Income Tax Officer, Ward-2, Bongaigaon V. Subhkaran Bhura, Guwahati

ITA 224/GTY/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 4438 (ITAT-GUWAHATI)
• Duration Of Justice: 8 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-05-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2008-2009
• Appeal Filed On: 31-08-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANDEEP SENGUPTA
• Assessee Lawyers: PARTHA PRATIM CHAKRABORTY
• Keywords: Tax effect

Judgement Text

1 ITA NO.224/GAU/2018 SUBHKARAN BHURA, AY 2008-09 IN THE INCOME TAX APPELLATE TRIBUNAL GUWAH ATI BENCH, E COURT AT KOLKATA ( ) . . , . , ) [BEFORE SHRI A. T. VARKEY, JM & DR. A. L. SAINI, A M] I.T.A. NO. 224/GAU/2018 ASSESSMENT YEAR: 2008-09 INCOME-TAX OFFICER, WARD-2, BONGAIGAON. VS. SUBHKARAN BHURA (PAN: AHQPB5044G) APPELLANT RESPONDENT DATE OF HEARING 13.05.2019 DATE OF PRONOUNCEMENT 13.05.2019 FOR THE APPELLANT SHRI SANDEEP SENGUPTA, JCIT, DR FOR THE RESPONDENT SHRI PARTHA PRATIM CHAKRABORTY, ADVOCATE ORDER PER A.T.VARKEY, JM THIS IS AN APPEAL PREFERRED BY THE REVENUE AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS), GUWAHATI-2, GUWAHATI DATED 29 .06.2018 FOR AY 2008-09. 2. AT THE OUTSET ITSELF, THE LD. AR HAS BROUGHT TO OUR ATTENTION TO THE FACT THAT THE REVENUE HAS PREFERRED THIS APPEAL WHICH HAS TAX EFF ECT OF LESS THAN RS. 20 LACS, THEREFORE, THE REVENUES APPEAL IS NOT MAINTAINABLE IN THE LIGHT O F THE CBDT CIRCULAR NO.3/2018 DATED 11.07.2018 WHEREIN CBDT HAS DIRECTED AS UNDER: 3 . HENCEFORTH, APPEALS/ SLPS SHALL NOT BE FILED I N CASES WHERE THE TAX EFFECT DOES NOT EXCEED THE MONETARY LIMITS GIVEN HEREUNDER: 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 PRESCRIBED ABOVE. FILIN G OF APPEAL IN SUCH CASES IS TO BE DECIDED ON MERITS OF THE CASE. 2 ITA NO.224/GAU/2018 SUBHKARAN BHURA, AY 2008-09 4. FOR THIS PURPOSE, 'TAX EFFECT' MEANS THE DIFFERE NCE BETWEEN THE TAX ON THE TOTAL INCOME ASSESSED AND THE TAX THAT WOULD HAVE BEEN CHARGEABL E HAD SUCH TOTAL INCOME BEEN REDUCED BY THE AMOUNT OF INCOME IN RESPECT OF THE I SSUES AGAINST WHICH APPEAL IS INTENDED TO BE FILED (HEREINAFTER REFERRED TO AS 'D ISPUTED ISSUES). FURTHER, 'TAX EFFECT' SHALL BE TAX INCLUDING APPLICABLE SURCHARGE AND CES S. HOWEVER, THE TAX WILL NOT INCLUDE 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 LOSS IS REDUCED OR ASSESSED AS INCOME, THE TAX EFFECT WOULD INCLUDE NOTIONAL TAX ON DISPUTED ADDITIONS. I N CASE OF PENALTY ORDERS, THE TAX EFFECT WILL MEAN QUANTUM OF PENALTY DELETED OR REDUCED IN THE ORDER TO BE APPEALED AGAINST. 3. IN PARA-13 OF THE SAID CIRCULAR IT HAS FURTHER BEEN CLARIFIED THAT THE REVISED MONETARY LIMITS WILL APPLY RETROSPECTIVELY. THE RELEVANT PA RA-13 OF THE CIRCULAR READS THUS: 13. THIS CIRCULAR WILL APPLY TO SLPS/APPEALS/CROSS OBJECTIONS/REFERENCES TO BE FILED HENCEFORTH IN SC/HCS/TRIBUNAL AND IT SHALL ALSO APP LY RETROSPECTIVELY TO PENDING SLPS/APPEALS/CROSS OBJECTIONS/REFERENCES. PENDING A PPEALS BELOW THE SPECIFIED TAX LIMITS IN PARA 3 ABOVE MAY BE WITHDRAWN/NOT PRESSED. 4. IN THE PRESENT CASE, THE TAX EFFECT ON THE DIS PUTED ADDITION IN THIS APPEAL BY THE REVENUE IS LESS THAN RS.20,00,000/-. THOUGH THIS A PPEAL HAD BEEN FILED BY THE REVENUE ON 31.08.2018 AND WAS WITHIN THE MONETARY LIMIT IN THE FORM OF TAX EFFECT FOR FILING APPEAL BEFORE TRIBUNAL, IN VIEW OF PARA-13 OF THE CIRCULAR OF CBDT, EVEN SUCH APPEAL WILL BE GOVERNED BY THE NEW MONETARY LIMITS LAID DOWN IN TH E 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 COURT IN T HE CASE OF COMMISSIONER OF CUSTOMS VS INDIAN OIL CORPORATION LTD. REPORTED IN 267 ITR 272 WHEREIN THEIR LORDSHIPS EXAMINED THE EARLIER DECISIONS OF THE APEX COURT WITH REGARD TO BINDING NATURE OF THE CIRCULAR AND LAID DOWN THAT WHEN A CIRCULAR ISSUED BY THE BOARD REMAI NS IN OPERATION THEN THE REVENUE 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. 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 FO R RECALLING OF THIS ORDER. 3 ITA NO.224/GAU/2018 SUBHKARAN BHURA, AY 2008-09 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 CONTRARY TO TH E POLICY DECISION OF THE DEPARTMENT AND AS SUCH THE APPEAL FILED BY THE DEPARTMENT IS DISMI SSED IN LIMINE . 7. IN THE RESULT, THE APPEAL BY THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (DR. A. L. SAINI) (ABY. T. VARKEY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 13 TH MAY, 2019 JD.(SR.P.S.) COPY OF THE ORDER FORWARDED TO: 1. APPELLANT ITO, WARD-2, BONGAIGAON 2 RESPONDENT . SHRI SUBHKARAN BHURA, BABULAL JAIN & ASSOCIATES, CHARTERED ACCOUNTANTS, CHARU MARKET, SRCB ROAD, FAN CY BAZAR, GUWAHATI-781001. 3. 4. THE CIT(A), GUWAHATI-2, GUWAHATI. CIT , GUWAHATI 4. DR, ITAT, GUWAHATI BENCH, GUWAHATI / TRUE COPY, BY ORDER, ASSISTANT REGISTRAR