ITO, New Delhi V. M/s. Jai Prakash & Sons, New Delhi

ITA 2334/DEL/2012

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 61802 (ITAT-DELHI)
• Duration Of Justice: 2 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-07-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2003-2004
• Appeal Filed On: 16-05-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DK MISHR A
• Keywords: Gift; Block assessment; Tax effect
• Section: 260A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH `D : NEW DELHI) BEFORE SHRI U.B.S. BEDI, JUDICIAL MEMBER AND SHRI A.N. PAHUJA, ACCOUNTANT MEMBER ITA NOS.2332, 2333, 2334 & 2335/DEL./2012 (ASSESSMENT YEARS : 2001-02, 02-03, 03-04 & 04- 05) ITO, WARD 28(3), VS. JAI PRAKASH & SONS, NEW DELHI 6635, GALI ARYA SAMAJ, NAYA BANS, NEW DELHI. (PAN/GIR NO.AAAFJ3656M) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI PIYUSH KAUSHIK, ADV. REVENUE BY : SHRI D.K. MISHRA, .DR ORDER PER BENCH: THESE FOUR APPEALS OF THE DEPARTMENT ARE DIRECTED A GAINST THE DIFFERENT ORDERS PASSED BY THE CIT (A)-XXV, NEW DELHI, ALL DATED 29 .03.2012, RELEVANT TO ASSESSMENT YEARS 2001-02, 02-03, 03-04 & 04-05. 2. AT THE VERY OUTSET, LD.COUNSEL FOR THE ASSESSEE SUBMITTED THAT TAX EFFECT IN EACH OF THESE APPEALS OF THE REVENUE IS LESS THAN THE LIMIT PRESCRIBED BY THE CBDT IN INSTRUCTION NO.3 OF 2011 DATED 9.2.2011. THEREFORE, APPEALS OF THE REVENUE ARE NOT MAINTAINABLE WHICH SHOULD BE DISMISSED. 3. LD.DR COULD NOT CONTROVERT THIS FACTUAL ASPECT, BUT PLEADED THAT SINCE THE APPEALS HAVE BEEN FILED BY THE DEPARTMENT, THEREFORE, THESE SHOULD BE DISPOSED OF ON MERITS EVEN THOUGH THESE APPEALS DO NOT FALL WITHIN THE EXCEPTI ONS PROVIDED IN THE SAID INSTRUCTIONS OF THE CBDT. I.T.A. NOS.2332,2333,2334 & 2335/DEL./12 (A.YS. : 2001-02,02-03,03-04 & 04-05) 2 4. WE HAVE HEARD BOTH THE SIDES, CONSIDERED THE MAT ERIAL ON RECORD AND FIND THAT THE TAX EFFECT IN EACH OF THESE CASES IS UNDISPUTEDLY LESS THAN THE LIMIT PRESCRIBED BY INSTRUCTION NO. 3/2011 AND ISSUE IS ALSO FOUND TO B E COVERED BY VARIOUS ITAT DECISIONS INCLUDING THAT OF ITAT DELHI BENCH IN CASE OF SHRI VIKRAM BHATNAGAR ITA NO. 60/D/2002, ORDER DATED 10.3.2006. 5. FURTHER HONBLE BOMBAY HIGH COURT IN THE CASE OF PITHWA ENGG. WORKS (276 ITR 519), HAVE OBSERVED AS UNDER :- ONE FAILS TO UNDERSTAND HOW THE REVENUE CAN CONTEN D THAT SO FAR AS NEW CASES ARE CONCERNED, THE CIRCULAR ISSUED BY THE BOA RD IS BINDING ON THEM AND IN COMPLIANCE WITH THE SAID INSTRUCTIONS, THEY DO NOT FILE REFERENCES IF THE TAX EFFECT IS LESS THAN RS. 2 LAKHS. BUT THE SA ME APPROACH IS NOT ADOPTED WITH RESPECT TO THE OLD REFERRED CASES EVEN IF THE TAX EFFECT IS LESS THAN RS. 2 LAKH. IN OUR VIEW, THERE IS NO LOGIC BEH IND THIS APPROACH. THIS COURT CAN VERY WELL TAKE JUDICIAL NOTICE OF TH E FACT THAT BY PASSAGE OF TIME MONEY VALUE HAS GONE DOWN, THE COST OF LITIGAT ION EXPENSES HAS GONE UP, THE ASSESSEES ON THE FILE OF THE DEPARTMENTS HA VE INCREASED; CONSEQUENTLY, THE BURDEN ON THE DEPARTMENT ALSO INC REASED TO A TREMENDOUS EXTENT. THE CORRIDORS OF THE SUPERIOR CO URTS ARE CHOKED WITH HUGE PENDENCY OF CASES. IN THIS VIEW OF THE MATTER, THE BOARD HAS RIGHTLY TAKEN A DECISION NOT TO FILE REFERENCES IF THE TAX EFFECT IS LESS THAN RS. 2 LAKHS. THE SAME POLICY FOR OLD MATTERS NEEDS TO BE ADOPTED BY THE DEPARTMENT. IN OUR VIEW, THE BOARDS CIRCULAR DATED MARCH, 27, 2000 IS VERY MUCH APPLICABLE EVEN TO THE OLD REFERENCES WHI CH ARE STILL UNDECIDED. THE DEPARTMENT IS NOT JUSTIFIED IN PROCEEDING WITH THE OLD REFERENCES WHEREIN THE TAX IMPACT IS MINIMAL. THUS, THERE IS N O JUSTIFICATION TO PROCEED WITH DECADES OLD REFERENCES HAVING NEGLIGIB LE TAX EFFECT. 6. IT IS ALSO SEEN THAT RECENTLY THE HONBLE JURISD ICTIONAL HIGH COURT VIDE THEIR ORDER DATED 1.8.2007 IN ITA NO. 683/2007 IN THE CASE OF C IT V. MANISH BHAMBRI HAS UPHELD THE ORDER OF TRIBUNAL VIDE WHICH THE APPEAL FILED B Y THE REVENUE WAS REFUSED TO BE ENTERTAINED BECAUSE OF LOW TAX EFFECT. THE SAID ORD ER OF HONBLE JURISDICTIONAL HIGH COURT IS REPRODUCED BELOW FOR THE SAKE OF CONVENIEN CE :- THE REVENUE IS AGGRIEVED BY AN ORDER DATED 8 TH AUGUST, 2006 PASSED BY THE INCOME TAX APPELLATE TRIBUNAL, DELHI BENCH D IN IT(SS) NO. 513/DEL/2003 RELEVANT FOR THE BLOCK PERIOD 1 ST APRIL, 1990 TO 14 TH FEBRUARY, 2001. I.T.A. NOS.2332,2333,2334 & 2335/DEL./12 (A.YS. : 2001-02,02-03,03-04 & 04-05) 3 THE QUESTION THAT AROSE BEFORE THE ASSESSING OFFICE R WAS WITH REGARD TO CERTAIN DEPOSITS IN THE BANK ACCOUNT OF T HE ASSESSEE AND SINCE THE AMOUNTS WERE NOT EXPLAINED, TAX WAS LEVIED. IN APPEAL, THE COMMISSIONER OF INCOME TAX (APPEALS) ACCEPTED THE VIEW CANVASSED BY THE ASSESSEE AND HELD THAT THE EXPLANA TION GIVEN BY HIM WAS ACCEPTABLE AND, IN ANY CASE, THE ASSESSEE CANNOT BE EXPECTED TO RECOLLECT EACH AND EVERY ENTRY MADE IN THE BANK. IT MAY BE MENTIONED THAT THE AMOUNT IN DISPUTE IS R S. 30,000/- FOR THE ASSESSMENT YEAR 1999-2000, AND RS. 83,000/- FOR THE ASSESSMENT YEAR 2001-2002. IT MAY ALSO BE MENTIONED THAT FOR THE AS SESSMENT YEAR 1999- 2000, THE ASSESSING OFFICER HAS ALREADY ACCEPTED TH E EXPLANATION WITH REGARD TO A GIFT OF RS. 60,000/- AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS), AN APPEAL WAS FILED BEFORE THE INCOME TAX APPELLATE TRIBUNAL. THE TRIBUNAL FOUND THAT IN VIEW OF INSTRUCTIONS ISSUED BY THE CBDT WHERE THE TAX EFFECT IS LESS THAN RE. 1 LAKH. THE DEPARTMENT SHOULD NOT FILE AN APPEAL BEFORE THE TRIBUNAL. IN THE PRESENT CASE THE TAX EFFECT IS LESS THAN RE. 1 LAKH. UNDER THE CIRCUMSTANCES, THE TRIBUNAL D ID NOT ENTERTAIN THE APPEAL. THE REVENUE, FEELING AGGRIEVED BY THE DECISION OF T HE TRIBUNAL, HAS COME UP BEFORE US UNDER SECTION 260A OF THE INC OME TAX ACT, 1961. IT IS CONTENDED BY LEARNED COUNSEL FOR THE REVENUE THAT THE TRIBUNAL IS A FACT FINDING AUTHORITY AND SHOULD HAVE ADJUDICATED THE MATTER ON MERITS. WE ARE OF THE VIEW THAT THE ISSUE RAISED BY THE REV ENUE IS NOT AT ALL SUBSTANTIAL AND THE AMOUNT IN DISPUTE IS QUITE INSI GNIFICANT, CONSIDERING THAT THE CASE IS ONE OF A BLOCK ASSESSMENT. THERE I S NO JUSTIFICATION FOR THE INCOME TAX DEPARTMENT TO GO ON BURDENING THE TRIBUN AL, THE COURT WITH EVERY CASE RIGHT UP TO THE END. APART FROM BURDENI NG THE TRIBUNAL AND COURTS, IT ALSO CAUSES AVOIDABLE EXPENSES TO THE AS SESSEE. IT IS COMMON KNOWLEDGE THAT THE ASSESSEE HAS TO PAY FOR LEGAL FE ES AND MERELY BECAUSE THE INCOME TAX DEPARTMENT HAS GOT UNLIMITED RESOURC ES, THERE IS NO JUSTIFICATION THAT EVERY CASE SHOULD BE DRAGGED ON. UNDER THE CIRCUMSTANCES, WE ARE OF THE VIEW THAT TH E TRIBUNAL WAS JUSTIFIED IN REFUSING TO ENTERTAIN THE APPEAL BECAU SE OF THE INSIGNIFICANT AMOUNT INVOLVED IN THE MATTER. NO SUBSTANTIAL QUES TION OF LAW ARISES. WE, THEREFORE, DISMISS THIS APPEAL. I.T.A. NOS.2332,2333,2334 & 2335/DEL./12 (A.YS. : 2001-02,02-03,03-04 & 04-05) 4 7. SINCE, TAX EFFECT IS LESS THAN THE LIMIT PRESCRI BED, SO IN VIEW OF THE INSTRUCTIONS AND PRECEDENTS OF COURTS AS CITED ABOVE INCLUDING THAT OF DELHI HIGH COURT, THE APPEALS ARE HELD TO BE NOT MAINTAINABLE, AS SUCH, ARE DISMISSED . 8. AS A RESULT, ALL THE APPEALS FILED BY THE DEPART MENT ARE DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 19.07.2012. SD/- SD/- (A.N. PAHUJA) ACCOUNTANT MEMBER (U.B.S. BEDI ) JUDICIAL MEMBER DATED : JULY 19, 2012 SKB COPY OF THE ORDER FORWARDED TO:- 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A)-XXV, NEW DELHI. 5. CIT(ITAT) DEPUTY REGISTRAR, ITAT I.T.A. NOS.2332,2333,2334 & 2335/DEL./12 (A.YS. : 2001-02,02-03,03-04 & 04-05) 5