ITO, New Delhi V. M/s. PBG Fabrics Ltd, New Delhi

ITA 3159/DEL/2009

• Counselvise Citation: [2009] 114 COUNSELVISE.COM (IT) 9927 (ITAT-DELHI)
• Duration Of Justice: 2 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-09-2009
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Assessment Year: 2003-2004
• Appeal Filed On: 08-07-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RENU AMITABH
• Assessee Lawyers: P S KOHLI
• Keywords: Retrospective amendment; Question of law; Block assessment; Tax effect
• Section: 260A; 201(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH E: NEW DELHI BEFORE SHRI A.D. JAIN AND SHRI A.K. GARODIA I.T.A. NO. 3159/DEL/2009 ASSESSMENT YEAR : 2003-04. THE INCOME-TAX OFFICER, WARD-51(1), ROOM NO.510, 5 TH FLOOR, AAYAKAR BHAWAN, LAXMI NAGAR, DISTRICT CENTRE, LAXMI NAGAR, DELHI. PAN/GIR NO.AABCP6565D V/S M/S. PBG FABRICS LIMITED, CHOPRA COMPLEX, COMMUNITY VIHAR, DELHI-110092. (APPELLANT) (RESPONDENT) APPELLANT BY : MS. RENU AMITABH, SR. D.R. RESPONDENT BY : SHRI P.S. KOHLI, ADVOCATE.. ORDER PER A.K. GARODIA, ACCOUNTANT MEMBER: THE ASSESSEE HAS FILED THIS APPEAL AGAINST THE ORD ER OF CIT(APPEALS)-XXIV, NEW DELHI PASSED IN APPEAL NO. 187/07-08 DATED 02.04.20 09 FOR THE ASSESSMENT YEAR 2002-03. 2. THE GROUNDS RAISED BY THE REVENUE IN THIS APPEAL ARE AS UNDER :- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, AS WELL AS IN LAW THE LD. CIT(A) HAS ERRED IN HOLDING THAT THE DATE OF ISSUAN CE U/S 197 OF THE ACT IS IMMATERIAL TO THE STATUTORY PROVISIONS OF THE ACT I F THE SAME HAS BEEN ISSUED WITHIN THAT PARTICULAR FINANCIAL YEAR. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, AS WELL AS IN LAW THE LD. CIT(A) HAS ERRED IN HOLDING THAT THE ASSESSEE IS NO T IN DEFAULT AS PROVIDED IN SECTION 201(1) OF THE ACT FOR NOT DEDUCTING TAX AT SOURCE U/S 194-A ON THE PAYMENT OF INTEREST MADE TO M/S ASSOCIATES INDIA FI NANCIAL SERVICES (P) LTD. PRIOR TO 24-01-2003, SINCE THE PARTY PRODUCED CERTIFICATE U/S 197 IN FORM NO.15AA ISSUED ON 24-01-2003. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, AS WELL AS IN LAW THE LD. CIT(A) HAS ERRED IN OVERRULING BOARD CIRCULAR NO.74 4 DATED 17-03-1999, WHICH CURTAIL THE POWER OF AO TO ISSUE AUTHORIZATIO N U/S 197 WITH RETROSPECTIVE EFFECT. I.T.A. NO.3159/DEL./2009 (A.Y. : 2003-04) 2 4. THOUGH THE REVENUE EFFECT IS 1,84,320/- ONLY WHI CH IS LESS THAN THE LIMIT PRESCRIBED BY THE BOARD, SINCE THE LEGAL ISSUES ARE INVOLVED IN THIS CASE, APPEAL TO THE ITAT IS BEING FILED IN VIEW OF THE CL AUSE (B) OF PARA.8 OF THE BOARD INSTRUCTION NO.05/2008 DT. 15/05/2008. 5. THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR AMEN D ANY OF THE GROUNDS OF APPEAL AT THE TIME OF HEARING. 3. IN THIS CASE, THE TAX EFFECT IS ADMITTE DLY BELOW RS.2 LAKH, BEING RS.1,17,296/-. THEREFORE, IT WAS PLEADED BY THE LD. COUNSEL THAT T HE APPEAL OF THE REVENUE MAY BE DISMISSED IN LIMINE. 4. WE HAVE CONSIDERED THE FACTS OF THE CAS E. AS PER C.B.D.T. INSTRUCTION NO. 5 DATED 16.7.2007, CLARIFYING THE MEANING OF TAX EFF ECT AS GIVEN IN BOARDS INSTRUCTION NO.2/2005, DATED 24.10.2005, IT IS PROVIDED THAT T AX EFFECT MEANS TAX EXCLUDING INTEREST. THUS, ONLY THE EFFECT OF INCOME-TAX IS TO BE SEEN A ND NOT THE INTEREST THEREON. WHILE CONSIDERING THE EFFECT OF INSTRUCTION NO.2 DATED 24 .10.2005, ITAT DELHI BENCHES ARE CONSISTENTLY TAKING THE VIEW THAT REVENUE AUTHORITI ES MUST GIVE RESPECT TO THE C.B.D.T. CIRCULARS AND SHOULD NOT FILE APPEAL IN SMALL AND P ETTY CASES. THE WHOLE IDEA OF THE CIRCULAR IS NOT TO WASTE ENERGY OF THE DEPARTMENT O N SMALL MATTERS AND SAVE IT FOR HIGH-TAX YIELDING CASES. JURISDICTIONAL HIGH COURT IN CASE O F CIT VS. MANISH BHAMBRI VIDE ORDER DATED 1.8.2007 IN I.T.A. NO.683/DEL/07, HAVE UPHELD THE ORDER OF THE ITAT VIDE WHICH THE APPEAL FILED BY THE REVENUE WAS REFUSED TO BE E NTERTAINED BECAUSE OF THE LOW INCOME- TAX. THE SAID ORDER OF HONBLE JURISDICTIONAL HIGH COURT IS REPRODUCED BELOW FOR THE SAKE OF CONVENIENCE:- THE REVENUE IS AGGRIEVED BY AN ORDER DATED 8TH AUG UST, 2006 PASSED BY THE INCOME TAX APPELLATE TRIBUNAL, DELHI BENCH 'D' IN I T(SS) NO. 513/DEL/2003 RELEVANT FOR THE BLOCK PERIOD 1ST APRIL, 1990 TO 14 TH FEBRUARY, 2001. THE QUESTION THAT AROSE BEFORE THE ASSESSING OFFICE R WAS WITH REGARD TO CERTAIN DEPOSITS IN THE BANK ACCOUNT OF THE ASSESSEE AND SI NCE THE AMOUNTS WERE NOT EXPLAINED, TAX WAS LEVIED. IN APPEAL, THE COMMISSIONER OF INCOME TAX (APPEALS) ACCEPTED THE VIEW CANVASSED BY THE ASSESSEE AND HELD THAT THE EXPLANA TION GIVEN BY HIM WAS ACCEPTABLE AND, IN ANY CASE, THE ASSESSEE CANNOT BE EXPECTED TO RECOLLECT EACH AND EVERY ENTRY MADE IN THE BANK. I.T.A. NO.3159/DEL./2009 (A.Y. : 2003-04) 3 IT MAY BE MENTIONED THAT THE AMOUNT IN DISPUTE IS R S.30,000/- FOR THE ASSESSMENT YEAR 1999-2000 AND RS.83,000/- FOR THE ASSESSMENT Y EAR 2001-2002. IT MAY ALSO BE MENTIONED THAT FOR THE ASSESSMENT YEAR 1999-2000 , THE ASSESSING OFFICER HAS ALREADY ACCEPTED THE EXPLANATION WITH REGARD TO A G IFT OF RS.60,000/-. AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS),-AN APPEAL WAS FILED BEFORE THE INCOME TAX APPELLATE TRIBUNAL. THE TRIBUNAL FOUND THAT IN VIEW OF INSTRUCTIONS ISSUED BY THE CBDT WHERE THE TAX EF FECT IS LESS THAN RS.L LAC, THE DEPARTMENT SHOULD NOT FILE AN APPEAL BEFORE THE TRI BUNAL. IN THE PRESENT CASE, THE TAX EFFECT IS LESS THAN RS.L LAC. UNDER THE CIRCUMS TANCES, THE TRIBUNAL DID NOT ENTERTAIN THE APPEAL. THE REVENUE, FEELING AGGRIEVED BY THE DECISION OF T HE TRIBUNAL, HAS COME UP BEFORE US UNDER SECTION 260A OF THE INCOME TAX ACT, 1961. IT IS CONTENDED BY LEARNED COUNSEL FOR THE REVENUE THAT THE TRIBUNAL I S A FACT FINDING AUTHORITY AND SHOULD HAVE ADJUDICATED THE MATTER ON MERITS. WE AR E OF THE VIEW THAT THE ISSUE RAISED BY THE REVENUE IS NOT AT ALL SUBSTANTIAL AND THE AMOUNT IN DISPUTE IS QUITE INSIGNIFICANT, CONSIDERING THAT THE CASE IS ONE OF A BLOCK ASSESSMENT. THERE IS NO JUSTIFICATION FOR THE INCOME TAX DEPARTMENT TO GO O N BURDENING THE TRIBUNAL, THE COURT WITH EVERY CASE RIGHT UP TO THE END. APART FR OM BURDENING THE TRIBUNAL AND COURTS, IT ALSO CAUSES AVOIDABLE EXPENSES TO THE AS SESSEE. IT IS COMMON KNOWLEDGE THAT THE ASSESSEE HAS TO PAY FOR LEGAL FEES AND MER ELY BECAUSE THE INCOME TAX DEPARTMENT HAS GOT UNLIMITED RESOURCES, THERE IS NO JUSTIFICATION THAT EVERY CASE SHOULD BE DRAGGED ON. UNDER THE CIRCUMSTANCES, WE ARE OF THE VIEW THAT TH E TRIBUNAL WAS JUSTIFIED IN REFUSING TO ENTERTAIN THE APPEAL BECAU SE OF THE INSIGNIFICANT AMOUNT INVOLVED IN THE MATTER. NO SUBSTANTIAL QUESTION OF LAW ARISES. WE, THEREFORE, DISMISS THIS APPEAL. 4. RESPECTFULLY FOLLOWING THIS DECISION, THE APPEAL FILED BY THE DEPARTMENT IS DISMISSED IN LIMINE. 5. IN THE RESULT, THE APPEAL FILED BY THE DEPARTMEN T IS DISMISSED. 6. ORDER PRONOUNCED IN THE OPEN COURT TODAY ON 8.9. 2009 AFTER CONCLUSION OF THE HEARING. [A.D. JAIN] [A.K. GARODIA] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 08-09-2009. *SKB* I.T.A. NO.3159/DEL./2009 (A.Y. : 2003-04) 4 COPY OF THE TRIBUNAL ORDER FORWARDED TO: - 1. THE INCOME-TAX OFFICER, WARD- 51(1), ROOM NO.510 , 5 TH FLOOR, AAYKAR BHAWAN, LAXMI NAGAR DISTRICT CENTRE, LAXMI NAGAR, D ELHI-110092., . 2. M/S. PBG FABRICS LIMITED, 107-08, CHOPRA COMPLEX , COMMUNITY CENTRE, PREET VIHAR, DELHI-110092. 3. THE CIT(APPEALS)-XXIV, NEW DELHI.. 4. THE CIT, DELHI-XVII, NEW DELHI. 5. THE DR, ITAT TRUE COPY BY ORDER, DEPUTY REGISTRAR,