The ACIT Corporate, Cochin V. M/s.Escapade Resorts(P) Ltd, Cochin

ITA 221/COCH/2015

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 96822 (ITAT-COCHIN)
• Duration Of Justice: 8 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-12-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 19-11-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 07-04-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Audit objection; Retrospective amendment; Tax effect
• Section: 12A

Judgement Text

12 APPEALS 1 IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE S/SHRI B P JAIN , A M & GEORGE GEORGE.K , J M ITA NO . 62/COCH/2015 (ASST YEAR 2006 - 07 ) THE DY COMMR OF INCOME TAX CIRCLE 1 PALAKKAD VS M/S HADEED STEELS P LTD INDUSTRIAL ESTATE KANJIKODE PALA KKAD PAN AABCH5802P ( APPELLANT) (RESPONDENT) ASSESSEE BY NONE REVENUE BY SH K P GOPAKUMAR, SR DR SH SHANTOM BOSE CIT - DR DATE OF HEARING 23 RD DEC 2015 DATE OF PRONOUNCEMENT 23 RD DEC 2015 ITA NO .372/COCH/2014 (ASST YEAR 2010 - 11 ) THE DY COMM R OF INCOME TAX CIRCLE 2(1) RANGE 2 TRICHUR VS SRI N A RAJU PROP OMEGA HERITAGE PUNKUNNAM TRICHUR 2 PANABRPR9369K ( APPELLANT) (RESPONDENT) ASSESSEE BY SH CBM WARRIER REVENUE BY SH K P GOPAKUMAR, SR DR SH SHANTOM BOSE CIT - DR DATE OF HEARING 23 RD DEC 2015 DATE OF PRONOUNCEMENT 23 RD DEC 2015 ITA NO . 201/COCH/2015 (ASST YEAR 2006 - 07 ) THE ASST COMMR OF INCOME TAX CORPORATE CIRCLE 2(1) KOCHI VS M/S PSN AUTOMATIC MARKETING P LTD 35/189 PALARIVATTOM PO KOCHI 682 025 PAN AABCA9447K ( APPELLANT) (RESPONDENT) 12 APPEALS 2 ASSESSEE BY SH NARAYANA MOORTHY REVENUE BY SH K P GOPAKUMAR, SR DR SH SHANTOM BOSE CIT - DR DATE OF HEARING 23 RD DEC 2015 DATE OF PRONOUNCEMENT 23 RD DEC 2015 ITA NO . 216/COCH/2015 (ASST YEAR 2009 - 10 ) THE ASST COMMR O F INCOME TAX C ORPORATE CIRCLE 1 (2) KOCHI VS M/S KITEX GARMENTS LTD 9/536A KITEWX HOUSE NO. 5 KIZHAKAMBALAM PAN AABCK0714F ( APPELLANT) (RESPONDENT) ASSESSEE BY NONE REVENUE BY SH K P GOPAKUMAR, SR DR SH SHANTOM BOSE CIT - DR DATE OF HEARING 23 RD DEC 2015 DATE OF PRONOUNCEMENT 23 RD DEC 2015 ITA NO 127/COCH/2015 (ASST YEAR 2006 - 07 ) THE DY COMMR OF INCOME TAX KOTTAYAM VS SMT KURUVILA AUGUSTINE KACHIRAMATTOM HOUSE CHEMBUMUKKU TRIKKAKARA KOCHI PAN AEFPK06228 ( APPELLANT) (RESPONDENT) ASSESSEE BY NONE RE VENUE BY SH K P GOPAKUMAR, SR DR SH SHANTOM BOSE CIT - DR DATE OF HEARING 23 RD DEC 2015 DATE OF PRONOUNCEMENT 23 RD DEC 2015 ITA NO S.219 & 220/COCH/2015 (ASST YEAR S 2009 - 10 & 201011 ) THE ASST C OMMR OF INCOME TAX CORPORATE CIRCLE 2(1), KOCHI VS M/S OE N INDIA P LTD P B NO. 1952 OEN HOUSE VYTTILA ERNAKULAM 19 PAN AAACO2007Q ( APPELLANT) (RESPONDENT) 12 APPEALS 3 ASSESSEE BY NONE REVENUE BY SH K P GOPAKUMAR, SR DR SH SHANTOM BOSE CIT - DR DATE OF HEARING 23 RD DEC 2015 DATE OF PRONOUNCEMENT 23 RD DEC 2015 ITA NO 531/COCH/2015 (ASST YEAR 2006 - 07 ) THE INCOME TAX OFFICER WARD 2, KOPTTAYAM VS M/S KEY SYSTEMS APTECH SHANGRILA PLAZA T B ROAD KOTTAYAM PAN AACFK4681K ( APPELLANT) (RESPONDENT) ASSESSEE BY NONE REVENUE BY SH K P GOPAKUMAR, SR DR SH SHANTOM BOSE CIT - DR DATE OF HEARING 23 RD DEC 2015 DATE OF PRONOUNCEMENT 23 RD DEC 2015 ITA NO 316/COCH/2015 (ASST YEAR 2010 - 11) THE INCOME TAX OFFICER (EXEMPTION) KOZHIKODE VS TIRUR TALUK SUNNI ORPHANAGE COMMITTEE VALAVANNUR PO MALAPPURAM PAN AAATT2856M ( APPELLANT) (RESPONDENT) ASSESSEE BY NONE REVENUE BY SH K P GOPAKUMAR, SR DR DATE OF HEARING 23 RD DEC 2015 DATE OF PRONOUNCEMENT 23 RD DEC 2015 ITA NO S.221 & 225/COCH/201 5 (ASST YEAR 2006 - 07 & 07 - 08 ) THE ASST C OMMR OF INCOME TAX CORPORATE CI RCLE 1(1) KOCHI VS M/S ESCAPADE RESORTS CASINO HOTEL WILLINGDON ISLAND KOCHI 3 PAN AAACE5987L ( APPELLANT) (RESPONDENT) 12 APPEALS 4 ASSESSEE BY SHRI P K SASIDHARAN REVENUE BY SH SHANTOM BOSE, CIT - DR DATE OF HEARING 23 RD DEC 2015 DATE OF PRONOUNCEMENT 23 RD DEC 2015 ITA NO 431/COCH/2015 (ASST YEAR 2009 - 10 ) THE ASST DY COMMR OF INCOME TAX CENTRAL CIRCLE TRICHUR VS DR PRADEEP M SREEDEEP VINAYAGA NAGAR THAREKAD PO PALAKKAD PAN - ADJPP6704C ( APPELLANT) (RESPONDENT) ASSESSEE BY SHRI CBM WARRIER, CA REVENUE BY SH K P GOPAKUMAR, SR DR DATE OF HEARING 23 RD DEC 2015 DATE OF PRONOUNCEMENT 23 RD DEC 2015 ORDER PER BENCH: THESE APPEALS , FILED BY THE REVENUE PERTAIN TO DIFFERENT ASSESSEES , ARE D IRECTED AGAINST SEPARATE ORDERS OF THE CIT(A) AND THEY RELATE TO DIFFERENT ASSESSMENT YEARS . 2. WE HAVE HEARD THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. 3. IT WAS OBSERVED THAT IN VIEW OF THE LATEST CBDT CIRCULAR NO.21/2015 DATED 10 TH DECEMBER, 2015, THE APPEAL S OF THE DEPARTMENT ARE NOT MAINTAINABLE IN VIEW OF THE TAX EFFECT BEING LESS THAN THE MONETARY LIMIT PRESCRIBED BY THE SAID CIRCULAR. THE TAX EFFECT IN FILING THE APPEAL BEFORE THE TRIBUNAL SHOULD BE ABOVE 12 APPEALS 5 RS.10 LAKHS IN VIEW OF THE ABOVE SAID CIRCULAR. THE ABOVE CIRCULAR HAS CLEARLY MENTIONED TO HAVE RETROSPECTIVE EFFECT AND IS TO HAVE APPLICATION TO THE PENDING APPEALS. THE RELEVANT EXTRACTS OF THE CBDT CIRCULAR IN ITS FULL , IS REPRODUCED BELOW FOR READY REFERENCE: F NO 279/MISC. 142/2007 - ITJ (PT) CIRCULAR NO. 21/2015 GOVERNMENT OF INDIA MINISTRY OF FINANCE DEPARTMENT OF REVENUE CENTRAL BOARD DIRECT TAXES NEW DELHI THE 10TH DECEMBER, 2015 SUBJECT: REVISION OF MONETARY LIMITS FOR FILING OF APPEALS BY THE DEPARTMENT BEFORE INCOME TAX APPELLATE TRIBUNAL AND HIGH COURTS AND SLP BEFORE SUPREME COURT - MEASURES FOR REDUCING LITIGATION - REG - REFERENCE IS INVITED TO BOARD'S INSTRUCTION NO 5/2014 DATED 10.07.2014 WHEREIN MONETARY LIMITS AND OTHER CONDITIONS FOR FILING DEPARTMENTAL APPEALS (IN INCOME - TAX MATTERS) BEFORE APPELLATE TRIBUNAL AND HIGH COURTS AND SLP BEFORE 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 THE 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 LIMITS GIVEN HEREUNDER: - SL. NO. APPEALS IN INCOME TAX MATTERS MONETARY LIMIT (IN RS.) 1. BEFORE APPELLATE TRIBUN AL 10,00,00/ - 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 CASE S IS TO BE DECIDED ON MERITS OF THE CASE. 12 APPEALS 6 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 INCOME IN RESPECT OF THE ISSUES AGAINST WHICH APPEAL IS INTENDED TO BE FILED (HEREINAFTER REFERRED TO AS 'DISPUTED ISSUES'). HOWEVER THE TAX WILL NOT INCLUDE ANY INTEREST THEREON, EXCEPT WHERE CHARGEABILITY OF INTEREST ITSELF IS IN DISPUTE. IN CASE THE CHARGEABILITY OF INT EREST IS THE ISSUE UNDER DISPUTE, THE AMOUNT OF INTEREST SHALL BE THE TAX EFFECT. IN CASES WHERE RETURNED LOSS IS REDUCED OR ASSESSED AS INCOME, THE TAX EFFECT WOULD INCLUDE NOTIONAL TAX 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 AGAINST. 5. THE ASSESSING OFFICER SHALL CALCULATE THE TAX EFFECT SEPARATELY FOR EVERY ASSESSMENT YEAR IN RESPECT OF THE DISPUTED ISSUES IN THE CASE OF EVERY ASSESSEE. LF, IN THE CASE OF AN ASSESSEE, THE DISPUTED 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 OF 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 EFFECT IS LESS THAN THE MONETARY LIMIT SPECIFIED IN PARA 3. IN OTHER WORDS, HENCEFORTH, APPEALS CAN BE FILED ONLY WITH REFERENCE TO THE TAX EFFECT IN THE RELEVANT ASSESSMENT YEAR. H OWEVER, 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 ASSESSMENT YEARS EVEN IF THE 'TAX E FFECT' IS LESS THAN THE PRESCRIBED MONETARY LIMITS IN ANY OF THE YEAR(S), IF IT IS DECIDED TO FILE APPEAL IN RESPECT OF THE YEAR(S) IN WHICH 'TAX EFFECT' EXCEEDS THE MONETARY LIMIT PRESCRIBED. IN CASE WHERE A COMPOSITE ORDER/ JUDGEMENT INVOLVES MORE THAN O NE 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 MONETARY LIMIT SPECIFIED ABOVE, THE COMMISSIONER OF INCOME - TAX SHALL SPECI FICALLY RECORD THAT 'EVEN THOUGH THE DECISION IS NOT ACCEPTABLE, APPEAL IS NOT BEING 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 PRESUMPTION TH AT THE INCOME - TAX DEPARTMENT HAS ACQUIESCED IN THE DECISION ON THE DISPUTED ISSUES. THE INCOME - TAX DEPARTMENT SHALL NOT BE PRECLUDED FROM FILING AN APPEAL AGAINST THE DISPUTED ISSUES IN THE CASE OF THE SAME ASSESSEE FOR ANY OTHER ASSESSMENT YEAR, OR IN THE CASE OF ANY 12 APPEALS 7 OTHER ASSESSEE FOR THE SAME OR ANY OTHER ASSESSMENT YEAR, IF THE TAX EFFECT EXCEEDS THE SPECIFIED 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 TRI BUNAL OR THE COURT ONLY ON THE GROUND THAT THE DEPARTMENT HAS IMPLICITLY ACCEPTED 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 SAME DISPUTED ISSUES. THE DEPARTMENTAL REPRESENTATIVES/COUNSELS MUST MAKE EVERY EFFORT TO BRING TO THE NOTICE OF THE TRIBUNAL OR THE COURT THAT THE APPEAL IN SUCH CASES WAS NOT FILED OR NOT ADMITTED ONLY FOR THE REASON OF T HE TAX EFFECT BEING LESS THAN THE SPECIFIED MONETARY LIMIT AND, THEREFORE, NO INFERENCE 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 CASES D O NOT HAVE ANY PRECEDENT VALUE. AS THE EVIDENCE OF NOT FILING APPEAL DUE TO THIS INSTRUCTION MAY HAVE TO BE PRODUCED IN COURTS, THE JUDICIAL FOLDERS IN THE OFFICE OF CSIT MUST BE MAINTAINED IN A SYSTEMIC MANNER FOR EASY RETRIEVAL. 8. ADVERSE JUDGMENTS REL ATING TO THE FOLLOWING ISSUES 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 AC T 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 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 SHALL NOT APPLY TO WRIT MATTERS AND DIRECT TAX MATTERS OTHER THAN INCOME TAX. FILING OF APPEALS IN OTHER DIRECT TAX MATTERS SHALL CONTINUE TO BE GOVERNE D BY RELEVANT PROVISIONS OF STATUTE & 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 U/S. 12A OF THE IT ACT, 1961, SHALL NOT BE G OVERNED BY THE LIMITS SPECIFIED IN PARA 3 ABOVE AND DECISION TO FILE APPEAL IN SUCH CASES MAY BE TAKEN ON MERITS OF A PARTICULAR CASE. 12 APPEALS 8 10. THIS INSTRUCTION WILL APPLY RETROSPECTIVELY TO PENDING APPEALS AND APPEALS TO BE FILED HENCEFORTH IN HIGH COURTS/ TR IBUNALS. 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 INSTRUCTIONS ON THIS SUBJECT, OPERATIVE AT THE TIME WHEN SUCH APPEAL WAS FILED. 11. THIS ISSUES UNDER SECTION 268A (1) OF THE INCOME - TAX ACT 1961. SD/ - ( D.S. CHAUDHRY) CIT(A&J), CBDT, NEW DELH 4. ACCORDINGLY, IN VIEW OF THE SAID CIRCULAR, ALL THE APPEAL S OF THE REVENUE ARE DISMISSED AS NOT MAINTAINABLE. 5 IN THE RESULT, THE APPEALS FILED BY THE REVENUE ARE DISMISSED ORDER PRONOUNCED IN THE OPEN COURT ON THIS 23 RD DAY OF DEC 2015 . SD/ - SD/ - (GEORGE GEORGE K ) ( B P JAIN ) JUDICIAL MEMBER ACCOUNTANT MEMBER COCHIN: DATED 23 RD DEC 2015 RAJ* 12 APPEALS 9 COPY TO: 1 . APPELLANT 2 . RESPONDENT 3 . CIT(A) 4 . CIT, 5 . DR 6 . GUARD FILE BY ORDER ASSIST ANT REGISTRAR ITAT, COCHIN