ITO, Ward - 9(2), Kolkata, Kolkata V. V.I.P. Buildcon (P) Ltd., Kolkata

ITA 2163/KOL/2010

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 8068 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 10 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-10-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2002-2003
• Appeal Filed On: 06-12-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D K RAKSHIT
• Assessee Lawyers: MANISH TIWARI
• Keywords: Audit objection; Tax effect
• Section: 260A; 12A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH: KOL KATA [BEFORE SHRI C.D.RAO, A.M. & SHRI GEORGE MATHAN, J. M. ] I.T.A. NO.2163/KOL/2010 ASSESSMENT YEAR : 2002-2003 I.T.O., WARD-9(2), KOLKATA -VS- V. I.P. BUILDCON (P) LTD. 144A, J.L.BAJAJ STREET, KOLKATA 700 007 (PAN:AAACV 8861D) ( APPELLANT ) ( RESPONDENT ) DATE OF CONCLUDING THE HEARING : 17.10.2012 DATE OF PRONOUNCING THE ORDER : 17.10.2012 APPEARANCES : FOR THE APPELLANT : SHRI D.K.R AKSHIT, JCIT, SR.(DR) : FOR THE RESPONDENT : SHRI MANISH TIWARI , ADVOCATE O R D E R PER SHRI GEORGE MATHAN,J.M. THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF THE LD. CIT(A)- CENTRAL-II, KOLKATA IN APPEAL NO.285/CC-XIII/CIT(A) -C-II/KOL./06-07 DATED 31 ST AUGUST, 2010 FOR THE ASSESSMENT YEAR 2002-2003. 2. SHRI D.K.RAKSHIT, JCIT REPRESENTED ON BEHALF OF THE REVENUE AND SHRI MANISH TIWARI, ADVOCATE REPRESENTED ON BEHALF OF TH E ASSESSEE. 3. AT THE TIME OF HEARING LD. COUNSEL FOR THE ASSE SSEE STATED THAT THAT TAX EFFECT IN THIS APPEAL OF THE REVENUE IS BELOW THE PRESCRIB ED MONETARY LIMITS FOR FILING OF APPEAL BEFORE ITAT. IT SEEMS THAT THE REVENUES APP EAL, THE AMOUNT IN DISPUTE INVOLVED IS RS.6,39,121/- ON WHICH TAX DEMAND TO BE RAISED ON THE ASSESSEE IS RS.2,28,166/-. THE ONLY ISSUE 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 M ONETARY LIMITS FOR FILING OF APPEALS BY THE DEPARTMENT BEFORE ITAT. THE APPEAL R ELATES TO ASSESSMENT YEAR 2 I.T.A. NO.2163/KOL/2010 V.I.P.BUILDCON (P) LTD. ASSES SMENT YEAR : 2002-03 2002-03 AND FILED BEFORE THE TRIBUNAL ON 06.12.2010 . SINCE THIS APPEAL FILED ON 06.12.2010, THE SAME WILL BE COVERED BY INSTRUCTION NO. 3/2011 ISSUED ON 09.02.2011 I.E. THE REVISED MONETARY LIMIT FOR FILI NG OF APPEAL BEFORE ITAT, WHEREBY THE CBDT HAS FIXED THE LIMIT OF RS.3 LACS. 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/ 2008 DATED 15-5-2008 WHEREIN MONETARY LIMITS AND OTHER CONDITIONS FOR F ILING DEPARTMENTAL APPEALS (IN INCOME-TAX MATTERS) BEFORE APPELLATE T RIBUNAL, HIGH COURTS AND SUPREME COURT WERE SPECIFIED. 2. IN SUPERSESSION OF THE ABOVE INSTRUCTION, IT HAS BE EN DECIDED BY THE BOARD THAT DEPARTMENTAL APPEALS MAY BE FILED ON MERITS B EFORE APPELLATE TRIBUNAL, HIGH COURTS AND SUPREME COURT KEEPING IN VIEW THE MONETARY LIMITS AND CONDITIONS SPECIFIED 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 LIMI T (IN RS.) 1. APPEAL BEFORE APPELLATE TRIBUNAL 3,00,000 2. APPEAL U/S. 260A BEFORE HIGH COURT 10,00,000 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 A BOVE. 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 SUCH TOTAL INCOME BEEN REDUCED BY THE AMOUNT OF IN COME IN RESPECT OF THE ISSUES AGAINST WHICH APPEAL IS INTENDED TO BE FILE D (HEREINAFTER REFERRED TO AS 'DISPUTED ISSUES'). HOWEVER THE TAX WILL NOT IN CLUDE ANY INTEREST THEREON, EXCEPT WHERE CHARGEABILITY OF INTEREST ITSELF IS I N DISPUTE. IN CASE THE CHARGEABILITY OF INTEREST IS THE ISSUE UNDER DISPU TE, THE AMOUNT OF INTEREST SHALL BE THE TAX EFFECT. IN CASES WHERE RETURNED L OSS IS REDUCED OR ASSESSED AS INCOME, THE TAX EFFECT WOULD INCLUDE NOTIONAL T AX ON DISPUTED ADDITIONS. IN CASE OF PENALTY ORDERS, THE TAX EFFECT WILL MEA N QUANTUM OF PENALTY DELETED OR REDUCED IN THE ORDER TO BE APPEALED AGA INST. 3 I.T.A. NO.2163/KOL/2010 V.I.P.BUILDCON (P) LTD. ASSES SMENT YEAR : 2002-03 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 DISP UTED ISSUES ARISE IN MORE THAN ONE ASSESSMENT YEAR, APPEAL, CAN BE FILED IN RESPECT OF SUCH ASSESSMENT YEAR OR YEARS IN WHICH THE TAX EFFECT IN RESPECT O F 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 EFFEC T IS LESS THAN THE MONETARY LIMIT SPECIFIED IN PARA 3. IN OTHER WORDS, HENCEFO RTH, APPEALS CAN BE FILED ONLY WITH REFERENCE TO THE TAX EFFECT IN THE RELEV ANT 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 SH ALL 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), IF IT IS DE CIDED TO FILE APPEAL IN RESPECT OF THE YEAR(S) IN WHICH 'TAX EFFECT' EXCEEDS THE M ONETARY LIMIT PRESCRIBED. IN CASE WHERE A COMPOSITE ORDER/JUDGMENT INVOLVES MOR E THAN ONE ASSESSEE, EACH ASSESSEE SHALL BE DEALT WITH SEPARATELY. 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 MONE TARY LIMIT SPECIFIED ABOVE, THE COMMISSIONER OF INCOME-TAX SHALL SPECIFICALLY RECORD THAT 'EVEN THOUGH THE DECISION IS NOT ACCEPTABLE, APPEAL IS NOT BEIN G FILED ONLY ON THE CONSIDERATION THAT THE TAX EFFECT IS LESS THAN THE MONETARY LIMIT SPECIFIED IN THIS INSTRUCTION'. FURTHER, IN SUCH CASES, THERE WILL BE NO PRESUMPTI ON THAT THE INCOME-TAX DEPARTMENT HAS ACQUIESCED IN THE DECISION ON THE D ISPUTED ISSUES. THE INCOME-TAX DEPARTMENT SHALL NOT BE PRECLUDED FROM FILING AN APPEAL AGAINST THE DISPUTED ISSUES IN THE CASE OF THE SAME ASSESS EE 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 SPE CIFIED MONETARY 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 TR IBUNAL OR THE COURT ONLY ON THE GROUND THAT THE DEPARTMENT HAS IMPLICITLY A CCEPTED 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 ASSESSEE FOR THE SAME OR ANY OTHER ASSESSMENT YEAR, BY NOT FILING AN APPEAL ON THE SA ME DISPUTED ISSUES. THE DEPARTMENTAL REPRESENTATIVES/COUNSELS MUST MAKE EV ERY EFFORT TO BRING TO THE NOTICE OF THE TRIBUNAL OR THE COURT THAT THE A PPEAL IN SUCH CASES WAS NOT FILED OR NOT ADMITTED ONLY FOR THE REASON OF THE T AX EFFECT BEING LESS THAN THE SPECIFIED MONETARY LIMIT AND, THEREFORE, NO INFERE NCE SHOULD BE DRAWN THAT THE DECISIONS RENDERED THEREIN WERE ACCEPTABLE TO THE DEPARTMENT. ACCORDINGLY, THEY SHOULD IMPRESS UPON THE TRIBUNAL OR THE COURT THAT SUCH 4 I.T.A. NO.2163/KOL/2010 V.I.P.BUILDCON (P) LTD. ASSES SMENT YEAR : 2002-03 CASES DO NOT HAVE ANY PRECEDENT VALUE. AS THE EVID ENCE 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 ENTAILE D IS LESS THAN THE MONETARY LIMITS SPECIFIED IN PARA 3 ABOVE OR THERE IS NO TA X EFFECT. A. WHERE THE CONSTITUTIONAL VALIDITY OF THE PROVIS IONS OF AN ACT OR RULE ARE UNDER CHALLENGE, OR B. WHERE BOARD'S ORDER, NOTIFICATION, INSTRUCTION OR CIRCULAR HAS BEEN HELD TO BE ILLEGAL OR ULTRA VIRES, OR C. WHERE REVENUE AUDIT OBJECTION IN THE CASE HAS B EEN 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 A LL CASES, BE SENT TO THE DIRECTORATE OF INCOME-TAX (LEGAL & RESEARCH), NEW DELHI AND THE DECISION TO FILE SPECIAL LEAVE PETITION SHALL BE IN CONSULT ATION 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-T AX, FILING OF APPEALS IN OTHER DIRECT TAX MATTERS SHALL CONTINUE TO BE GOVE RNED BY RELEVANT PROVISIONS OF STATUTE AND RULES. FURTHER, FILING OF APPEAL IN CASES OF INCOME TAX, WHERE THE TAX EFFECT IS NOT QUANTIFIABLE OR NOT INVOLVED , SUCH AS THE CASE OF REGISTRATION OF TRUSTS OR INSTITUTIONS UNDER SECTI ON 12A OF THE IT ACT, 1961, SHALL NOT BE GOVERNED BY THE LIMITS SPECIFIED IN P ARA 3 ABOVE AND DECISION TO FILE APPEAL IN SUCH CASES MAY BE TAKEN ON MERITS O F A PARTICULAR CASE. 11. THIS INSTRUCTION WILL APPLY TO APPEALS FILED ON OR AFTER FEBRUARY, 09, 2011. HOWEVER, THE CASES WHERE APPEALS HAVE BEEN F ILED BEFORE FEBRUARY 09, 2011 WILL BE GOVERNED BY THE INSTRUCTIONS ON T HIS 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 P OINT OUT ANY OF THE EXCEPTIONS AS PROVIDED IN THE CIRCULAR AS UNDER: (A) THAT THIS IS A LOSS CASE HAVING TAX EFFECT MOR E THAN THE PRESCRIBED LIMIT, WHICH SHOULD BE TAKEN INTO ACCOUNT, 5 I.T.A. NO.2163/KOL/2010 V.I.P.BUILDCON (P) LTD. ASSES SMENT YEAR : 2002-03 (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 ABOVE 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 B EEN ACCEPTED BY THE DEPARTMENT AND THE SAME IS UNDER CHALLENGE. 4.1 AS THE LD. DR COULD NOT POINT OUT ANY OF THE EX CEPTIONS AS PROVIDED ABOVE, ACCORDINGLY, THIS BEING A TAX EFFECT CASE, WE DISMI SS THE APPEAL OF THE REVENUE IN LIMINE WITHOUT GOING INTO MERITS AND AS UNADMITTED. 5. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. THIS ORDER IS PRONOUNCED IN THE OPEN COURT ON 17 TH OCTOBER, 2012 I.E. ON THE DATE OF HEARING ITSELF IN PRESENCE OF BOTH REPR ESENTATIVES. SD/- SD/- (C. D. RAO) (GEORGE MATHAN) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 17 TH OCTOBER, 2012 COPY OF THE ORDER FORWARDED TO: 1. V.I.P. BUILDCON (P) LTD., 144A, J.L.BAJAJ STREET, KOLKATA 700 007 2 I.T.O., WARD-9(2), KOLKATA 3. THE CIT(A), KOLKATA 4. CIT, KOLKATA 5. DR, KOLKATA BENCHES, KOLKATA TRUE COPY, BY ORDER, ASSTT. REGISTRAR , ITAT, KOLKATA TALUKDAR(SR.P.S.) 6 I.T.A. NO.2163/KOL/2010 V.I.P.BUILDCON (P) LTD. ASSES SMENT YEAR : 2002-03