ITO, Rampur V. National Education Welfare Society, Rampur

ITA 2433/DEL/2011

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 7410 (ITAT-DELHI)
• Duration Of Justice: 5 year(s) 3 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-08-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 11-08-2016
• Assessment Year: 2007-2008
• Appeal Filed On: 12-05-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Audit objection; Retrospective amendment; Tax effect
• Section: 12A

Judgement Text

ITA NO. 2432, CO 180 & 2433, CO 181 NATIONAL EDUCATION WELFARE SOCIETY PAGE 1 OF 9 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH E, NEW DELHI BEFORE SHRI J.S. REDDY, ACCOUNTANT MEMBER AND SHRI SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER ITA NO. 2432/DEL/2011 ASSESSMENT YEAR: 2006-07 ITO WARD II, KOTHI KHAS BAGH, CIVIL LINES, RAMPUR. VS NATIONAL EDUCATION WELFARE SOCIETY, VILL, CHAMRAWA, RAMPUR (U.P.) PAN -- (APPELLANT) (RESPONDENT) CROSS OBJECTION NO. 180/DEL/2012 ASSESSMENT YEAR: 2006-07 NATIONAL EDUCATION WELFARE SOCIETY, C/O A.K. SINGHAL, ADVOCATE B-556, LAJPAT NAGAR MORADABAD. VS ITO WARD II, KOTHI KHAS BAGH, CIVIL LINES, RAMPUR. (APPELLANT) (RESPONDENT) & ITA NO. 2433/DEL/2011 ASSESSMENT YEAR: 2007-08 ITO WARD II, KOTHI KHAS BAGH, CIVIL LINES, RAMPUR. VS NATIONAL EDUCATION WELFARE SOCIETY, VILL, CHAMRAWA, RAMPUR (U.P.) PAN -- (APPELLANT) (RESPONDENT) ITA NOS. 2432, CO 180D & 2433, CO 181 NATIONAL EDUCATION WELFARE SOCIETY PAGE 2 OF 9 CROSS OBJECTION NO. 181/DEL/2012 ASSESSMENT YEAR: 2007-08 NATIONAL EDUCATION WELFARE SOCIETY, C/O A.K. SINGHAL, ADVOCATE B-556, LAJPAT NAGAR MORADABAD. VS ITO WARD II, KOTHI KHAS BAGH, CIVIL LINES, RAMPUR. APPELLANT BY: SH. RAJESH KUMAR, SR. DR RESPONDENT BY : SHRI RAJA KUMAR, ADV. DATE OF HEARING : 11.08.2016 DATE OF PRONOUNCEMENT : 24.08.2016 ORDER PER SUDHANSHU SRIVASTAVA, J.M. THE APPEALS ARE FILED BY THE REVENUE AND CROSS OBJE CTIONS BY THE ASSESSEE. THE APPEALS ARE DIRECTED AGAINST THE ORDE R PASSED BY THE LD. CIT (A) DATED 27.01.2011 FOR ASSESSMENT YEARS 2006-07 & 2007-08 RESPECTIVELY. 2. THE LD. COUNSEL FOR THE ASSESSEE STATED THAT THE TAX EFFECT IN THE DEPARTMENTAL APPEALS IS LESS THAN RS. 10 LAC S AND THEREFORE, THE REVENUE OUGHT NOT TO PRESS THESE APP EALS AS DIRECTED BY THE CBDTS LATEST CIRCULAR NO. 21/2015 DATED 10/12/2015. AS REGARDS TO THE CROSS OBJECTIONS, TH E LD. COUNSEL FOR THE ASSESSEE STATED THAT THEY HAVE THE INSTRUCT IONS TO WITHDRAW THESE CROSS OBJECTIONS. ITA NOS. 2432, CO 180D & 2433, CO 181 NATIONAL EDUCATION WELFARE SOCIETY PAGE 3 OF 9 3. THE LD. D.R., ALTHOUGH SUPPORTED THE ORDERS OF T HE ASSESSING OFFICER, BUT COULD NOT CONTROVERT THIS FA CT THAT TAX EFFECT IN THIS APPEAL IS LESS THAN RS.10,00,000/-. 4. IT IS NOTICED THAT SECTION 268A HAS BEEN INSERTE D BY THE FINANCE ACT, 2008 WITH RETROSPECTIVE EFFECT FROM 01 /04/99. THE PROVISIONS CONTAINED IN SECTION 268A READ AS UNDER: 268A. (1) THE BOARD MAY, FROM TIME TO TIME, ISSUE ORDERS, INSTRUCTIONS OR DIRECTIONS TO OTHER INCOME- TAX AUTHORITIES, FIXING SUCH MONETARY LIMITS AS IT MAY DEEM FIT, FOR THE PURPOSE OF REGULATING FILING OF A PPEAL OR APPLICATION FOR REFERENCE BY ANY INCOME-TAX AUTHORITY UNDER THE PROVISIONS OF THIS CHAPTER. (2) WHERE, IN PURSUANCE OF THE ORDERS, INSTRUCTIONS OR DIRECTIONS ISSUED UNDER SUB-SECTION (1), AN INCOME- TAX AUTHORITY HAS NOT FILED ANY APPEAL OR APPLICATI ON FOR REFERENCE ON ANY ISSUE IN THE CASE OF AN ASSESS EE FOR ANY ASSESSMENT YEAR, IT SHALL NOT PRECLUDE SUCH AUTHORITY FROM FILING AN APPEAL OR APPLICATION FOR REFERENCE ON THE SAME ISSUE IN THE CASE OF (A) THE SAME ASSESSEE FOR ANY OTHER ASSESSMENT YEAR; OR (B) ANY OTHER ASSESSEE FOR THE SAME OR ANY OTHER ASSESSMENT YEAR. (3) NOTWITHSTANDING THAT NO APPEAL OR APPLICATION F OR REFERENCE HAS BEEN FILED BY AN INCOME-TAX AUTHORITY PURSUANT TO THE ORDERS OR INSTRUCTIONS OR DIRECTION S ISSUED UNDER SUB-SECTION (1), IT SHALL NOT BE LAWFU L FOR AN ASSESSEE, BEING A PARTY IN ANY APPEAL OR REFEREN CE, TO CONTEND THAT THE INCOME-TAX AUTHORITY HAS ACQUIESCED IN THE DECISION ON THE DISPUTED ISSUE BY ITA NOS. 2432, CO 180D & 2433, CO 181 NATIONAL EDUCATION WELFARE SOCIETY PAGE 4 OF 9 NOT FILING AN APPEAL OR APPLICATION FOR REFERENCE I N ANY CASE. (4) THE APPELLATE TRIBUNAL OR COURT, HEARING SUCH APPEAL OR REFERENCE, SHALL HAVE REGARD TO THE ORDER S, INSTRUCTIONS OR DIRECTIONS ISSUED UNDER SUB-SECTION (1) AND THE CIRCUMSTANCES UNDER WHICH SUCH APPEAL OR APPLICATION FOR REFERENCE WAS FILED OR NOT FILED IN RESPECT OF ANY CASE. (5) EVERY ORDER, INSTRUCTION OR DIRECTION WHICH HAS BEEN ISSUED BY THE BOARD FIXING MONETARY LIMITS FOR FILING AN APPEAL OR APPLICATION FOR REFERENCE SHALL BE DEEMED TO HAVE BEEN ISSUED UNDER SUB-SECTION (1) AND THE PROVISIONS OF SUB-SECTIONS (2), (3) AND (4) SHALL APPLY ACCORDINGLY.] 5. IT IS NOT IN DISPUTE THAT THE BOARDS INSTRUCTIO NS OR DIRECTIONS ISSUED TO THE OTHER INCOME-TAX AUTHORITI ES ARE BINDING ON THOSE AUTHORITIES, THEREFORE, THE DEPART MENT OUGHT NOT TO HAVE FILED THE APPEAL IN VIEW OF THE ABOVE M ENTIONED SECTION 268A SINCE THE TAX EFFECT IN THE INSTANT CA SE IS LESS THAN THE AMOUNT PRESCRIBED FOR NOT FILING THE APPEAL. 6. IT IS NOTICED THAT THE CBDT HAS ISSUED CIRCULAR NO.21 OF 2015 DATED 10.12.2015, VIDE WHICH IT HAS REVISED TH E MONETARY LIMIT TO RS.10,00,000/- FOR NOT FILING THE APPEAL BEFORE THE TRIBUNAL. THE SAID CIRCULAR READ AS UNDER: SUBJECT : REVISION OF MONETARY LIMITS FOR FI LING OF APPEALS BY THE DEPARTMENT BEFORE INCOME TAX APPELLATE TRIBUNAL AND HIGH COURTS AND SLP BEFORE SUPREME COURT MEASURES FOR REDUCING LITIGATION REG . ITA NOS. 2432, CO 180D & 2433, CO 181 NATIONAL EDUCATION WELFARE SOCIETY PAGE 5 OF 9 REFERENCE IS INVITED TO BOARDS INSTRUCTION NO 5/20 14 DATED 10.07.2014 WHEREIN MONETARY LIMITS AND OTHER CONDITIONS FOR FILING DEPARTMENTAL APPEALS (IN INCO ME- TAX MATTERS) BEFORE APPELLATE TRIBUNAL AND HIGH COU RTS 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 AN D HIGH COURTS AND SLP BEFORE THE SUPREME COURT KEEPIN G IN VIEW THE MONETARY LIMITS AND CONDITIONS SPECIFIE D BELOW. 3. HENCEFORTH, APPEALS/ SLPS SHALL NOT BE FILED IN CASES WHERE THE TAX EFFECT DOES NOT EXCEED THE MONE TARY LIMITS GIVEN HEREUNDER: S . NO APPEALS IN INCOME -TAX MATTER MONETARY LIMIT (IN RS) 1 BEFORE APPELLATE TRIBUNAL 10,00,000/- 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 MONETA RY LIMITS PRESCRIBED ABOVE. FILING OF APPEAL IN SUCH C ASES IS TO BE DECIDED ON MERITS OF THE CASE. 4. FOR THIS PURPOSE, TAX EFFECT MEANS THE DIFFERE NCE BETWEEN THE TAX ON THE TOTAL INCOME ASSESSED AND TH E TAX THAT WOULD HAVE BEEN CHARGEABLE HAD SUCH TOTAL INCO ME 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). HOW EVER THE TAX WILL NOT INCLUDE ANY INTEREST THEREON, EXCE PT WHERE CHARGEABILITY OF INTEREST ITSELF IS IN DISPUT E. IN CASE THE CHARGEABILITY OF INTEREST IS THE ISSUE UND ER DISPUTE, THE AMOUNT OF INTEREST SHALL BE THE TAX EF FECT. IN ITA NOS. 2432, CO 180D & 2433, CO 181 NATIONAL EDUCATION WELFARE SOCIETY PAGE 6 OF 9 CASES WHERE RETURNED LOSS IS REDUCED OR ASSESSED AS INCOME, THE TAX EFFECT WOULD INCLUDE NOTIONAL TAX O N DISPUTED ADDITIONS. IN CASE OF PENALTY ORDERS, THE TAX EFFECT WILL MEAN QUANTUM OF PENALTY DELETED OR REDU CED IN THE ORDER TO BE APPEALED AGAINST. 5. THE ASSESSING OFFICER SHALL CALCULATE THE TAX EF FECT SEPARATELY FOR EVERY ASSESSMENT YEAR IN RESPECT OF THE DISPUTED ISSUES IN THE CASE OF EVERY ASSESSEE. IF, IN THE CASE OF AN ASSESSEE, THE DISPUTED ISSUES ARISE IN M ORE THAN ONE ASSESSMENT YEAR, APPEAL, CAN BE FILED IN R ESPECT OF SUCH ASSESSMENT YEAR OR YEARS IN WHICH THE TAX E FFECT IN RESPECT OF THE DISPUTED ISSUES EXCEEDS THE MONET ARY 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 ON LY WITH REFERENCE TO THE TAX EFFECT IN THE RELEVANT ASSESSMENT YEAR. HOWEVER, IN CASE OF A COMPOSITE OR DER OF ANY HIGH COURT OR APPELLATE AUTHORITY, WHICH INV OLVES MORE THAN ONE ASSESSMENT YEAR AND COMMON ISSUES IN MORE THAN ONE ASSESSMENT YEAR, APPEAL SHALL BE FILE D IN RESPECT OF ALL SUCH ASSESSMENT YEARS EVEN IF THE T AX EFFECT 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 MONET ARY LIMIT PRESCRIBED. IN CASE WHERE A COMPOSITE ORDER/ JUDGEMENT INVOLVES MORE THAN ONE 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 EFFEC T BEING LESS THAN THE MONETARY LIMIT SPECIFIED ABOVE, THE COMMISSIONER OF INCOME-TAX SHALL SPECIFICALLY RECOR D THAT EVEN THOUGH THE DECISION IS NOT ACCEPTABLE, A PPEAL IS NOT BEING FILED ONLY ON THE CONSIDERATION THAT T HE TAX EFFECT IS LESS THAN THE MONETARY LIMIT SPECIFIED IN THIS INSTRUCTION. FURTHER, IN SUCH CASES, THERE WILL BE NO ITA NOS. 2432, CO 180D & 2433, CO 181 NATIONAL EDUCATION WELFARE SOCIETY PAGE 7 OF 9 PRESUMPTION THAT 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 OTHER ASSESSEE FOR THE SAME OR ANY OTHER ASSESSMENT YEAR, IF THE TAX EFFECT EXCEEDS THE SPEC IFIED MONETARY LIMITS. 7. IN THE PAST, A NUMBER OF INSTANCES HAVE COME TO THE NOTICE OF THE BOARD, WHEREBY AN ASSESSEE HAS CL AIMED RELIEF FROM THE TRIBUNAL OR THE COURT ONLY ON THE G ROUND THAT THE DEPARTMENT HAS IMPLICITLY ACCEPTED THE DEC ISION OF THE TRIBUNAL OR COURT IN THE CASE OF THE ASSESSE E FOR ANY OTHER ASSESSMENT YEAR OR IN THE CASE OF ANY OTH ER ASSESSEE FOR THE SAME OR ANY OTHER ASSESSMENT YEAR, BY NOT FILING AN APPEAL ON THE SAME DISPUTED ISSUES. T HE 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 O R NOT ADMITTED ONLY FOR THE REASON OF THE TAX EFFECT BEIN G LESS THAN THE SPECIFIED MONETARY LIMIT AND, THEREFORE, N O INFERENCE SHOULD BE DRAWN THAT THE DECISIONS RENDER ED THEREIN WERE ACCEPTABLE TO THE DEPARTMENT. ACCORDIN GLY, THEY SHOULD IMPRESS UPON THE TRIBUNAL OR THE COURT THAT SUCH CASES DO NOT HAVE ANY PRECEDENT VALUE. AS THE EVIDENCE OF NOT FILING APPEAL DUE TO THIS INSTRUCTI ON MAY HAVE TO BE PRODUCED IN COURTS, THE JUDICIAL FOLDERS IN THE OFFICE OF CIT MUST BE MAINTAINED IN A SYSTEMIC MANN ER FOR EASY RETRIEVAL. 8. ADVERSE JUDGMENTS RELATING TO THE FOLLOWING ISSU ES SHOULD BE CONTESTED ON MERITS NOTWITHSTANDING THAT THE TAX EFFECT ENTAILED IS LESS THAN THE MONETARY LIMIT S SPECIFIED IN PARA 3 ABOVE OR THERE IS NO TAX EFFECT : (A) WHERE THE CONSTITUTIONAL VALIDITY OF THE PROVISIONS OF AN ACT OR RULE ARE UNDER CHALLENGE, OR ITA NOS. 2432, CO 180D & 2433, CO 181 NATIONAL EDUCATION WELFARE SOCIETY PAGE 8 OF 9 (B) WHERE BOARDS 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 MATT ERS OTHER THAN INCOME TAX. FILING OF APPEALS IN OTHER D IRECT TAX MATTERS SHALL CONTINUE TO BE GOVERNED BY RELEVA NT PROVISIONS OF STATUTE & RULES. FURTHER, FILING OF A PPEAL 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 UNDER SECTIO N 12A OF THE IT ACT, 1961, SHALL NOT BE GOVERNED BY T HE LIMITS SPECIFIED IN PARA 3 ABOVE AND DECISION TO F ILE APPEAL IN SUCH CASES MAY BE TAKEN ON MERITS OF A PARTICULAR CASE. 10. THIS INSTRUCTION WILL APPLY RETROSPECTIVELY TO PENDING APPEALS AND APPEALS TO BE FILED HENCEFORTH IN HIGH COURTS/ TRIBUNALS. PENDING APPEALS BELOW THE SPECIFIED TAX LIMITS IN PARA 3 ABOVE MAY BE WITHDRA WN/ NOT PRESSED. APPEALS BEFORE THE SUPREME COURT WILL BE GOVERNED BY THE INSTRUCTIONS ON THIS SUBJECT, OPERA TIVE AT THE TIME WHEN SUCH APPEAL WAS FILED. 11. THIS ISSUES UNDER SECTION 268A (1) OF THE INCOM E- TAX ACT 1961. 7. FROM CLAUSE 10 OF THE ABOVE CIRCULAR IT IS CLEAR THAT THESE INSTRUCTIONS ARE APPLICABLE TO THE PENDING APPEALS ALSO AND THERE IS CLEAR CUT INSTRUCTION TO THE DEPARTMENT TO WITHDRAW OR NOT TO PRESS THE APPEALS FILED BEFORE THE ITAT WHER EIN TAX EFFECT ITA NOS. 2432, CO 180D & 2433, CO 181 NATIONAL EDUCATION WELFARE SOCIETY PAGE 9 OF 9 IS LESS THAN RS.10,00,000/-. THESE INSTRUCTIONS ARE OPERATIVE RETROSPECTIVELY TO THE PENDING APPEALS. 8. KEEPING IN VIEW THE CBDT CIRCULAR NO.21 OF 2015 DATED 10.12.2015 AND ALSO THE PROVISIONS OF SECTION 268A OF INCOME TAX ACT, 1961, WE ARE OF THE VIEW THAT THE REVENUE S APPEALS WILL HAVE TO BE DISMISSED. 9. IT IS NOTICED THAT IN THE CROSS OBJECTIONS NO AP ECIFIC RELIEF HAS BEEN SOUGHT BY THE ASSESSEE. THESE CROSS OBJEC TION SUPPORT THE IMPUGNED ORDER OF THE LD. CIT (A). THEREFORE, THESE BECAME IN FRUCTUOUS WHEN THE APPEALS OF THE DEPARTMENT ARE DISMISSED. 10. IN THE FINAL RESULT, THE APPEALS FILED BY THE R EVENUE ARE HEREBY DISMISSED AND THE CROSS OBJECTIONS FILED BY THE ASS ESSEE ALSO STAND DISMISSED. ORDER PRONOUNCED IN THE COURT ON 24.08.2016 SD/- SD/- (J.S. REDDY) (SUD HANSHU SRIVASTAVA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 24/08/2016 *KAVITA ARORA COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITA NOS. 2432, CO 180D & 2433, CO 181 NATIONAL EDUCATION WELFARE SOCIETY PAGE 10 OF 9