ACIT, Circle-1(3), Surat V. Jay Arunkumar Naik, Surat

ITA 319/SRT/2019

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 4832 (ITAT-SURAT)
• Duration Of Justice: 2 year(s) 3 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-09-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2010-2011
• Appeal Filed On: 06-06-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANUPAMA SINGLA SRDR
• Assessee Lawyers: DIGANT S NAIK
• Keywords: Tax effect

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, SURAT BENCH, SURAT BEFORE SHRI PAWAN SINGH, JUDICIAL MEMBER AND DR. ARJUN LAL SAINI, ACCOUNTANT MEMBER ITA NO. 319/SRT/2019 (AY 2010-11) (H EARING IN VIRTUAL COURT) ASSISTANT COMMISSIONER OF INCOME-TAX, CIRCLE-1[3],ROOM NO.301, 3 RD FLOOR, ANAVIL BUSINESS CENTRE, ADAJAN HAZIRA ROAD, ADAJAN, SURAT- 395007 VS JAY ARUNKUMAR NAIK 102, VAISHALI APARTMENT, NR. ELBEE CINEMA, BHATAR ROAD, SURAT-395007 PAN : AAYPN 9318 E APPELLANT / REVENUE RESPONDENT /ASSESSEE ASSESSEE BY SHRI DIGANT S.NAIK, C.A REVENUE BY MS. ANUPAMA SINGLA SR-DR DATE OF HEARING 17.09.2021 DATE OF PRONOUNCEMENT 17.09.2021 ORDER UNDER SECTION 254(1) OF INCOME TAX ACT PER PAWAN SINGH, JUDICIAL MEMBER : 1. THIS APPEAL BY REVENUE IS DIRECTED AGAINST THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS)-2, SURAT DATED 13.03.2019 FOR ASSESSMENT YEAR 2010- 11. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION ON ACCOUNT OF INTEREST ON CAPITAL OF RS.23,64,357/- AND REMUNERATION FROM THE FIRM M/S REGENT CORPORATION OF RS.96,08,418/-. 2. IT IS SEEN AT THE OUTSET THAT THE TAX EFFECT ON THE DISPUTED ADDITIONS BEFORE US IS LESS THAN RS. 50 LACS AS THE PRESCRIBED IN THE CBDTS LATEST CIRCULAR NO17/2019 DATED 08.08.2019. IT WILL BE PERTINENT TO REPRODUCE THE RELEVANT PORTION OF THE SAID CIRCULAR AS FOLLOWS:- 2 . AS A STEP TOWARD FURTHER MANAGEMENT OF LITIGATION, IT HAS BEEN DECIDED BY THE BOARD THAT MONETARY LIMITS FOR FILING OF APPEALS IN INCOME-TAX CASES BE ENHANCED FURTHER THROUGH AMENDMENT IN PARA 3 OF THE CIRCULAR MENTIONED ABOVE AND ITA NO.319/SRT/2019 (A.Y.10-11) JAY A NAIK 2 ACCORDINGLY, THE TABLE FOR MONETARY LIMITS SPECIFIED IN PARA 3 OF THE CIRCULAR SHALL READ AS FOLLOWS: S.NO. APPEALS/SLPS IN INCOME-TAX MATTERS MONETARY LIMIT (RS.) 1. BEFORE APPELLATE TRIBUNAL 50,00,000 2. BEFORE HIGH COURT 1,00,00,000 3. BEFORE SUPREME COURT 2,00,00,000 3.1 WE FIND THAT INTENTION BEHIND THE CIRCULAR NO17/2019 DATED 08.08.2019 NEEDS TO BE UNDERSTOOD IN THE FOLLOWING PERSPECTIVE:- 3. FURTHER, WITH A VIEW TO PROVIDE PARITY IN FILING OF APPEALS IN SCENARIOS WHERE SEPARATE ORDER IS PASSED BY HIGHER APPELLATE AUTHORITIES FOR EACH ASSESSMENT YEAR VIS--VIS WHERE COMPOSITE ORDER FOR MORE THAN ONE ASSESSMENT YEAR IS PASSED, PARA 5 OF THE CIRCULAR IS SUBSTITUTED BY THE FOLLOWING PARA: 5. THE ASSESSING OFFICER SHALL CALCULATE THE TAX EFFECT SEPARATELY FOR EVERY ASSESSMENT YEAR IN RESPECT OF THE DISPUTED ISSUES IN THE CASE OF EVERY ASSESSEE. IF, THE CASE OF AN ASSESSEE, THE DISPUTED ISSUES ARISE IN MORE THAN 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 SPECIFIED IN PARA 3 . NO. APPEAL SHALL BE FILED IN RESPECT OF AN ASSESSMENT YEAR OR YEARS IN WHICH THE TAX EFFECT IS LESS THAN THE MONETARY LIMIT SPECIFIED IN PARA 3. FURTHER, EVEN IN THE CASE OF COMPOSITE ORDER OF ANY HIGH COURT OR APPELLATE AUTHORITY WHICH INVOLVES MORE THAN ONE ASSESSMENT YEAR AND COMMON ISSUES IN MORE THAN ONE ASSESSMENTS YEAR, NO APPEAL SHALL BE FILED IN RESPECT OF AN ASSESSMENT YEAR OR YEARS IN WHICH THE TAX EFFECT IS LESS THAN THE MONETARY LIMIT SPECIFIED IN PARA 3. IN CASE WHERE A COMPOSITE ORDER/JUDGMENT INVOLVES MORE THAN ONE ASSESSEE, EACH ASSESSEE SHALL BE DEALT WITH SEPARATELY. 3.2. ON PERUSAL OF THE CIRCULAR NO. 17/2019 DATED 08.08.2019 AND THE MATERIALS AVAILABLE ON RECORD, WE DO NOT SEE THIS CASE FALLING UNDER ANY OF THE EXCEPTIONS CONTEMPLATED IN THE SAID CIRCULAR PER SE . WE ALSO FIND THAT THIS CIRCULAR MAKES IT VERY CLEAR THAT THE REVISED MONETARY LIMITS SHALL APPLY RETROSPECTIVELY TO PENDING APPEALS AS WELL. H ONBLE APEX COURT IN COMMISSIONER OF CUSTOMS VS INDIAN OIL CORPORATION LTD REPORTED IN 267 ITR 272 (SC) HAS SETTLED THE LAW THAT CBDTS CIRCULARS ARE VERY MUCH BINDING ON REVENUE AUTHORITIES. WE THUS ITA NO.319/SRT/2019 (A.Y.10-11) JAY A NAIK 3 HOLD THAT THIS REVENUES APPEAL RAISING SOLE ISSUE OF 98,72,775/- DESERVE TO BE DISMISSED IN TERMS OF LOW TAX EFFECT. WE MAKE IT CLEAR THAT IT SHALL VERY MUCH OPEN FOR THE REVENUE TO SEEK NECESSARY RECTIFICATION IN CASE IT IS FOUND THAT ANY OF THE APPEAL INVOLVE OPERATIONS OF EXCEPTION CLAUSES IN THE TAX EFFECT CIRCULAR AS PER LAW. 4. THIS REVENUES APPEAL IS DISMISSED FOR INVOLVING LOWER THAN THE PRESCRIBED MINIMUM TAX EFFECT. ORDER ANNOUNCED AT THE TIME OF HEARING OF APPEAL ON 17 TH SEPTEMBER 2021 IN THE VIRTUAL COURT HEARING. SD/- SD/- ( DR ARJUN LAL SAINI) (PAWAN SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER SURAT, DATED: 17/09/2021 DKP. OUT SOURCING SR.P.S COPY TO: 1. APPELLANT-ACIT, CIR-1(3), ROOM NO.301, 3 RD FL, ANVIL BUSINESS CENTRE, ADAJAN HAZIRA ROAD, ADAJANA, SURAT-395007 2. RESPONDENT- JAY ARUNKUKAMR NAIK, 102, VAISHALI APARTMENT, NR. ELBEE CINEMA, BHATAR ROAD, SURAT-395007 3. CIT(A)-2, SURAT 4. CIT 5. DR 6. GUARD FILE TRUE COPY/ BY ORDER //TRUE COPY// ASSISTANT REGISTRAR, ITAT, SURAT /