The ITO, Ward-1(1), Bhavnagar V. Smt. Ashaben Nileshkumar Gupta, Bhavnagar

ITA 2662/AHD/2005

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 6587 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 3 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-04-2010
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 19-04-2010
• Assessment Year: 2000-2001
• Appeal Filed On: 21-12-2005
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Question of law; Difference of opinion; Tax effect

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, AHMEDABAD A BENCH, BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI N.S. SAINI, ACCOUNTANT MEMBER ITA NO.2662/AHD/2005 ASSESSMENT YEARS: 2000-2001 I.T.O., WARD-1(1), AAYKAR BHAVAN, NAKUBAUG, NEAR JASHONATH CIRCLE, BHAVNAGAR. V/S SMT. ASHABEN NILESHKUMAR GUPTA 12A, RADHAKRISHNA, ANJANESHWAR PARK, TILAKNAGAR, BHAVNAGAR. PAN NO. (APPELLANT) (RESPONDENT) FOR DEPT. : SHRI RAJA RAM SAH SR. DR, FOR ASSESSEE : SHRI DHIREN SHAH C.A. O R D E R PER SHRI N.S.SAINI, A.M. THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF LEARNED CIT(APPEALS)XIX, AHMEDABAD DATED 10.10.2005 FOR ASSESSMENT YEAR 2000 -2001 BY TAKING FOLLOWING GROUNDS. 1. THE LEARNED CIT(A) HAS ERRED ON FACTS IN DELETI NG THE ADDITION OF RS.50,000/- MADE ON ACCOUNT OF FIXED DEPOSIT WITHOU T CONSIDERING THE FACTS OF THE CASE. 2. THE LEARNED CIT(A) HAS ERRED ON FACTS IN DELETIN G THE PROTECTIVE ADDITION OF RS.1,15,000/- MADE ON ACCOUNT OF UNEXPL AINED INVESTMENT IN LAND AND RS.15,000/- IN KISAN VIKAS PATRA (KVP) WITHOUT CONSIDERING THE FACTS OF THE CASE, SINCE HER HUSBAN D CASE HAS NOT BEEN FINALISED. 2. BOTH THE PARTIES AGREED BEFORE US THAT THE LEARN ED COMMISSIONER OF INCOME TAX(APPEALS) HAS DELETED THE VARIOUS ADDITIONS MADE BY THE AO TOTALLING TO RS.1,80,000/- AND THEREFORE, THE TAX EFFECT IN THIS APPEAL IS BELOW RS.2,00,000/-. IN VIEW OF THE CBDT INSTRUCTION NO.2/2005 DATED 24-10- 2005, THE APPEAL FILED BY THE REVENUE IS NOT MAINTAINABLE. 2 3. THE HONBLE GUJARAT HIGH COURT IN THE CASE OF CI T V. CONCORD PHARMACEUTICALS REPORTED IN (2009) 317 ITR 395 (GUJ ) HAS FINALLY SETTLED THE ISSUE REGARDING TAX EFFECT CASES. HONBLE HIGH COURT IN THIS CASE HAS HELD AS UNDER:- 20. THERE IS ALSO DIFFERENCE OF OPINION AMONGST TH E COURTS WITH REGARD TO THE APPLICABILITY OF THE CIRCULAR. IF ON THE DATE OF FILING OF AN APPEAL, A CIRCULAR IS NOT IN FORCE OR CERTAIN EXCEPTIONS ARE NOT THERE OR MONETARY LIMIT IS LESS THAN WHAT WAS THERE AT THE TIME OF DECIDING TH IS APPEAL, IN SUCH CASES, THE TRIBUNAL WILL HAVE TO GIVE DUE WEIGHTAGE TO THE PRO VISIONS CONTAINED IN THE CIRCULAR PREVALENT ON THE DATE OF FILING OF APPEAL AND NOT ON THE DATE OF THE DECISION OF THE APPEAL. IN CIT V. CHHAGER PACKAGI NG & PLASTICS (P) LTD.,(2008) 214 CTR 389 (BOM), THE BOMBAY HIGH COUR T TOOK THE VIEW THAT CIRCULARS / INSTRUCTIONS ISSUED BY THE BOARD ARE AP PLICABLE ONLY PROSPECTIVELY AND IF THERE IS NO REFERENCE TO THEIR APPLICABILITY TO THE PENDING MATTERS, SUCH PENDING MATERS CANNOT BE DECIDED ON THE BASIS OF CI RCULARS / INSTRUCTIONS. IN CIT V. PITHWA ENGINEERING WORKS 276 ITR 519 (BOM), THE BOMBAY HIGH COURT TOOK THE VIEW THAT TAKING JUDICIAL NOTICE OF THE MONEY VALUE HAVING GONE DOWN AND COST OF LITIGATION EXPENSES HAVING GO NE UP AS WELL AS HUGE PENDENCY OF CASES, THE BOARD SHOULD EVOLVE A POLICY OF APPLYING THE CIRCULAR EVEN TO THE OLD REFERENCES WHICH ARE STILL UNDIVIDE D. THE DEPARTMENT SHOULD NOT HAVE PROCEEDED WITH THE APPEALS / REFERENCES WH EREIN THE TAX IMPACT IS MINIMAL, IRRESPECTIVE OF THEIR DATE OF FILING. 21. THERE IS NO DISPUTE ABOUT THE FACT THAT WHERE S UBSTANTIAL QUESTION OF LAW OF IMPORTANCE IS INVOLVED OR WHERE QUESTION OF LAW IS IMPORTANCE IS INVOLVED OR WHERE QUESTION OF LAW IS REPEATEDLY ARI SING OR WHERE THE ISSUE IS COVERED BY THE JUDGMENT OF TERRITORIAL HIGH COURT O R SUPREME COURT, THE TRIBUNAL WILL HAVE TO DECIDE THE APPEAL ON MERITS A ND IN TERMS OF THE LAW DECLARED BY THE SUPREME COURT OR BY THE TERRITORIAL HIGH COURT. HOWEVER, ON THIS GROUND THE MATTERS CANNOT BE REMANDED TO THE T RIBUNAL DIRECTING THE TRIBUNAL TO DECIDE THE SAME AFRESH. IF NO OBJECTIO NS ARE RAISED BY THE DEPARTMENTAL REPRESENTATIVE AT THE TIME OF HEARING OF THE APPEAL AGAINST THE APPLICABILITY OF THE CIRCULAR DESPITE THERE BEING A N EXCEPTION, THE DEPARTMENT HAS MISSED THE BUS AND SECOND INNING CANNOT BE GRAN TED FOR THAT PURPOSE. HOWEVER, IN MATTERS WHERE SUCH OBJECTIONS ARE RAISE D AND DESPITE THOSE OBJECTIONS OR WITHOUT DEALING WITH THOSE OBJECTIONS IF THE TRIBUNAL HAS DISMISSED THE APPEAL ONLY ON THE GROUND OF LOW TAX EFFECT IN SUCH MATTER, AN INDULGENCE IS REQUIRED TO BE SHOWN BY THIS COURT AN D FOR THIS LIMITED PURPOSES, THE DEPARTMENT IS PERMITTED TO MOVE AN AP PROPRIATE APPLICATION BEFORE THE TRIBUNAL FOR DECIDING THE APPEAL ON MERI TS. 22. WE ARE OF THE VIEW THAT SIMPLY BECAUSE THE APPE AL IS FILED BY THE DEPARTMENT IN CONTRAVENTION OF THE CIRCULAR THE TRI BUNAL IS NOT BOUND TO DECIDE THE APPEAL ON MERITS. DUE WEIGHTAGE SHOULD INVARIABLY BE GIVEN BY THE TRIBUNAL TO THE CIRCULAR ISSUED BY THE BOARD. EVEN OTHERWISE, THE NEWLY INSERTED PROVISIONS CONTAINED IN SECTION 268A(4) MA KE IT OBLIGATORY FOR THE TRIBUNAL TO CONSIDER SUCH CIRCULAR. IT IS NOT OPEN FOR THE DEPARTMENT TO CONTEND THAT CIRCULARS ARE INTERNAL MATTERS OF THE DEPARTMENT AND ASSESSEE 3 CANNOT OBJECT TO FILING OF AN APPEAL ON THE BASIS O F SUCH CIRCULAR. IT IS TRUE THAT FILING OF AN APPEAL IS A STATUTORY RIGHT BUT I T CAN CERTAINLY BE REGULATED BY THE BOARD BY ISSUANCE OF ORDERS, INSTRUCTIONS OR CI RCULARS. THIS WOULD NOT AMOUNT TO TAKING AWAY THE RIGHT OF FILING OF APPEAL OR THAT SUCH RIGHT IS PROHIBITED BY EXECUTIVE INSTRUCTIONS. SECTION 268A (1) OF THE ACT NOW RECOGNIZES SUCH RIGHT OF THE BOARD TO REGULATE THE FILING OF APPEAL OR APPLICATION BEFORE THE TRIBUNAL OR THE COURT. IT I S ALSO TRUE THAT WHEN THE HONBLE SUPREME COURT OR THE TERRITORIAL HIGH COURT HAVE DECLARED THE LAW ON A QUESTION, IT IS NOT OPEN TO THE TRIBUNAL TO DI RECT THAT THE CIRCULAR ISSUED BY THE BOARD PRESCRIBING THE MONETARY LIMIT SHOULD BE GIVEN EFFECT TO AND NOT THE DECISION OF HONBLE SUPREME COURT OR THE TERRIT ORIAL HIGH COURT. IT IS, HOWEVER, EQUALLY TRUE THAT THE TRIBUNALS ATTENTION MUST BE DRAWN BY THE DEPARTMENTAL REPRESENTATIVE TO SUCH DECISION OF THE HONBLE SUPREME COURT OR THE HIGH COURT. AN OBJECTION MUST BE RAISED BY THE DEPARTMENTAL REPRESENTATIVE. 23. CONSIDERING ALL THE AFORESAID ISSUES, WE DISMIS S ALL THESE TAX APPEALS RESERVING LIBERTY TO THE DEPARTMENT ONLY ON THOSE C ASES TO APPLY TO THE TRIBUNAL TO DECIDE THE APPEAL ON MERITS WHERE THE O BJECTIONS WERE RAISED BEFORE THE TRIBUNAL EITHER IN THE APPEAL MEMO OR AT THE TIME OF HEARING OF APPEAL RAISING A SPECIFIC CONTENTION THAT A PARTICU LAR APPEAL IS COVERED BY AN EXCEPTION AND DESPITE THIS OBJECTION THE TRIBUNAL H AS NOT DEALT WITH THE SAID CONTENTION AND DISMISSED THE APPEAL ON THE GROUND O F LOW TAX EFFECT. IT IS EXPECTED FROM THE TRIBUNAL TO CONSIDER THIS BROAD P ARAMETERS WHILE APPLYING THE RELEVANT CIRCULAR TO THE FATS OF THE CASE AT TH E TIME OF DECIDING APPEALS. 4. AT THE TIME OF HEARING BEFORE US, THE LD. DEPART MENTAL REPRESENTATIVE WAS SPECIFICALLY ASKED BY THE BENCH, WHETHER THIS APPEA L FALLS UNDER ANY OF THE EXCEPTIONS AS PROVIDED IN BOARDS INSTRUCTION NO.2/2005 DATED 24-10-2005, THE SUBJECT-MATTER OF THE APPEALS ARE COVERED BY ANY OF THE JUDGMENT OF J URISDICTIONAL HIGH COURT OR OF SUPREME COURT, ANY SUBSTANTIAL QUESTION OF LAW IS I NVOLVED OR NOT. THE LD DR STATED THAT IN THESE APPEALS THE ISSUES ARE FACTUAL AND DO ES NOT FALL IN ANY OF THE EXCEPTIONS AS PROVIDED BY BOARDS INSTRUCTION OR ANY OF THE CRITE RIA LAID DOWN BY THE HONBLE HIGH COURT IN THE CASE OF CONCORD PHARMACEUTICALS (SUPRA ). THE RELEVANT EXCEPTIONS AS PROVIDED IN BOARDS INSTRUCTION NO.1979/2000 DATED 27-03-2000 READS AS UNDER:- 3. ADVERSE JUDGMENTS RELATING TO THE FOLLOWING SHO ULD BE CONTESTED IRRESPECTIVE OF REVENUE EFFECT: (I) WHERE REVENUE AUDITED OBJECTION IN THE CASE HA S BEEN ACCEPTED B THE DEPARTMENT (II) WHERE THE BOARDS ORDER, NOTIFICATION, INSTRUC TION OR CIRCULAR IS THE SUBJECT-MATTER OF AN ADVERSE ORDER. (III) WHERE PROSECUTION PROCEEDINGS ARE CONTEMPLATE D AGAINST THE ASSESSEE. 4 (IV) WHERE THE CONSTITUTIONAL VALIDITY OF THE PROVI SIONS OF THE ACT ARE UNDER CHALLENGE. 5. WE FIND THAT THIS APPEAL RELATES TO LOW TAX EFFE CT AND COVERED BY THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CONCORD PH ARMACEUTICALS(SUPRA). RESPECTFULLY FOLLOWING CONCORD PHARMACEUTICALS (SUP RA), WE DISMISS THIS APPEAL OF THE REVENUE. 6. IN THE RESULT, REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE COURT AT THE CLOSE OF THE H EARING IN THE PRESENCE OF THE PARTIES ON THIS 19 TH DAY OF APRIL, 2010. SD/- SD/- (BHAVNESH SAINI) ( N.S. SAINI ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD; ON THIS 19 TH DAY OF APRIL 2010 PARAS* COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A)-XX, AHMEDABAD. 4. THE CIT. 5. THE DR, AHMEDABAD BENCH 6. THE GUARD FILE. BY ORDER, //TRUE COPY// ASSTT. REGISTRAR/ DEPUTY REGISTRAR ITAT, AHMEDABAD BENCHES, AHMEDABAD. DATE INITIALS 1. DRAFT DICTATED ON 19.04.2010 --------------- ---- 2. DRAFT PLACED BEFORE AUTHORITY 19.04.2010 ----- -------------- 3. DRAFT PROPOSED & PLACED 19.04.2010 ----------- -------- JM BEFORE THE SECOND MEMBER 4. DRAFT DISCUSSED/APPROVED 19.04.2010 ---------- --------- JM BY SECOND MEMBER 5. APPROVED DRAFT COMES TO P.S 19.04.2010 --------- ----------- 6. KEPT FOR PRONOUNCEMENT ON ---------------- --- ----------------- 7. FILE SENT TO THE BENCH CLERK 20.04.2010 ------- ------------- 8. DATE ON WHICH FILE GOES TO THE -------------- -- -------------------- 9. DATE OF DISPATCH OF ORDER ---------------- -- -------------------