUED UNDER SUB-SECTION (1) AND THE PROVISIONS OF SUB-SECTIONS (2), (3) AND (4) SHALL A PPLY ACCORDINGLY.] 6. IT IS NOT IN DISPUTE THAT THE BOARDS INSTRUCTIO N OR DIRECTIONS ISSUED TO THE OTHER INCOME-TAX AUTHORITIES ARE BIND ING ON THOSE AUTHORITIES, THEREFORE, THE DEPARTMENT OUGHT NOT TO HAVE FILED THE APPEAL IN VIEW OF THE ABOVE MENTIONED SECTION 268A SINCE THE TAX EFFECT IN THE INSTANT CASE IS LESS THAN THE AMOUNT PRESCRIBED FOR NOT FILING THE APPEAL. ITA NO. 2053/DEL/2007 CO. NO. 249/DEL/2007 7. IT IS NOTICED THAT THE CBDT HAS ISSUED CIRCULAR NO.21 OF 2015 DATED 10.12.2015, VIDE WHICH IT HAS REVISED THE MON ETARY LIMIT TO RS.10,00,000/- FOR NOT FILING THE APPEAL BEFORE TH E TRIBUNAL. THE SAID CIRCULAR READ AS UNDER: SUBJECT : REVISION OF MONETARY LIMITS FOR FI LING OF APPEALS BY THE DEPARTMENT BEFORE INCOME TAX APPEL LATE TRIBUNAL AND HIGH COURTS AND SLP BEFORE SUPREME COU RT MEASURES FOR REDUCING LITIGATION REG. REFERENCE IS INVITED TO BOARDS INSTRUCTION NO 5/20 14 DATED 10.07.2014 WHEREIN MONETARY LIMITS AND OTHER CONDIT IONS FOR FILING DEPARTMENTAL APPEALS (IN INCOME-TAX MATT ERS) BEFORE APPELLATE TRIBUNAL AND HIGH COURTS AND SLP B EFORE THE SUPREME COURT WERE SPECIFIED. 2. IN SUPERSESSION OF THE ABOVE INSTRUCTION, IT HAS BEEN DECIDED BY THE BOARD THAT DEPARTMENTAL APPEALS MAY BE FILED ON MERITS BEFORE APPELLATE TRIBUNAL AND HIGH COURTS AND SLP BEFORE THE SUPREME COURT KEEPING IN VIEW TH E MONETARY LIMITS AND CONDITIONS SPECIFIED BELOW. 3. HENCEFORTH, APPEALS/ SLPS SHALL NOT BE FILED IN CASES WHERE THE TAX EFFECT DOES NOT EXCEED THE MONETARY L IMITS GIVEN HEREUNDER: S. NO APPEALS IN INCOME -TAX MATTER 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 MONETA RY LIMITS PRESCRIBED ABOVE. FILING OF APPEAL IN SUCH CASES IS TO BE DECIDED ON MERITS OF THE CASE. ITA NO. 2053/DEL/2007 CO. NO. 249/DEL/2007 4. FOR THIS PURPOSE, TAX EFFECT MEANS THE DIFFERE NCE BETWEEN THE TAX ON THE TOTAL INCOME ASSESSED AND TH E TAX THAT WOULD HAVE BEEN CHARGEABLE HAD SUCH TOTAL INCO ME BEEN REDUCED BY THE AMOUNT OF INCOME IN RESPECT OF THE ISSUES AGAINST WHICH APPEAL IS INTENDED TO BE FILED (HEREINAFTER REFERRED TO AS DISPUTED ISSUES). HOW EVER THE TAX WILL NOT INCLUDE ANY INTEREST THEREON, EXCEPT W HERE CHARGEABILITY OF INTEREST ITSELF IS IN DISPUTE. IN CASE THE CHARGEABILITY OF INTEREST IS THE ISSUE UNDER DISPUT E, THE AMOUNT OF INTEREST SHALL BE THE TAX EFFECT. IN CASE S WHERE RETURNED LOSS IS REDUCED OR ASSESSED AS INCOME, THE TAX EFFECT WOULD INCLUDE NOTIONAL TAX ON DISPUTED ADDIT IONS. IN CASE OF PENALTY ORDERS, THE TAX EFFECT WILL MEAN QU ANTUM 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 ISSUES IN THE CASE OF EVERY ASSESSEE. IF, IN THE CASE OF AN ASSESSEE, THE DISPUTED ISSUES ARISE IN MORE T HAN ONE ASSESSMENT YEAR, 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 S PECIFIED IN PARA 3. NO APPEAL SHALL BE FILED IN RESPECT OF A N ASSESSMENT YEAR OR YEARS IN WHICH THE TAX EFFECT IS LESS THAN THE MONETARY LIMIT SPECIFIED IN PARA 3. IN OTHER WO RDS, 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 ISSUES 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 THE PRESCRIBE D MONETARY LIMITS IN ANY OF THE YEAR(S), IF IT IS DECIDED TO F ILE APPEAL IN RESPECT OF THE YEAR(S) IN WHICH TAX EFFECT EXCEED S THE ITA NO. 2053/DEL/2007 CO. NO. 249/DEL/2007 MONETARY LIMIT PRESCRIBED. IN CASE WHERE A COMPOSIT E ORDER/ JUDGEMENT INVOLVES MORE THAN ONE ASSESSEE, EACH ASS ESSEE SHALL BE DEALT WITH SEPARATELY. 6. IN A CASE WHERE APPEAL BEFORE A TRIBUNAL OR A CO URT IS NOT FILED ONLY ON ACCOUNT OF THE TAX EFFECT BEING L ESS THAN THE MONETARY LIMIT SPECIFIED ABOVE, THE COMMISSIONE R OF INCOME-TAX SHALL SPECIFICALLY RECORD THAT EVEN THO UGH 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 SPECIFIED IN THIS INSTRUCTION. FURT HER, IN SUCH CASES, THERE WILL BE NO PRESUMPTION THAT THE I NCOME- TAX DEPARTMENT HAS ACQUIESCED IN THE DECISION ON TH E DISPUTED ISSUES. THE INCOME-TAX DEPARTMENT SHALL NO T BE PRECLUDED FROM FILING AN APPEAL AGAINST THE DISPUTE D ISSUES IN THE CASE OF THE SAME ASSESSEE FOR ANY OTHER ASSE SSMENT 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. 7. IN THE PAST, A NUMBER OF INSTANCES HAVE COME TO THE NOTICE OF THE BOARD, WHEREBY AN ASSESSEE HAS CLAIME D RELIEF FROM THE TRIBUNAL OR THE COURT ONLY ON THE GROUND T HAT THE DEPARTMENT HAS IMPLICITLY ACCEPTED 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 ASSESSE E FOR THE SAME OR ANY OTHER ASSESSMENT YEAR, BY NOT FILING AN APPEAL ON THE SAME DISPUTED ISSUES. THE DEPARTMENTAL REPRESENTATIVES/COUNSELS MUST MAKE EVERY EFFORT TO BRING TO THE NOTICE OF THE TRIBUNAL OR THE COURT THAT THE AP PEAL IN SUCH CASES WAS NOT FILED OR NOT ADMITTED ONLY FOR T HE REASON OF THE TAX EFFECT BEING LESS THAN THE SPECIFIED MON ETARY LIMIT AND, THEREFORE, NO INFERENCE SHOULD BE DRAWN THAT THE DECISIONS RENDERED THEREIN WERE ACCEPTABLE TO THE DEPARTMENT. ACCORDINGLY, THEY SHOULD IMPRESS UPON T HE ITA NO. 2053/DEL/2007 CO. NO. 249/DEL/2007 TRIBUNAL OR THE COURT THAT SUCH CASES DO NOT HAVE A NY PRECEDENT VALUE. AS THE EVIDENCE OF NOT FILING APPE AL DUE TO THIS INSTRUCTION MAY HAVE TO BE PRODUCED IN COURTS, THE JUDICIAL FOLDERS IN THE OFFICE OF CIT MUST BE MAINT AINED 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 EFFECT ENTAILED IS LESS THAN THE MONETARY LIMITS SP ECIFIED 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 CIRCULAR 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 ASSETS/ BANK ACCOUNTS. 9. THE MONETARY LIMITS SPECIFIED IN PARA 3 ABOVE SH ALL NOT APPLY TO WRIT MATTERS AND DIRECT TAX MATTERS OT HER THAN INCOME TAX. FILING OF APPEALS IN OTHER DIRECT TAX M ATTERS SHALL CONTINUE TO BE GOVERNED BY RELEVANT PROVISION S OF STATUTE & RULES. 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 TRUSTS OR INSTI TUTIONS UNDER SECTION 12A OF THE IT ACT, 1961, SHALL NOT BE GOVERNED BY THE LIMITS SPECIFIED IN PARA 3 ABOVE AND DECISI ON TO FILE APPEAL IN SUCH CASES MAY BE TAKEN ON MERITS OF A PA RTICULAR CASE. 10. THIS INSTRUCTION WILL APPLY RETROSPECTIVELY TO PENDING APPEALS AND APPEALS TO BE FILED HENCEFORTH IN HIGH COURTS/ TRIBUNALS. 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 ITA NO. 2053/DEL/2007 CO. NO. 249/DEL/2007 INSTRUCTIONS ON THIS SUBJECT, OPERATIVE AT THE TIME WHEN SUCH APPEAL WAS FILED. 11. THIS ISSUES UNDER SECTION 268A (1) OF THE INCOM E-TAX ACT 1961. 8. FROM CLAUSE 10 OF THE ABOVE CIRCULAR IT IS CLEAR THAT THESE INSTRUCTIONS ARE APPLICABLE TO THE PENDING APPEALS ALSO AND THERE IS CLEAR CUT INSTRUCTION TO THE DEPARTMENT TO WITHDRAW OR NOT TO PRESS THE APPEALS FILED BEFORE THE ITAT WHEREIN TAX EFFEC T IS LESS THAN RS.10,00,000/-. THESE INSTRUCTIONS ARE OPERATIVE RE TROSPECTIVELY TO THE PENDING APPEALS. 9. KEEPING IN VIEW THE CBDT CIRCULAR NO.21 OF 2015 DATED 10.12.2015 AND ALSO THE PROVISIONS OF SECTION 268A OF INCOME TAX ACT, 1961, WE ARE OF THE VIEW THAT THE REVENUE SHOU LD NOT HAVE FILED THE INSTANT APPEAL BEFORE THE TRIBUNAL. ACCO RDINGLY THE APPEAL OF THE DEPTT. IS DISMISSED. 10. AS REGARDS THE CROSS OBJECTION OF THE ASSESSEE, THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT HE HAS THE INSTRUCT ION NOT TO PRESS THE CROSS OBJECTION AND GAVE IN WRITING AS UNDER :- IN THE LIGHT TO BOARD CIRCULAR ON DEPARTMENTAL APP EAL HAVING TAX EFFECT LESS THAN 10,00,000/-. CO IS NOT PRESSED SD/- ( PRATAP GUPTA) ACCORDINGLY, THE C.O. IS DISMISSED AS NOT PRESSED. ITA NO. 2053/DEL/2007 CO. NO. 249/DEL/2007 11. IN THE RESULT, THE APPEAL OF THE REVENUE AND CR OSS OBJECTION OF THE ASSESSEE ARE DISMISSED. (ORDER PRONOUNCED IN THE COURT ON 04/01/2016). SD/- SD/- (KULDIP SINGH) (N. K. SAINI) JUDICIAL MEMBER ACCOUN TANT MEMBER DATED: 04 /01/2016 *B.RUKHAIYAR* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITA NO. 2053/DEL/2007 CO. NO. 249/DEL/2007 DATE INITIAL 1. DRAFT DICTATED ON 30.12.2015 2. DRAFT PLACED BEFORE AUTHOR 30.12.2015 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS PS/PS 6. KEPT FOR PRONOUNCEMENT ON PS 7. FILE SENT TO THE BENCH CLERK PS 8. DATE ON WHICH FILE GOES TO THE AR 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 10. DATE OF DISPATCH OF ORDER.