ITO, Bulandshahr V. Sri Virendra Singh, Bulandshahr

ITA 2946/DEL/2010

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 7202 (ITAT-DELHI)
• Duration Of Justice: 5 year(s) 7 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-01-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: H
• Next Hearing Date: 28-01-2016
• Assessment Year: 2003-2004
• Appeal Filed On: 11-06-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJIV RANKA
• Keywords: Audit objection; Retrospective amendment; Tax effect
• Section: 12A

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES H NEW DELHI BEFORE SHRI R.S. SYAL, ACCOUNTANT MEMBER AND SHRI SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER I.T.A. NO. 2946/DEL/2010 ASSESSMENT YEAR: 2003-04 INCOME TAX OFFICER, VS VIRENDRA SING H, WARD -4, S/O SHRI TEJ SINGH, AAYKAR BHAWAN, VILL-JHANJHR, TEACHERS COLONY, DISTT. BULANDSHAHR BULANDSHAHR. (PAN: AVEPS8583K) (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI RAJIV RANKA , SR. DR RESPONDENT BY: NONE DATE OF HEARING: 28.01.2016 DATE OF PRONOUNCEMENT: PER SUDHANSHU SRIVASTAVA, JM THIS APPEAL HAS BEEN PREFERRED BY THE REVENUE AGAIN ST THE ORDER OF LEARN ED CIT (A) MEERUT FOR ASSESSMENT YEAR 2003-04. 2. DURING THE COURSE OF HEARING, THE LD. DR, ALTHOU GH SUPPORTED THE ORDER OF THE ASSESSING OFFICER, BUT COULD NOT C ONTROVERT THE FACT THAT TAX EFFECT INVOLVED IN THE APPEAL IS LESS THAN RS.10,00,000/-. 3. NONE APPEARED FOR THE ASSESSEE. I.T.A. NO. 2946/DEL/2010 ASSESSMENT YEAR 2003-04 2 4. AFTER CONSIDERING THE SUBMISSIONS OF THE LD. D.R . AND THE MATERIAL ON RECORD, IT IS NOTICED THAT SECTION 268A HAS BEEN INSERTED BY THE FINANCE ACT, 2008 WITH RETROSPECTIVE EFFECT FROM 01.04.1999, READING 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 APPEAL OR APPLICATION FOR REFERENCE BY ANY INCOME-TAX AUTHORI TY 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 APPLICATION F OR REFERENCE ON ANY ISSUE IN THE CASE OF AN ASSESSEE F OR ANY ASSESSMENT YEAR, IT SHALL NOT PRECLUDE SUCH AUTHORI TY 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 REFERENCE, TO CONTEND THAT THE INCOME-TAX AUTHORITY HAS ACQUIESCE D IN THE DECISION ON THE DISPUTED ISSUE BY NOT FILING AN APPEAL OR APPLICATION FOR REFERENCE IN 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 I.T.A. NO. 2946/DEL/2010 ASSESSMENT YEAR 2003-04 3 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 FILI NG 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 A PPLY ACCORDINGLY.] 5. PURSUANT TO THE MANDATE OF SECTION 268A, THE CBD T HAS ISSUED CIRCULAR NO. 21 OF 2015 DATED 10.12.2015, REVISING THE MONETARY LIMIT TO RS.10,00,000/- FOR NOT FILING APPEALS BEF ORE THE TRIBUNAL. THE SAID CIRCULAR READS AS UNDER: SUBJECT : REVISION OF MONETARY LIMITS FOR FI LING OF APPEALS BY THE DEPARTMENT BEFORE INCOME TAX APPEL LATE TRIBUNAL AND HIGH COURTS AND SLP BEFORE SUPREME COU RT MEASURES FOR REDUCING LITIGATION REG. 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 COURTS 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 AND HIGH COURTS AND SLP BEFORE THE SUPREME COURT KEEPING IN VIEW TH E MONETARY LIMITS AND CONDITIONS SPECIFIED BELOW. 3. HENCEFORTH, APPEALS/ SLPS SHALL NOT BE FILED IN CASES WHERE THE TAX EFFECT DOES NOT EXCEED THE MONETARY L IMITS GIVEN HEREUNDER: I.T.A. NO. 2946/DEL/2010 ASSESSMENT YEAR 2003-04 4 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 CASES 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 I SSUES AGAINST WHICH APPEAL IS INTENDED TO BE FILED (HEREI NAFTER REFERRED TO AS DISPUTED ISSUES). HOWEVER THE TAX WILL NOT INCLUDE ANY INTEREST THEREON, EXCEPT WHERE CHARGEAB ILITY OF INTEREST ITSELF IS IN DISPUTE. IN CASE THE CHARGEAB ILITY OF INTEREST IS THE ISSUE UNDER DISPUTE, THE AMOUNT OF INTEREST SHALL BE THE TAX EFFECT. IN CASES WHERE RETURNED LO SS IS REDUCED OR ASSESSED AS INCOME, THE TAX EFFECT WOULD INCLUDE NOTIONAL TAX ON DISPUTED ADDITIONS. IN CASE OF PENA LTY 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 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 MORE T HAN ONE ASSESSMENT YEAR, APPEAL, CAN BE FILED IN RESPECT OF SUCH ASSESSMENT YEAR OR YEARS IN WHICH THE TAX EFFECT IN RESPECT OF THE DISPUTED ISSUES EXCEEDS THE MONETARY LIMIT S PECIFIED IN PARA 3. NO APPEAL SHALL BE FILED IN RESPECT OF A N I.T.A. NO. 2946/DEL/2010 ASSESSMENT YEAR 2003-04 5 ASSESSMENT YEAR OR YEARS IN WHICH THE TAX EFFECT IS LESS THAN THE MONETARY LIMIT SPECIFIED IN PARA 3. IN OTHER WO RDS, HENCEFORTH, APPEALS CAN BE FILED ONLY WITH REFERENC E TO THE TAX EFFECT IN THE RELEVANT ASSESSMENT YEAR. HOWEVER , IN CASE OF A COMPOSITE ORDER OF ANY HIGH COURT OR APPELLATE AUTHORITY, WHICH INVOLVES MORE THAN ONE ASSESSMENT YEAR AND COMMON ISSUES IN MORE THAN ONE ASSESSMENT YEAR, APPEAL SHALL BE FILED IN RESPECT OF ALL SUCH ASSESS MENT YEARS EVEN IF THE TAX EFFECT IS LESS THAN THE PRESCRIBE D MONETARY LIMITS IN ANY OF THE YEAR(S), IF IT IS DECIDED TO F ILE APPEAL IN RESPECT OF THE YEAR(S) IN WHICH TAX EFFECT EXCEED S THE MONETARY LIMIT PRESCRIBED. IN CASE WHERE A COMPOSIT E ORDER/ JUDGEMENT INVOLVES MORE THAN ONE ASSESSEE, EACH ASS ESSEE SHALL BE DEALT WITH SEPARATELY. 6. IN A CASE WHERE APPEAL BEFORE A TRIBUNAL OR A CO URT IS NOT FILED ONLY ON ACCOUNT OF THE TAX EFFECT BEIN G LESS THAN THE MONETARY LIMIT SPECIFIED ABOVE, THE COMMISSIONE R OF INCOME-TAX SHALL SPECIFICALLY RECORD THAT EVEN THO UGH 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 SPECIFIED IN THIS INSTRUCTION. FURT HER, IN SUCH CASES, THERE WILL BE NO PRESUMPTION THAT THE I NCOME-TAX DEPARTMENT HAS ACQUIESCED IN THE DECISION ON THE DI SPUTED ISSUES. THE INCOME-TAX DEPARTMENT SHALL NOT BE PREC LUDED FROM FILING AN APPEAL AGAINST THE DISPUTED ISSUES I N 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 CLAIME D RELIEF FROM THE TRIBUNAL OR THE COURT ONLY ON THE GROUND T HAT THE DEPARTMENT HAS IMPLICITLY ACCEPTED THE DECISION OF THE TRIBUNAL OR COURT IN THE CASE OF THE ASSESSEE FOR A NY OTHER ASSESSMENT YEAR OR IN THE CASE OF ANY OTHER ASSESSE E FOR THE SAME OR ANY OTHER ASSESSMENT YEAR, BY NOT FILING AN APPEAL I.T.A. NO. 2946/DEL/2010 ASSESSMENT YEAR 2003-04 6 ON THE SAME DISPUTED ISSUES. THE DEPARTMENTAL REPRESENTATIVES/COUNSELS MUST MAKE EVERY EFFORT TO BRING TO THE NOTICE OF THE TRIBUNAL OR THE COURT THAT THE AP PEAL IN SUCH CASES WAS NOT FILED OR NOT ADMITTED ONLY FOR T HE REASON OF THE TAX EFFECT BEING LESS THAN THE SPECIFIED MON ETARY LIMIT AND, THEREFORE, NO INFERENCE SHOULD BE DRAWN THAT T HE DECISIONS RENDERED THEREIN WERE ACCEPTABLE TO THE DEPARTMENT. ACCORDINGLY, THEY SHOULD IMPRESS UPON T HE TRIBUNAL OR THE COURT THAT SUCH CASES DO NOT HAVE A NY PRECEDENT VALUE. AS THE EVIDENCE OF NOT FILING APPE AL DUE TO THIS INSTRUCTION MAY HAVE TO BE PRODUCED IN COURTS, THE JUDICIAL FOLDERS IN THE OFFICE OF CIT MUST BE MAINT AINED IN A SYSTEMIC MANNER 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 LIMITS SP ECIFIED 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 (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 SH ALL NOT APPLY TO WRIT MATTERS AND DIRECT TAX MATTERS OT HER THAN INCOME TAX. FILING OF APPEALS IN OTHER DIRECT TAX M ATTERS SHALL CONTINUE TO BE GOVERNED BY RELEVANT PROVISION S OF STATUTE & RULES. FURTHER, FILING OF APPEAL IN CASES OF INCOME TAX, WHERE THE TAX EFFECT IS NOT QUANTIFIABLE OR NO T INVOLVED, SUCH AS THE CASE OF REGISTRATION OF TRUSTS OR INSTI TUTIONS UNDER SECTION 12A OF THE IT ACT, 1961, SHALL NOT BE GOVERNED BY THE LIMITS SPECIFIED IN PARA 3 ABOVE AND DECISI ON TO FILE APPEAL IN SUCH CASES MAY BE TAKEN ON MERITS OF A PA RTICULAR CASE. I.T.A. NO. 2946/DEL/2010 ASSESSMENT YEAR 2003-04 7 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 WITHDRAWN/ NOT PRESSED. APPEALS BEFORE THE SUPREME COURT WILL BE GOVERNED BY THE INSTRUCTIONS ON THIS SUBJECT, OPERATIVE AT THE TIME WHEN SUCH APPEAL WAS FILED. 11. THIS ISSUES UNDER SECTION 268A (1) OF THE INCOM E-TAX ACT 1961. 6. FROM PARA 10 OF THE ABOVE CIRCULAR, IT IS CLEAR THAT THESE INSTRUCTIONS ARE APPLICABLE TO THE PENDING APPEALS ALSO AND THERE IS A CLEAR CUT INSTRUCTION TO THE DEPARTMENT TO WITHDRAW OR NOT PRESS SUCH APPEALS FILED BEFORE THE ITAT WHEREIN TAX EFFE CT IS LESS THAN RS.10,00,000/-. THESE INSTRUCTIONS ARE OPERATIVE RE TROSPECTIVELY TO THE PENDING APPEALS ALSO. 7. IT GOES WITHOUT SAYING THAT THE BOARDS INSTRUCT IONS OR DIRECTIONS ISSUED TO THE INCOME-TAX AUTHORITIES ARE BINDING ON THEM. GOING BY THE PRESCRIPTION OF THE AFORENOTED CIRCULA R, WE ARE OF THE VIEW THAT THE REVENUE SHOULD HAVE EITHER NOT FILED THE INSTANT APPEAL BEFORE THE TRIBUNAL OR WITHDRAWN THE SAME AS THE TAX EFFECT IN THE APPEAL IS LESS THAN THE PRESCRIBED LIMIT FOR NOT FILING THE APPEAL. 8. KEEPING IN VIEW THE ABOVE CIRCULAR AND THE PROVI SIONS OF SECTION 268A OF INCOME TAX ACT, 1961, AND WITHOUT G OING INTO MERITS OF THE CASE, WE DISMISS THE INSTANT APPEAL F ILED BY THE REVENUE AS TAX EFFECT IN THE PRESENT APPEAL IS LESS THAN RS.10.00 LAC. 9. IN THE RESULT, THE APPEAL OF THE REVENUE STANDS DISMISSED. I.T.A. NO. 2946/DEL/2010 ASSESSMENT YEAR 2003-04 8 ORDER PRONOUNCED IN THE OPEN COURT ON 28.01.2016. SD/- SD/- (R.S. SYAL) (SUDHANSHU SRIVA STAVA ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 28TH JANUARY 2016 GS COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4.CIT(A) 4. DR BY ORDER ASSTT. REGISTRAR