Asstt. CIT Cir. 2, Nasik, Nashik V. S.V. Plastochem Pvt. Ltd., Nashik

ITA 311/PUN/2009

• Counselvise Citation: [2010] 135 COUNSELVISE.COM (IT) 3308 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 6 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-09-2010
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2005-2006
• Appeal Filed On: 06-03-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: HEMANTKUMAR C LEUVA
• Keywords: Tax effect

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B , PUNE BEFORE SHRI SHAILENDRA KUMAR (JM) AND SHRI D. KARUNAKARA RAO (AM) ITA NO. 311/PN/2009 (ASSTT. YEAR : 2005-06) ASSTT. CIT CIR. 2, NASIK . APPELLANT V. S.V. PLASTOCHEM PVT. LTD. GAT NO. 603, AT & POST JANORI TAL. DINDORI, DIST NASIK PAN AAECS 0075 J . RESPONDENT APPELLANT BY : SHRI HEMANTKUMAR C. LEUVA RESPONDENT BY : NONE ORDER PER SHAILENDRA KUMAR YADAV JM THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF CIT(A), II NASIK DATED 29/12/2008 FOR THE A.Y. 2004 -05 ON THE FOLLOWING GROUNDS: 1. ON THE FACTS AND IN THE CIRCUMSTANCES IF THE CASE T HE CIT(A) ERRED IN HOLDING THAT THE PROVISIONS OF TDS AND HENCE THE PROVISIONS OF SEC. 40(A)(IA) ARE NOT APPL ICABLE TO THE PAYMENT OF RS 5,01,189- MADE TO M/S. SAI SHIPPING SERVICES. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE CIT(A) ERRED IN HOLDING THAT PROVISIONS OF SEC. 40( A)(IA) ARE NOT APPLICABLE TO PAYMENT OF RS. 45,500/- ON ACCOUNT OF ADVERTISEMENT CHARGES. 2. AT THE OUTSET, WE FIND THAT THE TAX EFFECT INVO LVED IN THIS APPEAL IS LESS THAN RS. 2,00,000/- AND THE CBDT HAD ISSUED THE CIRCULAR RESTRICTING THE MONETARY LIMIT FOR FILING THE APPEAL IN THE ITA NO 311/PN/2009 S.V. PLASTOCHEM , A.Y.2005-06 PAGE OF 4 2 INCOME-TAX APPELLATE TRIBUNAL WHICH IS RS. 2 LAKHS AND HENCE IN VIEW OF THE CBDT CIRCULAR NO. F. 279/MISC. 142/2007 /-IT DATED 15.5.2008, THIS APPEAL IS NOT MAINTAINABLE. 3. WE FIND THAT THIS ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASES OF CIT V/S. PITHWA ENGINEERING WORKS, 276 ITR 519 (BOM) AND CIT V/S. ZEOB Y. TOPIWALLA, 284 ITR 379 (BOM.) WHEREIN IT IS HELD THAT THE MONETARY LIMIT FOR FILING APPEAL BEFO RE THE TRIBUNAL IS RS. 2 LAKHS . IN THESE CASES THE HON'BLE HIGH C OURT HAS HELD AS UNDER : 6. THIS COURT CAN VERY WELL TAKE JUDICIAL NOTICE OF THE FACT THAT BY PASSAGE OF TIME MONEY VALUE HAS GONE DOWN, THE COST OF LITIGATION EXPENSES HAS GONE UP, THE ASSESSEES ON THE FILE OF THE DEPARTMENTS HAVE INCREASED ; CONSEQUENTLY, THE BURDEN ON THE DEPARTMENT HAS ALSO INCREASED TO A TREMENDOUS EXTENT. THE CORRIDORS OF THE SUPERIOR COURTS ARE CHOKED WITH HUGE PENDENCY OF CASES. IN THIS VIEW O F THE MATTER, THE BOARD HAS RIGHTLY TAKEN A DECISION NOT TO FILE REFERENCES IF THE TAX EFFECT IS LESS THAN R S. 2 LAKHS. THE SAME POLICY FOR OLD MATTERS NEEDS TO BE ADOPTED BY THE DEPARTMENT. IN OUR VIEW, THE BOARD S CIRCULAR DATED MARCH 27, 2000, IS VERY MUCH APPLICABLE EVEN TO THE OLD REFERENCES WHICH ARE STI LL UNDECIDED. THE DEPARTMENT IS NOT JUSTIFIED IN PROCEEDING WITH THE OLD REFERENCES WHEREIN THE TAX IMPACT IS MINIMAL. THUS, THERE IS NO JUSTIFICATION TO PROCEED WITH DECADES OLD REFERENCES HAVING NEGLIGIB LE TAX EFFECT. 7. THE COURT HELD THAT THE CIRCULAR WAS APPLICABLE EVEN TO OLD APPEALS WHICH WERE STILL UNDECIDED. WE RESPECTFULLY FOLLOW THE PRECEDENTS AND DISMISS THE APPEAL FILED BY THE DEPARTMENT. ITA NO 311/PN/2009 S.V. PLASTOCHEM , A.Y.2005-06 PAGE OF 4 3 THE QUANTUM OF TAX EFFECT IN THIS CASE IS LESS THAN RS. 2 LAKHS. THE REVENUE HAS NOT BROUGHT ANY THING ON RECORD WIT H FACTS AND CALCULATIONS TO ESTABLISH THAT THE TAX EFFECT IS AB OVE RS 2 LAKHS. IT IS NOT THE CASE OF THE REVENUE THAT THERE EXISTS CO NSOLIDATED ORDER, WHICH MAY FALL IN THE ONLY CATEGORY OF EXEMP T CASES AS ADVOCATED BY THE JURISDICTIONAL HIGH COURTS JUDGME NT IN THE CASE OF MADHUKAR INAMDAR (318 ITR 149)(BOM). THIS JUDGME NT HAS ESTABLISHED A RATIO THAT THE CIRCULAR DATED 15.5.20 08 WOULD BE APPLICABLE TO CASES PENDING BEFORE THE COURT EITHER FOR ADMISSION OR FOR FINAL DISPOSAL AND IT IS BINDING ON THE REVE NUE. FOLLOWING THE JUDGMENTS OF THE JURISDICTIONAL HIGH COURT CITE D (SUPRA), WE DISMISS THIS APPEAL AS NOT MAINTAINABLE. 3. IN THE RESULT, REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH DAY OF SEPTEMBER 2010. SD/- SD/- (D. KARUNAKARA RAO ) ACCOUNTANT MEMBER (SHAILENDRA KUMAR YADAV JUDICIAL MEMBER) PUNE, DATED THE 30 TH SEPTEMBER 2010 ANKAM ITA NO 311/PN/2009 S.V. PLASTOCHEM , A.Y.2005-06 PAGE OF 4 4 COPY OF THE ORDER IS FORWARDED TO : 1. THE ASSESSEE 2. THE DEPARTMENT 3. THE CIT- II NASIK 4. THE CIT(A)- II NASIK 4. THE D.R. B BENCH, PUNE 5. GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL PUNE