ACIT, Central Circle - 1(1), Kolkata, Kolkata V. M/s. Adhunik Steels Ltd., Kolkata

ITA 2156/KOL/2017

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 3550 (ITAT-KOLKATA)
• Duration Of Justice: 10 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-08-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2013-2014
• Appeal Filed On: 06-10-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A BHATTACHARJEE
• Assessee Lawyers: S AGARWAL ACA
• Keywords: Tax effect
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH : KOLKATA [BEFORE & SHRI M.BALAGANESH, AM & HONBLE SHRI S. S. VISWANETHRA RAVI, JM ] I.T.A NO. 2156/KOL/20 17 ASSESSMENT YEAR : 2013-1 4 ACIT, CC-1(1), KOLKATA -VS- M/S ADHUNIK STEE LS LTD. [PAN: AACCA 6376 N ] (APPELLANT) (RESPONDENT) FOR THE APPELLANT : SHRI A. BHATTACHARJEE, ADDL. CIT FOR THE RESPONDENT : MS. S. AGARWAL, ACA DATE OF HEARING : 21.08.2018 DATE OF PRONOUNCEMENT : 21.08.2018 ORDER PER M.BALAGANESH, AM 1. THIS APPEAL BY THE REVENUE ARISES OUT OF THE O RDER OF THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS)-20, KOLKATA [IN SHORT THE LD CIT(A)] IN APPEAL NO. 1046/CC-1(1)/KOL/CIT(A)-20/15-16 DATED 2 7.07.2017 AGAINST THE ORDER PASSED BY THE ACIT,CC-1(1), KOLKATA [ IN SHOR T THE LD AO] UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT THE A CT) DATED 29.07.2015 FOR THE ASSESSMENT YEAR 2013-14. 2. RECENTLY THE CBDT HAS ISSUED CIRCULAR NO. 3 /2018 DATED 11.07.2018, WHEREBY THE MONETARY LIMITS FOR FILING OF APPEALS BY THE DEPARTMENT BEFORE 2 ITA NO.2156/KOL/2017 M/S ADHUNIK STEELS LTD. A.YR.2013-14 2 INCOME TAX APPELLATE TRIBUNAL AND HIGH COURTS AND SLP BEFORE SUPREME COURT HAVE BEEN INCREASED AS MEASURE FOR REDUCING LITIGAT ION. THE REVISED MONETARY LIMITS LAID DOWN IN PARA-3 OF THIS CIRCULAR AND THE MANNER OF COMPUTING TAX EFFECT AS LAID DOWN IN PARA-4 OF THIS CIRCULAR ARE AS FOLL OWS: 3 . HENCEFORTH, APPEALS/ SLPS SHALL NOT BE FILED I N CASES WHERE THE TAX EFFECT DOES NOT EXCEED THE MONETARY LIMITS GIVEN HE REUNDER: SL. NO. APPEALS/SLPS IN INCOME-TAX MATTERS MONETARY LIMIT (IN RS) 1. BEFORE APPELLATE TRIBUNAL 20,00,000/- 2. BEFORE HIGH COURT 50,00,000/- 3. BEFORE SUPREME COURT 1,00,00,000/- IT IS CLARIFIED THAT AN APPEAL SHOULD NOT BE FILED MERELY BECAUSE THE TAX EFFECT IN A CASE EXCEEDS THE MONETARY LIMITS PRESCR IBED 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 INC OME IN RESPECT OF THE ISSUES AGAINST WHICH APPEAL IS INTENDED TO BE FILED (HEREINAFTER REFERRED TO AS 'DISPUTED ISSUES). FURTHER, 'TAX EFFECT' SHALL BE TAX INCLUDING APPLICABLE SURCHARGE AND CESS. HOWEVER, THE TAX WILL NOT INCLU DE ANY INTEREST THEREON, EXCEPT WHERE 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 CASES WHERE RETURNED LO SS IS REDUCED OR ASSESSED AS INCOME, THE TAX EFFECT WOULD INCLUDE NOTIONAL TA X 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 AGAI NST. 3. IN PARA-13 OF THE SAID CIRCULAR IT HAS FURTHER BEEN CLARIFIED THAT THE REVISED MONETARY LIMITS WILL APPLY RETROSPECTIVELY. THE RE LEVANT PARA-13 OF THE CIRCULAR READS THUS: 3 ITA NO.2156/KOL/2017 M/S ADHUNIK STEELS LTD. A.YR.2013-14 3 13. THIS CIRCULAR WILL APPLY TO SLPS/APPEALS/CROSS OBJECTIONS/REFERENCES TO BE FILED HENCEFORTH IN SC/HCS/TRIBUNAL AND IT SH ALL ALSO APPLY RETROSPECTIVELY TO PENDING SLPS/APPEALS/CROSS OBJEC TIONS/REFERENCES. PENDING APPEALS BELOW THE SPECIFIED TAX LIMITS IN P ARA 3 ABOVE MAY BE WITHDRAWN/NOT PRESSED. 4. IN THE PRESENT CASE, THE TAX EFFECT IN THIS AP PEAL BY THE REVENUE IS LESS THAN RS.20,00,000/-. THOUGH THIS APPEAL HAD BEEN FILED BY THE REVENUE ON 06.10.2017 AND WAS WITHIN THE MONETARY LIMIT IN THE FORM OF TA X EFFECT FOR FILING APPEALS BEFORE TRIBUNAL, IN VIEW OF PARA-13 OF THE CIRCULAR OF CBDT, EVEN SUCH APPEALS WILL BE GOVERNED BY THE NEW MONETARY LIMITS LAID DO WN IN THE CBDT CIRCULAR NO.3/2018 REFERRED TO ABOVE. 5. IT IS A SETTLED LAW THAT THE CIRCULARS ISSUED BY CBDT ARE BINDING ON THE REVENUE. THIS POSITION WAS CONFIRMED BY THE APEX CO URT IN THE CASE OF COMMISSIONER OF CUSTOMS VS INDIAN OIL CORPORATION L TD. REPORTED IN 267 ITR 272 WHEREIN THEIR LORDSHIPS EXAMINED THE EARLIER DE CISIONS OF THE APEX COURT WITH REGARD TO BINDING NATURE OF THE CIRCULAR AND L AID DOWN THAT WHEN A CIRCULAR ISSUED BY THE BOARD REMAINS IN OPERATION THEN THE R EVENUE IS BOUND BY IT AND CANNOT BE ALLOWED TO PLEAD THAT IT IS NOT VALID OR THAT IT IS CONTRARY TO THE TERMS OF THE STATUTE. THE APPEAL UNDER CONSIDERATION HAS CER TAINLY BEEN FILED CONTRARY TO THE CIRCULAR ISSUED BY THE CBDT CIRCULAR NO.3 DATED 11. 07.2018. 5.1. IN THE EVENT, THE REVENUE FINDS AT A LATER POI NT OF TIME THAT THE TAX EFFECT IN THE APPEAL IS MORE THAN RS.20 LAKHS OR DESPITE LOW TAX EFFECT THE APPEAL OF THE REVENUE IS MAINTAINABLE, THE REVENUE IS AT LIBERTY TO MOVE THIS TRIBUNAL FOR RECALLING OF THIS ORDER. 4 ITA NO.2156/KOL/2017 M/S ADHUNIK STEELS LTD. A.YR.2013-14 4 6. IN VIEW OF THE ABOVE, WE HOLD THAT THE APPEAL FI LED BY THE DEPARTMENT, AGAINST THE IMPUGNED ORDER OF THE LD. CIT(A), IS CO NTRARY TO THE POLICY DECISION OF THE DEPARTMENT AND AS SUCH THE APPEAL FILED BY T HE DEPARTMENT IS DISMISSED IN LIMINE . 7. IN THE RESULT, THE APPEAL BY THE REVENUE IS DI SMISSED. ORDER PRONOUNCED IN THE COURT ON 21.08.2018 SD/- SD/- [S.S. VISWANETHRA RAVI] [ M.BALAGANE SH ] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 21.08.2018 SB, SR. PS COPY OF THE ORDER FORWARDED TO: 1. ACIT, CC-1(1), KOLKATA, AAYAKAR BHAWAN POORVA, 1 10, SHANTIPALLY, 3 RD FLOOR, KOLKATA-700107. 2. M/S ADHUNIK STEELS LTD., 14, N.S. ROAD, KOLKATA- 700001. 3. C.I.T(A)- 4. C.I.T.- KOLKATA. 5. CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY BY ORDER SENIOR PRIVAT E SECRETARY HEAD OF OFFICE/D.D.O., ITAT, KOLKATA BENCHE S