ITO 6 (3)(2), MUMBAI V. M/S INTERO INFRASTRUCTURE AND TRADING PVT LTD., MUMBAI

ITA 301/MUM/2020

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 6822 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-07-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2009-2010
• Appeal Filed On: 10-01-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: D DHARAM GANDHI
• Keywords: Tax effect
• Section: 143(3); 13

Judgement Text

ITA NO.301/MUM/2020 A.Y. 2009 - 10 ITO - 6(3)(2) VS. M/S INTERO INFRASTRUCTURE & TRADING PVT. LTD. 1 IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH C MUMBAI BEFORE SHRI RAJESH KUMAR (ACCOUNTANT MEMBER) AND SHRI RAVISH SOOD (JUDICIAL MEMBER) ITA NO.301/MUM/2020 (ASSESSMENT YEAR: 2009 - 10) INCOME TAX OFFICER 6(3)(2) 5 TH FLOOR, ROOM NO. 503, AAYAKAR BHAVAN, M.K. ROAD, CHURCHGATE, MUMBAI 4000 20 VS. M/S INTERO INFRASTRUCTURE AND TRADING PVT. LTD., 412 SUNSHINE PLAZA, NAIGAUM CROSS ROAD, DADAR EAST, MUMBAI 400014 PAN NO. AACCI0171P ( REVENUE ) ( ASSESSEE ) ASSESSEE BY : SHRI D. DHARAM GANDHI , A.R REVENUE BY : MS. SHREEKALA PARDESHI , D.R DATE OF HEARING : 19 /07/2021 DATE OF PRONOUNCEMENT : 20 /07/2021 ORDER PER RAVISH SOOD, J.M: THE PRESENT APPEAL FILED BY THE REVENUE IS DIRECTED AGAINST THE ORDER PASSED BY THE CIT(A) - 12, MUMBAI, WHICH IN TURN ARISES FROM THE ORDER PASSED BY THE AO U/S 143(3) R.W.S 147 OF THE INCOME TAX ACT, 1961, (FOR SHORT ACT), DATED 18.03.2016. 2. CENTRAL BO ARD OF DIRECT TAXES (CBDT) VIDE CIRCULAR NO. 17/2019 DATED 08.08.2019 HAS AMENDED CIRCULAR NO. 3/2018 DATED 11.07.2018 FOR FURTHER ENHANCEMENT OF MONETARY LIMIT FOR FILING OF APPEALS BY THE DEPARTMENT BEFORE THE ITAT, HIGH COURTS AND SLPS/APPEALS BEFORE SU PREME COURT AS MEASURES FOR REDUCING LITIGATION. ITA NO.301/MUM/2020 A.Y. 2009 - 10 ITO - 6(3)(2) VS. M/S INTERO INFRASTRUCTURE & TRADING PVT. LTD. 2 3. CBDT VIDE CIRCULAR NO. 3/2018 DATED 11.07.2018 HAS SPECIFIED THAT APPEALS SHALL NOT BE FILED BEFORE THE INCOME TAX APPELLATE TRIBUNAL (ITAT) IN CASES WHERE THE TAX EFFECT DOES NOT EXCEED THE MONETARY LI MIT OF RS.20,00,000/ - . FOR THIS PURPOSE, TAX EFFECT MEANS THE DIFFERENCE BETWEEN THE TAX ON THE TOTAL INCOME ASSESSED AND THE TAX THAT WOULD HAVE BEEN CHARGEABLE HAD SUCH TOTAL INCOME BEEN REDUCED BY THE AMOUNT OF INCOME IN RESPECT OF ISSUES AGAINST WHIC H APPEAL IS INTENDED TO BE FILED. FURTHER, TAX EFFECT SHALL BE TAXES INCLUDING APPLICABLE SURCHARGE AND CESS. HOWEVER, THE TAX WILL NOT INCLUDE ANY INTEREST THEREON, EXCEPT WHERE CHARGEABILITY OF INTEREST ITSELF IS IN DISPUTE. IN CASE THE CHARGEABILITY O F INTEREST IS THE ISSUE UNDER DISPUTE, THE AMOUNT OF INTEREST SHALL BE THE TAX EFFECT. IN CASES WHERE RETURNED LOSS IS REDUCED OR ASSESSED AS INCOME, THE TAX EFFECT WOULD INCLUDE NOTIONAL TAX ON DISPUTED ADDITIONS. IN CASE OF PENALTY ORDER, THE TAX EFFECT WILL MEAN QUANTUM OF PENALTY DELETED OR REDUCED IN THE ORDER TO BE APPEALED AGAINST. AT PARA 13 OF THE ABOVE CIRCULAR, IT HAS BEEN MENTIONED THAT: 13. THIS CIRCULAR WILL APPLY TO SLPS/APPEALS/CROSS OBJECTION/REFERENCES TO BE FILED HENCEFORTH IN SC/HCS/ TRIBUNAL AND IT SHALL ALSO APPLY RETROSPECTIVELY TO PENDING SLPS/APPEALS/CROSS OBJECTIONS/REFERENCES. PENDING APPEALS BELOW THE SPECIFIED TAX LIMITS IN PARA 3 ABOVE MAY BE WITHDRAWN/NOT PRESSED. 4. AS A STEP TOWARDS FURTHER MANAGEMENT OF LITIGATION, CBDT VIDE CIRCULAR NO. 17/2019 HAS FIXED THE MONETARY LIMIT FOR FILING OF APPEALS BEFORE ITAT AT RS.50,00,000/ - . 5. IN THE INSTANT APPEAL FILED BY THE DEPARTMENT, THE TAX EFFECT INVOLVED IS BELOW THE MONETARY LIMIT OF RS.50,00,000/ - . THE SAID FACT AS WAS BROUGHT TO OUR NOTICE BY THE LD. COUNSEL FOR THE ASSESSEE WAS CONFRONTED TO THE LD. DEPARTMENTAL REPRESENTATIVE (DR). 6. BEFORE US, THE LD. DR FAIRLY ADMITTED THAT THE PRESENT APPEAL IS COVERED BY THE MONETARY CEILING PROVIDED IN CBDT CIRCULAR NO. 17 OF 2019; DATED 08 TH AUGUST, 2019 . 7. BE THAT AS IT MAY, WE FIND THAT THE A.O VIDE GROUND OF APPEAL NO.4 HAD CLAIMED THAT THOUGH THE TAX EFFECT INVOLVED IN THE PRESENT APPEAL WAS RS.40,44,810/ - I.E BELOW THE MONETARY CEILING PROVIDED FOR FILING OF APPEAL BEFORE THE TRIBUNAL AS PER CBDT CIRCULAR NO. 17 OF 2019, DATED 08.08.2019, HOWEVER, THE SAME WAS COVERED BY THE EXCEPTION CARVED OUT IN PARA (E) OF C IRCULAR NO. 3/2018, DATED 11.07.2018. WE HAVE GIVEN A THOUTHTFUL CONSIDERATION TO THE AFORESAID C LAIM OF THE REVENUE AND ARE UNABLE TO PERSUADE OURSELVES TO ACCEPT THE SAME. ADMITTEDLY, THE CBDT VIDE ITS C IRCULAR NO. 3/2018, DATED 11.07.2018 HAD CARV E D OUT CERTAIN EXCEPTION S WHICH OVERRIDE THE NON - MAINTAINABILITY OF AN APPEAL FILED BY THE REVENUE ITA NO.301/MUM/2020 A.Y. 2009 - 10 ITO - 6(3)(2) VS. M/S INTERO INFRASTRUCTURE & TRADING PVT. LTD. 3 INVO LVING TAX EFFECT BELOW THE PRESCRIBED MONETARY CEILING . HOWEVER, WE FIND THAT THE EXCEPTION CARVED OUT IN PARA 10(E) OF THE CBDT CIRCULAR NO. 3/2018, DATED 11.07.2018 WOULD NOT COME TO THE RESCUE OF THE REVENUE INSOFAR ITS PRESENT APPEAL IS CONCERNED. EXCEPTION CARV E D OUT IN PARA 10(E) ENVISAGES SUCH CASES WHERE ADDITION IS BASED ON INFORMATION RECEIVED FROM CERTAIN SPECIF IED EXTERNAL SOURCES, AND THE S A ME RE ADS AS UNDER: 10(E). WHERE ADDITION IS BASED ON INFORMATION RECEIVED FROM EXTERNAL SOURCES IN THE NATURE OF LAW ENFORCEMENT AGENCIES SUCH AS CBI/ED/DRI/SFIO/DIRECTORATE GENERAL OF GSC INTELLIGENCE (DGGI). HOWEVER, AS THE ADDITION IN THE CASE OF THE PRESENT ASSESSEE IS BASED ON THE INFORMATION RECEIVED BY THE A.O FROM THE INVESTIGATION WING OF THE INCOME - TAX DEPARTMENT , MUMBAI, THEREFORE, THE SAME WOULD NOT FAL L WITHIN THE MEANING OF EXTERNAL SOURCES AS HAD BEEN SPECI FIED IN PARA 10(E) OF THE CBDT CIRCULAR NO. 3/2018, DATED 11.07.2018. ACCORDINGLY, NOT BEING PERSUADED TO ACCEPT THE AFORESAID CLAIM OF THE REVENUE THAT THE CASE OF THE PRESENT ASSESSEE IS COVERED BY THE EXCEPTION CARVED OUT IN PARA 10(E) OF THE CBDT CIRC ULAR NO.3/2018, WE REJECT THE SAME. 8 . WITH THE ABOVE OBSERVATIONS THE PRESENT APPEAL INVOLVING A TAX EFFECT OF LESS THAN RS.50 LAC IS DISMISSED. ORDER PRONOUN CED IN THE OPEN COURT ON 20 /07 /2021. SD/ - SD/ - ( RAJESH KUMAR ) (RAVISH SOOD) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI ; DATED: 20 /0 7 /2021 **PS: ROHIT COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A) - 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE . BY ORDER, //TRUE COPY// (SR. PRIVATE SECRETARY)