DCIT, C.C.-XI, Kolkata, Kolkata V. Susanta Mondal, Birbhum

ITA 22/KOL/2010

• Counselvise Citation: 2223514 RSA 2010
• Duration Of Justice: 1 year(s) 9 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-10-2011
• Appeal Filed By: Department
• Bench Allotted: C
• Assessment Year: 2003-2004
• Appeal Filed On: 05-01-2010
• Court: TRIBUNAL
• Department Lawyers: R K SAHA LD
• Assessee Lawyers: SUSANTA MONDAL LD
• Keywords: Audit objection; Tax effect

Judgement Text

, C , , IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH- C , CALCUTTA ( ) . . , ! '# $! , , [BEFORE SHRI S.V.MEHROTRA, A.M & SHRI N.VIJAYKUMARAN, J.M] % / I.T.A. NOS. 22 & 23/KOL/2010 &!' () / ASSESSMENT YEARS : 2003-2004 & 2004-05 DEPUTY COMMISSIONER OF INCOME TAX - V S.- SUSANTA MONDAL, BIRBHUM CC-XI, KOLKATA PAN: AIMPM 4139R (APPELLANT) (RESPONDENT) *+ , - / APPELLANT BY : SHRI R.K.SAHA, LD.DR /0*+ , - / RESPONDENT BY : SHRI SUSANTA MONDAL, LD.AR $!1 , 2 / DATE OF HEARING :17/10/11 3( , 2 / DATE OF PRONOUNCEMENT : 17/10/11 4 4 4 4 /O R D E R . . , : SHRI S.V.MEHROTRA, AM THE DEPARTMENT HAS FILED THESE TWO APPEALS FOR THE ASSESSMENT YEARS 2003-04 AND 2004-05 AGAINST THE ORDERS OF LD. COMMISSIONER OF INCOME-TA X (APPEALS), CENTRAL-1,KOLKATA BOTH DATED 19/10/2009. 2. AT THE OUTSET BOTH THE PARTIES ARE AGREED THAT THE TAX EFFECT IN EACH OF THE APPEAL IS LES S THAN RS.2 LAKHS. THE LD. D.R. DID NOT POINT OUT AS TO WHETHER ANY OF THE EXCEPTIONS LAID DOWN IN PARA 8 OF CBDT CIRCULAR NO. 279/MISC.-64/05-ITJ DATED 24.1 0.05 READ WITH INSTRUCTION NO.5 OF 2008 DATED 15.05.2008 ARE APPLICABLE TO CONSIDER THESE APPEALS ON MERITS. THE DEPARTMENT IN ABOVE INSTRUCTION DATED 15.05.2008 HAS SPECIFIED 3 GROUNDS IN PARA 8 STATING THAT THE APPEAL COULD BE FILED BEFORE THE TRIBUNAL WHERE THE TAX EFFECT IS LESS THAN RS.2.00 LAKHS ONLY AND THE SAME ARE AS UNDER :- (A) WHERE THE CONSTITUTIONAL VALIDITY OF THE PROVIS IONS OF AN ACT OR RULE ARE UNDER CHALLENGE. (B) WHERE BOARDS ORDER, NOTIFICATION, INSTRUCTION OF CIRCULAR HAS BEEN HELD TO BE ILLEGAL OR ULTRA VIRES. (C) WHERE REVENUE AUDIT OBJECTION IN THE CASE HAS B EEN ACCEPTED BY THE DEPARTMENT. ITA NO.S 22 & 23/KOL/2010-C SVM T.E 2 3. THERE IS NO DISPUTE ON THE FACT THAT THE CB DT VIDE INSTRUCTION NO. 2/2005 DATED 24.10.2005, ISSUED GUIDELINES TO THE REVENUE AUTHORITIES WITH R EGARD TO FILING OF APPEALS BEFORE THE TRIBUNAL, HIG H COURT AND THE SUPREME COURT. FROM THE SAID INSTRUCT IONS, IT IS EVIDENT THAT SINCE 1987, THE CBDT HAS BEEN INSTRUCTING ITS OFFICERS NOT TO FILE THE A PPEAL WHERE THE TAX EFFECT IS BELOW CERTAIN MONETAR Y LIMITS. VIDE INSTRUCTION NO. 1903 DATED 28.10.1992 THE MONETARY LIMITS WERE REVISED UPWARD AND THE OFFICERS WERE DIRECTED NOT TO FILE APPEAL BEFORE TH E INCOME TAX APPELLATE TRIBUNAL WHERE THE TAX EFFECT WAS BELOW RS.25,000/-. THE ABOVE MONETARY LI MIT WAS FURTHER REVISED UPWARD BY INSTRUCTION NO.1979 DATED 27.3.2000 AND THE OFFICERS WERE DIREC TED NOT TO FILE THE APPEAL TO ITAT WHERE THE TAX EFFECT IS BELOW RS. 1,00,000/-. THEREAFTER IN PARTI AL MODIFICATION OF THE ABOVE INSTRUCTION, THE BOARD VIDE INSTRUCTION NO.2/2005 DATED 24.10.2005 HAS FUR THER RAISED THE ABOVE MONETARY LIMIT TO RS.2,00,000/- WITH THE SAME DIRECTIONS. THUS, THE C .B.D.T SINCE 1987 HAS NOT ONLY TAKEN A CONSISTENT STAND OF INSTRUCTING ITS OFFICERS FOR NOT FILING TH E APPEAL WHERE THE TAX EFFECT IS BELOW THE MONETARY LIMIT, BUT SUCH MONETARY LIMIT IS ALSO REVISED UPWA RD FROM TIME TO TIME. THE CIRCULAR UNDER INSTRUCTION NO.1979 DATED 27-3-2000 WAS CONSIDERED BY THE BOMBAY HIGH COURT IN THE CASE OF CAMCO COLOUR CO. 254 ITR 565 AND THEIR LORDSHIPS HE LD AT PAGE 568 AS UNDER :- IT APPEARS THAT DESPITE THE ABOVE CIRCULAR, THE RE VENUE HAS CHOSEN TO FILE THE PRESENT APPEAL KNOWINGLY FULLY WELL THAT THE CORRIDORS OF T HE COURTS ARE FLOODED WITH PENDING LITIGATIONS. THE PRESENTATION OF THIS APPEAL IS QUI TE CONTRARY TO THE INSTRUCTION ISSUED IN THE CIRCULAR, WHICH IS BINDING ON THE REVENUE. IN THE ABOVE VIEW OF THE MATTER, CONSIDERING THE IN STRUCTIONS ISSUED BY THE CENTRAL BOARD OF DIRECT TAXES, WE ARE SATISFIED THAT THE BO ARD HAS TAKEN A POLICY DECISION NOT TO FILE APPEAL IN A TYPE OF CASE IN HAND AND THE SA ME IS BINDING ON THE REVENUE (APPELLANT HEREIN). IN THE RESULT, WE DISMISS THIS APPEAL ON THIS COUNT IN LIMINE WITH NO ORDER AS TO COSTS. 4. WE FURTHER FIND THAT RECENTLY THE APEX COURT HA S CONSIDERED THE EFFECT OF CIRCULAR ISSUED BY THE CBDT IN THE CASE OF COMMISSIONER OF CUSTOMS VS. IND IAN OIL CORPORATION LTD. 267 ITR 272. THEIR LORDSHIPS EXAMINED THE EARLIER DECISIONS OF THE APE X COURT WITH REGARD TO BINDING NATURE OF THE CIRCULAR AND LAID DOWN THE FOLLOWING PRINCIPLES AT PAGE 277 OF THE REPORTS- THE PRINCIPALS LAID DOWN BY ALL THESE DECISIONS AR E- 1) ALTHOUGH A CIRCULAR IS NOT BINDING ON A COURT ON AN ASSESSEE, IT IS NOT OPEN TO THE REVENUE TO RAISE A CONTENTION THAT IS CONTRARY TO A BINDING CIRCULAR BY THE BOARD. WHEN A CIRCULAR REMAINS IN OPERATION, THE REVENUE IS BOUND BY IT AND CANNOT BE ALLOWED TO PLEAD THAT IT IS NOT VALID NOR THAT IT IS CONTRARY TO THE TERMS OF THE STATUTE. ITA NO.S 22 & 23/KOL/2010-C SVM T.E 3 2) DESPITE THE DECISION OF THIS COURT, THE DEPARTME NT CANNOT BE PERMITTED TO TAKE A STAND CONTRARY TO THE INSTRUCTIONS ISSUED BY THE BOARD. (3) A SHOW CAUSE NOTICE AND DEMAND CONTRARY TO EXI STING CIRCULARS OF THE BOARD ARE AB INITIO VOID. (4) IT IS NOT OPEN TO THE REVENUE TO ADVANCE AN ARG UMENT OR FILE AN APPEAL CONTRARY TO THE CIRCULARS. 5. IN VIEW OF THE ABOVE AND CONSIDERING THE CBD TS CIRCULAR F. NO. 279/MISC.-64/05-ITJ DATED 24 TH OCTOBER, 2005 READ WITH INSTRUCTION NO. 2/2005 DAT ED 24 TH OCTOBER, 2005 AND INSTRUCTION NO. 5/2008 DATED 15.05.2008, WE HOLD THAT BOTH THE APPE ALS FILED BY THE DEPARTMENT ARE CONTRARY TO THE SAID CIRCULARS/ INSTRUCTIONS OF THE CBDT. ACCORDING LY, THEY ARE NOT ADMITTED AND ARE BEING DISMISSED IN LIMINE. 6. IN THE RESULT, BOTH THE APPEALS FILED BY THE DEPARTMENT ARE DISMISSED. 4 $ 5 $! 6 7 2 17-10-2011 ORDER PRONOUNCED IN THE OPEN COURT ON 17-10-2011 SD/- SD/- [ ! '# $! , ] ] [ . . , ] ( N,VIJAYKUMARAN, JUDICIAL MEMBER) (S.V. MEHROTRA, ACCO UNTANT MEMBER ) (2) DATED : 17-10-2011 *PP :; &!<# &= /SR.P.S. 4 , /&&' >'(?- COPY OF THE ORDER FORWARDED TO: 1. *+ /APPELLANT- D.C.I.T, CC XI, 5 TH FL., 18 RABINDRA SARANI, KOL-1. 2 /0*+ / RESPONDENT : SHRI SUSANTA MONDAL VILL & P.O MD. BAZAR TOWNSHIP DIST: BIRBHUM PIN 731127. 3. &4!/ THE CIT, 4. &4! ()/ THE CIT(A), KOLKATA. 5. &6 /&!/ DR, KOLKATA BENCHES, KOLKATA 0' /&/ TRUE COPY , 4!$/ BY ORDER , # /ASSTT. REGISTRAR