I.T.O Wd - 4(2),kolkata, Kolkata V. M/s Meghavi Promoters Pvt Ltd, Kolkata

ITA 2145/KOL/2013

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 5036 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 8 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-04-2016
• Appeal Filed By: Department
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 16-07-2013
• Court: TRIBUNAL
• Department Lawyers: RAJAT KR KUREEL JCIT LD
• Assessee Lawyers: SOURAV AG ARWAL ACA LD A
• Keywords: Audit objection; Tax effect
• Section: 143(3)

Judgement Text

ITA NO.2145/KOL/2013-B-AM M/S. MEGHAVI PROMOTERS PVT. LTD. T.E 1 IN THE INCOME TAX APPELLATE TRIBUNAL, B BENCH, K OLKATA BEFORE : SHRI N.V. VASUDEVAN, JUDICIAL MEMBER, A ND SHRI M. BALAGANESH, ACCOUNTANT MEMBER ITA NO. 2145/KOL/2013 A.Y 2008-09 I.T.O WARD 4(2), KOLKATA VS. M /S. MEGHAVI PROMOTERS PVT. LTD PAN: AADCM 8 682N (APPELLANT) (RESP ONDENT) FOR THE APPELLANT/DEPARTMENT: SHRI RAJAT KR. KUREEL, JCIT, LD. SR.DR FOR THE RESPONDENT/ASSESSEE: SHRI SOURAV AG ARWAL, ACA, LD.AR DATE OF HEARING: 06-04-2016 DATE OF PRONOUNCEMENT: 06-04-201 6 ORDER SHRI M.BALAGANESH, AM : THIS APPEAL OF THE REVENUE ARISES OUT OF THE ORDER OF THE LEARNED CIT(A)-IV, KOLKATA IN APPEAL NO. 123/CIT(A)-IV/2010-11 DATED 1 6-04-2013 DATED 16-04-2013 FOR THE ASSESSMENT YEAR 2008-09 AGAINST THE ORDER OF AS SESSMENT FRAMED U/S 143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS TH E ACT). 2. THE DELAY IN FILING THE APPEAL BY REVENUE BY 2 D AYS IS HEREBY CONDONED AFTER GETTING CONSENT FROM THE LD.AR 3. IT IS SEEN FROM THE PERUSAL OF THE RECORDS THA T THE TOTAL TAX EFFECT ON THE ADDITIONS ( RS. 5,37,595/-) DISPUTED BEFORE US IS ADMITTEDLY BELOW THE TAX EFFECT LIMIT PRESCRIBED BY CBDT VIDE CIRCULAR NO. 21 / 2015 DATED 10.12.20 15 FOR PREFERRING APPEAL(S) BEFORE TRIBUNAL BY THE REVENUE. IT WILL BE PERTINENT TO REPRODUCE THE RELEVANT PORTION OF THE SAID CIRCULAR NO. 21 / 2015 DATED 10.12.2015 :- ITA NO.2145/KOL/2013-B-AM M/S. MEGHAVI PROMOTERS PVT. LTD. T.E 2 3. HENCEFORTH, APPEALS / SLPS SHALL NOT BE FILED IN CASES WHERE THE TAX EFFECT DOES NOT EXCEED THE MONETARY LIMITS GIVEN HEREUNDER:- 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/- 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 DIFFERE NCE BETWEEN THE TAX ON THE TOTAL INCOME ASSESSED AND THE TAX THAT WOULD HAVE B EEN CHARGEABLE HAD SUCH TOTAL INCOME BEEN REDUCED BY THE AMOUNT OF INCOME I N RESPECT OF THE ISSUES AGAINST WHICH APPEAL IS INTENDED TO BE FILED (HEREI NAFTER REFERRED TO AS DISPUTED ISSUES). HOWEVER, THE TAX WILL NOT INCLUDE ANY I NTEREST THEREON, EXCEPT WHERE CHARGEABILITY OF INTEREST ITSELF IS IN DISPUTE. IN CASE THE CHARGEABILITY 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 INCOM E, THE TAX EFFECT WOULD INCLUDE NOTIONAL TAX ON DISPUTED ADDITIONS. IN CAS E OF PENALTY ORDERS, THE TAX EFFECT WILL MEAN QUANTUM OF PENALTY DELETED OR REDU CED IN THE ORDER TO BE APPEALED AGAINST. 5. THE ASSESSING OFFICER SHALL CALCULATE THE TAX EF FECT 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 ARI SE IN MORE THAN ONE ASSESSMENT YEAR , APPEAL, CAN BE FILED IN RESPECT OF SUCH ASSE SSMENT YEAR OR YEARS IN WHICH THE TAX EFFECT IN RESPECT OF THE DISPUTED ISSUES EX CEEDS 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 ON LY WITH REFERENCE TO THE TAX EFFECT IN THE RELEVANT ASSESSMENT YEAR. HOWEVER, IN CASE OF A COMPOSITE ORDER OF ANY HIGH COURT OR APPELLATE AUTHORITY, WHICH INVOLV ES 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), I F IT IS DECIDED TO FILE APPEAL IN RESPECT OF THE YEAR(S) IN WHICH TAX EFFECT EXCEED S THE MONETARY LIMIT PRESCRIBED. ITA NO.2145/KOL/2013-B-AM M/S. MEGHAVI PROMOTERS PVT. LTD. T.E 3 IN CASE WHERE A COMPOSITE ORDER / JUDGEMENT INVOLVE S MORE THAN ONE ASSESSEE, EACH ASSESSEE SHALL BE DEALT WITH SEPARATELY. 8. ADVERSE JUDGEMENTS RELATING TO THE FOLLOWING ISS UES 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 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 OBJECTION IN THE CASE HAS BEEN ACCEPTED BY THE DEPARTMENT, OR (D) WHERE THE ADDITION RELATES TO UNDISCLOSED FOREIGN A SSETS / BANK ACCOUNTS. 10. THIS INSTRUCTION WILL APPLY RETROSPECTIVELY TO PENDING APPEALS AND APPEALS TO BE FILED HENCEFORTH IN HIGH COURTS/ TRIBUNALS. PEN DING APPEALS BELOW THE SPECIFIED TAX LIMITS IN PARA 3 ABOVE MAY BE WITHDRA WN / NOT PRESSED. APPEALS BEFORE THE SUPREME COURT WILL BE GOVERNED BY THE IN STRUCTIONS ON THIS SUBJECT, OPERATIVE AT THE TIME WHEN SUCH APPEAL WAS FILED. 3.1 WE FIND THAT INTENTION BEHIND THE CIRCULAR NO.2 1/2015 DATED 10-12-2015 NEEDS TO BE UNDERSTOOD IN THE FOLLOWING PERSPECTIVE:- BY PASSAGE OF TIME, THE MONEY VALUE HAS GONE DOWN, THE COST OF LITIGATION EXPENSES HAS GONE UP, NUMBER OF ASSESSES ON THE FI LES OF THE DEPARTMENT HAVE BEEN INCREASED AND CONSEQUENTLY, THE BURDEN ON THE DEPARTMENT IS ALSO INCREASED TO A TREMENDOUS EXTENT. THE CORRIDORS OF THE SUPERIOR COURTS ARE CHOKED WITH HUGE PENDENCY OF CASES. IN THIS VIEW OF THE MATTER, THE CBDT HAS RIGHTLY TAKEN A DECISION TO REVISE THE MONETAR Y LIMITS IN TUNE WITH THE PRESENT VALUE OF MONEY AND WITH A VIEW TO REDUCE TH E LITIGATION AND OFFERING RELIEF TO SMALL TAX PAYERS. THIS IS ALSO IN VIEW O F THE FACT THAT TIME AND ENERGY OF THE DEPARTMENT COULD BE USED MORE PRODUC TIVELY AND EFFICIENTLY TO CATCH HOLD OF BIG FISHES, WHO IN TURN WOULD CONTRIB UTE MORE TO THE DEVELOPMENT OF THE COUNTRY. ITA NO.2145/KOL/2013-B-AM M/S. MEGHAVI PROMOTERS PVT. LTD. T.E 4 3.2 ON PERUSAL OF THE CIRCULAR NO. 21 / 2015 DATED 10.12.2015 AND THE MATERIALS AVAILABLE ON RECORD, WE COULD NOT SEE WHETHER THE I MPUGNED CASE FALLS UNDER ANY OF THE EXCEPTIONS CONTEMPLATED IN THE SAID CIRCULAR. WE A LSO FIND THAT THE CIRCULAR MAKES IT VERY CLEAR THAT THE REVISED MONETARY LIMITS SHALL A PPLY RETROSPECTIVELY TO PENDING APPEALS ALSO. WE FIND THAT THE CIRCULAR IS BINDING ON THE T AX AUTHORITIES. THIS POSITION HAS BEEN CONFIRMED BY THE HONBLE APEX COURT IN THE CASE OF COMMISSIONER OF C USTOMS VS INDIAN OIL CORPORATION LTD REPORTED IN 267 ITR 272 (SC) WHEREIN THEIR LORDSHIPS EXAMINED THE EARLIER DECISIONS OF THE APEX COURT WI TH REGARD TO BINDING NATURE OF THE CIRCULARS AND LAID DOWN THAT WHEN A CIRCULAR ISSUED BY THE BOARD REMAINS IN OPERATION THEN THE REVENUE IS BOUND BY IT AND CANNOT BE ALLOW ED TO PLEAD THAT IT IS NOT VALID OR THAT IT IS CONTRARY TO THE TERMS OF THE STATUTE. HENCE WE HOLD THAT THE APPEAL(S) OF THE REVENUE DESERVE TO BE DISMISSED IN TERMS OF LOW TAX EFFECT VIDE CIRCULAR NO.21 / 2015 DATED 10.12.2015. ACCORDINGLY, THIS BEING A LOW TAX EFFE CT CASE, WE DISMISS THE APPEAL OF THE REVENUE IN LIMINE , AS UNADMITTED, WITHOUT GOING IN TO THE MERITS OF THE CASE. THE APPEAL OF THE REVENUE IS DISMISSED. 4. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 06-04-2016 SD/- ( N.V. VASUDEVAN, JUDICIAL MEMBER ) SD/- (M. BALAGANESH, ACCOUNTANT MEMBER) DATE 06-04-2016 ITA NO.2145/KOL/2013-B-AM M/S. MEGHAVI PROMOTERS PVT. LTD. T.E 5 1. THE APPELLANT/DEPARTMENT: THE I.T.O WARD 4(2) P-7 CHOWRINGHEE SQUARE, AAYKAR BHAVAN, 8 TH FLOOR, KOLKATA-700001. 2 THE RESPONDENT- M/S. MEGHAVI PROMOTERS PVT. LTD 1 R.N MUKHERJEE ROAD, KOLKATA - 700001 . 3 /THE CIT, 4.THE CIT(A ) 5. DR, KOLKATA BENCH 6. GUARD FILE. TRUE COPY, BY ORDER, ASSTT REGISTRAR **PRADIP/SPS COPY OF THE ORDER FORWARDED TO: