ITO, Ward - 36(2), Kolkata, Kolkata V. Shiw Bhagwan & Sons, Kolkata

ITA 236/KOL/2011

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 48067 (ITAT-KOLKATA)
• Duration Of Justice: 2 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-04-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2005-2006
• Appeal Filed On: 11-02-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P C NAYAK
• Assessee Lawyers: V SURANA
• Keywords: Audit objection; Tax effect
• Section: 260A

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL BENCH: KOLKATA () BEFORE , /AND , . ! . '# ) [BEFORE HONBLE SRI MAHAVIR SINGH, JM & HONBLE SHR I C. D. RAO, AM] $ $ $ $ / I.T.A NO. 236/KOL/2011 %& '( %& '( %& '( %& '(/ // / ASSESSMENT YEAR: 2005-06 INCOME-TAX OFFICER, WD-36(2), KOLKATA VS SHIW BHA GWAN & SONS (PAN-AAVFS 0157 P) (*+ /APPELLANT ) (,-*+/ RESPONDENT ) FOR THE APPELLANT: SHRI P. C. NAYAK FOR THE RESPONDENT: SHRI V. SURANA '. / ORDER PER BENCH: THIS APPEAL BY REVENUE IS ARISING OUT OF THE ORDER OF CIT(A)-XX, KOLKATA IN APPEAL NO.372/CIT(A)-XX/WD-36(2)/07-08/KOL VIDE DATED 30.1 1.2010. THE ASSESSMENT WAS FRAMED BY ITO,WD-36(2), KOLKATA OF THE INCOME TAX ACT, 196 1 (HEREINAFTER REFERRED TO AS THE ACT) FOR ASSESSMENT YEAR 2005-06 VIDE HIS ORDER DATED 20 .12.2007. 2. THE APPEAL OF THE REVENUE IS DELAYED BY 3 DAYS A ND ITO, WD-36(2), KOLKATA HAS FILED AN APPLICATION STATING THE REASON FOR DELAY AS UNDER: THE DATE OF COMMUNICATION OF THE APPELLATE ORDER WA S 10.12.2010 AND LAST DATE FOR FILING APPEAL EXPIRED ON 08.02.2011. THE APPEA L TO ITAT COULD NOT BE FILED WITHIN THE LIMITATION DATE. THE DATE-WISE REASON F OR DELAY IN FILING APPEAL IS FURNISHED BELOW: DATE R E A S O N S 08.02.2011 TUESDAY SARASWATI PUJA (OFFICE HOLIDAY ) 09.11.2011 WEDNESDAY (PROCUREMENT OF FORM -35 ALO NG WITH STATEMENT OF FACTS AND GROUNDS OF 1 ST APPEAL) 10.11.2011 THURSDAY (PREPARATION OF PAPERS AND PR OCESSING) I EARNESTLY REQUEST YOU TO KINDLY CONDONE THE DELAY FOR ONE DAY ONLY AND ACCEPT THE APPEAL. 3. LD. COUNSEL FOR THE ASSESSEE FAIRLY CONCEDED THE POSITION THAT THE DELAY CAN BE CONDONED AND HE HAS NO OBJECTION FOR THE SAME. AS THE LD. C OUNSEL FOR THE ASSESSEE AGREED FOR CONDONATION OF DELAY, WE, IN VIEW OF ABOVE REASON S TATED BY THE ASSESSING OFFICER, CONDONE THE DELAY AND ADMIT THE APPEAL. ITA 236/K/2011 SHIW BHAGWAN & SONS A.Y. 05-06 2 4. AT THE OUTSET, IT WAS INFORMED BY LD. COUNSEL FO R THE ASSESSEE THAT TAX EFFECT IN THIS APPEAL IS BELOW THE PRESCRIBED MONETARY LIMITS FOR FILING OF APPEALS BEFORE ITAT AND OTHER SUPERIOR COURTS. IT SEEMS THAT THE REVENUES APPEA L, THE QUANTUM INVOLVED IS RS.5,76,960/- ON WHICH TAX EFFECT WILL BE RS.1,91,039/-. THE ONLY IS SUE NOW REMAINS BEFORE US IS THAT THE APPEAL OF THE REVENUE IS BELOW THE PRESCRIBED LIMIT OF TAX EFFECT IN VIEW OF THE BOARDS INSTRUCTION ISSUED FROM TIME TO TIME REVISING THE MONETARY LIMI TS FOR FILING OF APPEALS BY THE DEPARTMENT BEFORE ITAT AND OTHER SUPERIOR COURTS. THE APPEAL RELATES TO ASSESSMENT YEAR 2005-06 AND FILED BEFORE THE TRIBUNAL ON 11.02.2011. SINCE THI S APPEAL FILED ON 11.02.2011, THE SAME WILL BE COVERED BY INSTRUCTION NO. 5 OF 2008 ISSUED ON 15.5 .2008 I.E. THE REVISED MONETARY LIMIT FOR FILING OF APPEAL BEFORE ITAT, WHEREBY THE CBDT HAS FIXED THE LIMIT OF RS. 2 LACS. THE RELEVANT CIRCULAR ISSUED BY CBDT READS AS UNDER: INSTRUCTION NO.5/2008, DATED 15-5-2008 REFERENCE IS INVITED TO BOARDS INSTRUCTIONS NO.197 9 DATED 27.3.2000, NO.1985 DATED 29.6.2000, NO.6 OF 2003 DATED 17.7.2003, NO.1 9 OF 2003 DATED 23.12.2003, NO.5/2004 DATED 27.5.2004, NO.2/2005 DATED 24.10.20 05 AND NO.5/2007 DATED 16.7.2007, WHEREIN MONETARY LIMITS FOR FILING DEPAR TMENTAL APPEALS (IN INCOME TAX MATTERS) AND OTHER CONDITIONS WERE SPECIFIED, F OR FILING APPEALS BEFORE APPELLATE TRIBUNALS, HIGH COURTS AND SUPREME COURT. 2. IN SUPERSESSION OF THE ABOVE INSTRUCTION S, IT HAS BEEN DECIDED BY THE BOARD THAT DEPARTMENTAL APPEALS WILL BE FILED BEFORE APPE LLATE TRIBUNALS, HIGH COURTS AND SUPREME COURT AS PER MONETARY LIMITS AND CONDIT IONS SPECIFIED BELOW. 3. APPEALS WILL HENCEFORTH BE FILED ONLY IN CASES WHERE THE TAX EFFECT EXCEEDS MONETARY LIMITS GIVEN HEREUNDER:- SR.NO. APPEALS IN INCOME TAX MATTERS MONETARY LIMIT IN RS. 1. APPEAL BEFORE APPELLATE TRIBUNAL 2,00,000/- 2. APPEAL UNDER SECTION 260A BEFORE HIGH COURT 4,00,000/- 3. APPEAL BEFORE SUPREME COURT 10,00,000/- 4. FOR THIS PURPOSE, TAX EFFECT MEANS THE DIFFERENCE BETWEEN THE TAX ON THE TOTAL INCOME ASSESSEE AND THE TAX THAT WOULD HAVE B EEN CHARGEABLE HAD SUCH TOTAL INCOME BEEN REDUCED BY THE AMOUNT OF INCOME IN RESP ECT OF THE ISSUE AGAINST WHICH APPEAL IS INTENDED TO BE FILED (HEREAFTER REF ERRED TO AS DISPUTED ISSUES). HOWEVER, THE TAX WILL NOT INCLUDE ANY INTEREST THER EON. SIMILARLY, IN LOSS CASES NOTIONAL TAX EFFECT SHOULD BE TAKEN INTO ACCOUNT. I N THE CASES 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 TH E TAX SEPARATELY FOR EVERY ASSESSMENT YEAR IN RESPECT OF THE DISPUTED ISSUES I N THE CASE OF EVERY ASSESSEE. IF, ITA 236/K/2011 SHIW BHAGWAN & SONS A.Y. 05-06 3 IN THE CASE OF AN ASSESSEE, THE DISPUTED ISSUES ARI SE IN MORE THAN ONE ASSESSMENT YEAR, APPEAL SHALL BE FILED IN RESPECT OF SUCH ASSE SSMENT YEAR OR YEARS IN WHICH THE TAX EFFECT IN RESPECT OF THE DISPUTED ISSUES EX CEEDS THE MONETARY LIMIT SPECIFIED IN PARA 3. NO APPEAL SHALL BE FILED IN RESPECT OF A N ASSESSMENT YEAR OR YEARS IN WHICH THE TAX EFFECT IS LESS THAN THE MONETARY LIMI T SPECIFIED IN PARA 3. IN OTHER WORDS HENCEFORTH, APPEALS WILL BE FILED ONLY WITH R EFERENCE TO THE TAX EFFECT IN THE RELEVANT ASSESSMENT YEAR. HOWEVER, IN CASE OF A COM POSITE ORDER OF ANY HIGH COURT OR APPELLATE AUTHORITY, WHICH INVOLVES MORE T HAN ONE YEAR, APPEAL SHALL BE FILED IN RESPECT OF ALL ASSESSMENT YEARS EVEN IF TH E TAX EFFECT IS LESS THAN THE PRESCRIBED MONETARY LIMITS IN ANY OF THE YEAR(S), I F IT IS DECIDED TO FILE APPEAL IN RESPECT OF THE YEAR(S) IN WHICH THE TAX EFFECT EX CEEDS THE MONETARY LIMIT PRESCRIBED. 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 MONET ARY LIMIT SPECIFIED ABOVE, THE COMMISSIONER OF INCOME-TAX SHALL SPECIFICALLY RECOR D THAT EVEN THOUGH THE DECISION IS NOT ACCEPTABLE, APPEAL IS NOT BEING FIL ED ONLY ON THE CONSIDERATION THAT THE TAX EFFECT IS LESS THAN THE MONETARY LIMIT SPEC IFIED IN THIS INSTRUCTION. FURTHER, IN SUCH CASES, THERE WILL BE NO PRESUMPTION THAT TH E INCOME-TAX DEPARTMENT HAS ACQUIESCED IN THE DECISION ON THE DISPUTED ISSUES I N THE CASE OF THE SAME ASSESSEE FOR ANY OTHER ASSESSMENT YEAR, OR IN THE CASE OF AN Y OTHER ASSESSEE FOR THE SAME OR ANY OTHER ASSESSMENT YEAR, IF THE TAX EFFECT EXCEED S 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 ASS ESSMENT YEAR, BY NOT FILING AN APPEAL ON THE SAME DISPUTED ISSUES. THE DEPARTMENTA L REPRESENTATIVES/ COUNSEL MUST MAKE EVERY EFFORT TO BRING TO THE NOTICE OF TH E TRIBUNAL OR THE COURT THAT THE APPEAL IN SUCH CASES WAS NOT FILED OR NOT ADMITTED ONLY BY REASON OF THE TAX EFFECT BEING LESS THAN THE SPECIFIED MONETARY LIMIT AND TH EREFORE, NO INFERENCE SHOULD BE DRAWN THAT THE DECISIONS RENDERED THEREIN WERE ACCE PTABLE TO THE DEPARTMENT. ACCORDINGLY, THEY SHOULD IMPRESS UPON THE TRIBUNAL OR THE COURT THAT SUCH CASES DO NOT HAVE ANY PRECEDENT VALUE. 8. ADVERSE JUDGMENTS RELATING TO THE FOLLOWING SHOU LD BE CONTESTED IRRESPECTIVE OF THE TAX EFFECT. A) WHERE THE CONSTITUTIONAL VALIDITY OF THE PROVISIONS OF AN ACT OR RULE ARE UNDER CHALLENGE. B) WHERE BOARDS ORDER, NOTIFICATION, INSTR UCTION OR CIRCULAR HAS BEEN HELD TO BE ILLEGAL OR ULTRAVIRES. C) WHERE REVENUE AUDIT OBJECTION IN THE CASE HAS BEEN ACCEPTED BY THE DEPARTMENT. 9. THE PROPOSAL FOR FILING SPECIAL LEAVE UNDER ARTI CLE 136 OF THE CONSTITUTION BEFORE THE SUPREME COURT SHOULD, IN ALL CASES, BE S ENT TO THE DIRECTORATE OF INCOME TAX (LEGAL AND RESEARCH) NEW DELHI AND THE D ECISION TO FILE SPECIAL LEAVE PETITION SHALL BE IN CONSULTATION WITH THE MI NISTRY OF LAW AND JUSTICE. ITA 236/K/2011 SHIW BHAGWAN & SONS A.Y. 05-06 4 10. THE MONETARY LIMITS SPECIFIED IN PARA 3 A BOVE WILL NOT APPLY TO WRIT MATTERS. 11. THIS INSTRUCTION WILL APPLY TO APPEALS FI LED ON OR AFTER 15TH OF MAY 2008. HOWEVER, THE CASES WHERE APPEALS HAVE BEEN FILED BE FORE 1 5TH OF MAY 2008 WILL BE GOVERNED BY THE INSTRUCTIONS ON THIS SUBJECT, OP ERATIVE AT THE TIME WHEN SUCH APPEAL WAS FILED. 12. THIS ISSUES UNDER SECTION 268(1) OF THE INCOME TAX ACT, 1961. ON QUERY FROM THE BENCH, THE LD. DR COULD NOT POINT OUT ANY OF THE EXCEPTIONS AS PROVIDED IN THE CIRCULAR AS UNDER: (A) THAT THIS IS A LOSS CASE HAVING TAX EFFECT MOR E THAN THE PRESCRIBED LIMIT, WHICH SHOULD BE TAKEN INTO ACCOUNT, (B) THAT THIS IS A COMPOSITE ORDER FOR MANY ASSESS MENT YEARS WHERE TAX EFFECT WILL BE MORE THAN THE PRESCRIBED LIMIT AS PER PARA 5 OF A BOVE INSTRUCTIONS, (C) THAT THERE IS OTHER YEAR PENDING AS DISPUTED O N THE SINGULAR ISSUE, (D) THAT IN THE CASE OF REVENUE, WHERE CONSTITUTIONAL V ALIDITY OF THE PROVISIONS OF THE ACT OR I.T. RULES 1962 ARE UNDER CHALLENGE , (E) THAT BOARDS ORDER, NOTIFICATION, INSTRUCTION OR CIRCULAR HAS BEEN HELD TO BE ILLEGAL OR ULTRA VIRES, (F) THAT REVENUE AUDIT OBJECTION IN THE CASE HAS BEEN A CCEPTED BY THE DEPARTMENT AND THE SAME IS UNDER CHALLENGE. THE LD. DR COULD NOT POINT OUT ANY OF THE EXCEPTION S AS PROVIDED ABOVE. ACCORDINGLY, THIS BEING A TAX EFFECT CASE, WE DISMISS THE APPEAL OF T HE REVENUE IN LIMINE WITHOUT GOING INTO MERITS AND AS UNADMITTED. 5. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. 6. ORDER PRONOUNCED IN OPEN COURT. SD/- SD/- . ! ! ! ! . '# , (C. D. RAO) (MAHAVIR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER ( !# !# !# !#) )) ) DATED 19 TH DAY OF APRIL, 2011 /0 %12 3 JD.(SR.P.S.) ITA 236/K/2011 SHIW BHAGWAN & SONS A.Y. 05-06 5 '. 4 , 5''6- COPY OF THE ORDER FORWARDED TO: 1 . *+ / APPELLANT ITO, WARD-36(2), KOLKATA. . 2 ,-*+ / RESPONDENT M/S. SHIW BHAGWAN & SONS, 38, ARMENI AN STREET, KOLKATA-700 001. 3 . .% / THE CIT(A), KOLKATA 4. .% ( )/ CIT, KOLKATA 5 . => ,% / DR, KOLKATA BENCHES, KOLKATA - ,/ TRUE COPY, '.%?/ BY ORDER, 2 /ASSTT. REGISTRAR .