ITO, Ward - 4(1), Kolkata, Kolkata V. M/s. Royal Touch Fablon Pvt. Ltd., Kolkata

ITA 2238/KOL/2010

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 9251 (ITAT-KOLKATA)
• Duration Of Justice: 3 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-03-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2007-2008
• Appeal Filed On: 21-12-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B R PURKAYASTHA
• Assessee Lawyers: S M SURANA
• Keywords: Tax effect

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : KOLKATA [ () , , . .. . ! ! ! !. .. . , ,, , '# ] ]] ] [BEFORE HONBLE SRI MAHAVIR SINGH, JM & HONBLE S RI C. D. RAO, AM] % / I.T.A NO. 2238/KOL/2010 &' ()/ ASSESSMENT YEAR : 2007-08 INCOME TAX OFFICER/WARD- 4(1) -VS.- M/S. ROYAL TOUCH FABLON (P) LIMITED KOLKATA. KOLKATA [PAN : AABCR 5 842 F] [ +, /APPELLANT ] [ -.+,/ RESPONDENT ] +, / FOR THE APPELLANT : SHRI B. R. PURKAYASTHA -.+, / FOR THE RESPONDENT : SHRI S. M. SURANA '/ /ORDER . .. . ! ! ! !. .. . , ,, , '# PER C. D. RAO, A. M. THIS APPEAL FILED BY THE REVENUE IS PREFERRED AGAIN ST THE ORDER OF THE CIT(A)-IV, KOLKATA DATED 13.09.2010, PERTAINING TO ASSESSMEN T YEAR 2007-08. 2. THE GROUNDS OF APPEAL OF THE REVENUE READ AS UN DER :- 1. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE, LD . CIT(A), KOLKATA HAS ERRED IN LAW IN DELETING THE ADDITION MADE BY T HE A.O. WITH RESPECT TO THE PAYMENT OF PROVIDENT FUND (EMPLOYEES CONTRI BUTION) OF RS.2,62,319/- AND ON PAYMENT OF ESI (EMPLOYERS CON TRIBUTION) OF RS.38,279/-, ALTHOUGH THE PAYMENTS WERE DEPOSITED A FTER THE EXPIRY OF THE DUE DATE OF PAYMENTS. 2. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE, LD . CIT(A), KOLKATA HAS ERRED IN LAW IN DELETING THE ADDITION MADE BY T HE ASSESSING OFFICER UNDER THE HEADS OF GENERAL EXPENSES, TELEPHONE EXPE NSES AND TRAVELLING & CONVEYANCE EXPENSES TO TUNE OF RS.1,99 ,684/- ALTHOUGH ITA NO. 2238/KOL/20 10 2 CERTAIN PORTION OF THESE EXPENSES APPEAR TO BE NOT INCURRED WHOLLY FOR THE PURPOSE OF BUSINESS. 3. AT THE TIME OF HEARING THE LD. AUTHORISED REPRE SENTATIVE FOR THE ASSESSEE APPEARING ON BEHALF OF THE ASSESSEE SUBMITTED THAT IN THIS CASE THE TAX EFFECT IS BELOW RS. 2 LAKHS. 4. THE LD. DEPARTMENTAL REPRESENTATIVE APPEARING O N BEHALF OF THE REVENUE DID NOT RAISE ANY OBJECTION TO THE CONTENTION OF THE LD. AUTHORIS ED REPRESENTATIVE FOR THE ASSESSEE. 5. ADMITTEDLY THE TAX PAYABLE IN RESPECT OF GROUND OF APPEAL BY THE DEPARTMENT IS LESS THAN RS.2 LAKHS AS PER REVISED INSTRUCTION OF THE C BDT NO. 5/2008 DATED 15.05.2008 AND SINCE IN THE PRESENT CASE, THE ABOVE REVISED INSTRUCTION OF CBDT IS WELL APPLICABLE AND THEREFORE, IN OUR CONSIDERED OPINION, THE REVENUE SHOULD HAVE REF RAINED FROM FILING SECOND APPEAL BEFORE THE TRIBUNAL. IT WOULD BE APT TO QUOTE THE OBSERVATION OF THE DELHI HIGH COURT IN THE CASE OF CIT VS.- ITAT 232 ITR 207 AT PAGE 216 AS BELOW :- THE CENTRAL BOARD OF DIRECT TAXES INSTRUCTIONS ARE BINDING ON THE DEPARTMENT. IF THE CASE AT HAND IS COVERED BY A POL ICY LAID DOWN BY THE CENTRAL BOARD OF DIRECT TAXES IN THAT CASE NO FAULT CAN BE FOUND WITH THE ORDER OF THE TRIBUNAL REFUSING TO STATE THE CAS E AND THERE IS NO REASON WHY THE HIGH COURT SHOULD INTERFERE WITH SUC H DISCRETION OF THE TRIBUNAL AS HAS BEEN EXERCISED CONSISTENTLY WITH TH E UNIFORM POLICY LAID DOWN BY THE CENTRAL BOARD OF DIRECT TAXES WHICH BIN DS ALL THE SUBORDINATE AUTHORITIES OF THE INCOME TAX DEPARTMEN T. THE HIGH COURT WOULD NOT ORDINARILY ENCOURAGE BREACH OF POLICY DEC ISIONS AND THE DEPARTMENTAL INSTRUCTIONS WHICH HAVE A PUBLIC PURPO SE BEHIND THEM. VALUABLE TIME OF HIGH COURTS AND HIGHLY PLACED TRIB UNALS IS NOT TO BE WASTED ON PETTY MATTERS. 6. FURTHER, THE BOMBAY HIGH COURT HAS ALSO HELD IN THE CASE OF CIT VS.- CAMCO COLOUR LTD. (SUPRA) AND IN THE CASE OF PITHWA ENGINEERING WORKS REPORTED IN 276 ITR 519 MUMBAI THAT THE CIRCULAR IS BINDING ON THE REVENUE AND AN APPEAL OR REFERENCE CONTRARY TO THE INSTRUCTION ISSUED IN THE CIRCULAR WOULD NOT BE CONSIDERED BY T HE COURT. 6.1. WE FURTHER FIND THAT IT IS A SETTLED LAW THAT THE CIRCULARS ISSUED BY CBDT ARE BINDING ON THE REVENUE. THIS POSITION WAS CONFIRMED BY THE APE X COURT IN THE CASE OF COMMISSIONER OF CUSTOMS VS. INDIAN OIL CORPORATION LTD. REPORTED IN 267 ITR 272 WHEREIN THEIR LORDSHIPS EXAMINED THE EARLIER DECISIONS OF THE HONBLE APEX COURT WITH REGARD TO BINDING NATURE OF THE CIRCULAR AND LAID DOWN THAT WHEN A CIRCULAR ISSUED BY THE BOARD REMAINS IN OPERATION THEN THE ITA NO. 2238/KOL/20 10 3 REVENUE IS BOUND BY IT AND CANNOT BE ALLOWED TO PLE AD THAT IT IS NOT VALID OR THAT IT IS CONTRARY TO THE TERMS OF THE STATUTE. THE APPEAL UNDER CONSIDER ATION HAS CERTAINLY BEEN FILED CONTRARY TO THE CIRCULAR ISSUED BY THE CBDT INSTRUCTION NO.5 OF 200 8 DATED 15.05.2008. 6.2. IN VIEW OF THE ABOVE, WE HOLD THAT THE APPEAL FILED BY THE DEPARTMENT, AGAINST THE IMPUGNED ORDER OF THE LD. CIT(A), IS CONTRARY TO TH E POLICY DECISION OF THE DEPARTMENT AND AS SUCH THE APPEAL FILED BY THE DEPARTMENT IS DISMISSE D IN LIMINE . 7. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED. '/ #0' 1 0& 2 3 !# ORDER PRONOUNCED IN THE COURT ON 22. 03. 2011. SD/- SD/- [ , ] [ . .. . ! ! ! !. .. . , ,, , '# ] [ MAHAVIR SINGH ] [ C. D. RAO ] JUDICIAL MEMBER ACCOUNTANT MEMBER (!#) DATED : 22. 03. 2011. '/ 4 -5 6'5(/ COPY OF THE ORDER FORWARDED TO: 1. +, /APPELLANT- INCOME TAX OFFICER, WARD-4(1), P-7, C HOWRINGHEE SQUARE, AAYAKAR BHAWAN, 8 TH FLOOR, KOLKATA-700 069. 2 -.+, / RESPONDENT : M/S. ROYAL TOUCH FABLON (P) LTD., 4, SYNAGOGUE STREET, 2 ND FLOOR, ROOM NO.202, KOLKATA-700 001. 3. /&/ THE CIT, 4. /& ()/ THE CIT(A), KOLKATA. 5. <2 -&/ DR, KOLKATA BENCHES, KOLKATA [.5 -/ TRUE COPY ] '/&0/ BY ORDER , > /ASSTT. REGISTRAR. [KKC ?@ &A> B /SR.PS]