The DCIT, Circle-2(1)(1), Ahmedabad V. HDB Financial Services Limited, Ahmedabad

ITA 3193/AHD/2016

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 4107 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 8 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-08-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2013-2014
• Appeal Filed On: 01-12-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MUDIT NAGPALSR
• Assessee Lawyers: IRA KAPOOR WITH SHRI P M MEHTA
• Keywords: Retrospective amendment; Tax effect
• Section: 14A

Judgement Text

, - IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH B BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI WASEEM AHMED, ACCOUNTANT MEMBER ./ ITA NO. 3193/AHD/2016 / ASSESSMENT YEAR: 2013-14 DCIT, CIR.2(1)(1) AHMEDABAD. VS HDB FINANCIAL SERVICES LTD. 2 ND FLOOR, RADHIKA LAW GARDEN NAVRANGPURA AHMEDABAD 380009. / (APPELLANT) / (RESPONDENT) REVENUE BY : SHRI MUDIT NAGPAL,SR.DR ASSESSEE BY : MS.IRA KAPOOR, WITH SHRI P.M. MEHTA / DATE OF HEARING : 02/08/2018 /DATE OF PRONOUNCEMENT : 13 /08/2018 O R D E R PER RAJPAL YADAV, JUDICIAL MEMBER : REVENUE IS IN APPEAL BEFORE THE TRIBUNAL AGAINST ORDER OF THE LD.CIT(A)- 2, AHMEDABAD DATED 28.9.2016 FOR THE ASSESSMENT YEAR 2013-14 CHALLENGI NG DELETION OF ADDITION OF RS.31,56,766/-MADE BY THE AO UNDER SECT ION 14A OF THE INCOME TAX ACT, 1961. 2. AT THE OUTSET, THE LD.COUNSEL FOR THE ASSESSEE F OR THE ASSESSEE POINTED OUT THAT THE APPEAL OF THE REVENUE IS NOT MAINTAINA BLE IN VIEW OF RECENT CBDT CIRCULAR NO.3/2018 DATED 11.7.2018 RESTRICTING THE FILLING OF THE APPEAL BY THE REVENUE WHERE THE TAX EFFECT IS BELOW RS.20 LAKH. THE TAX ITA NO.3193/AHD/2016 - 2 - EFFECT ON THE DISPUTED ADDITION IS BELOW RS.20 LAKH S, THEREFORE, APPEAL OF THE REVENUE IS LIABLE TO BE DISMISSED. LD.DR DID NO T DISPUTE THE SUBMISSIONS OF LD.COUNSEL FOR THE ASSESSEE, BUT SUB MITTED THAT THE ISSUE IS LEFT TO THE TRIBUNAL TO BE DECIDED IN ACCORDANCE W ITH LAW. 3. WE FIND THAT THE APPEAL OF THE REVENUE IS PRESEN TED ON 8.9.2016. ON 8.1.2016 THE CBDT HAS ISSUED INSTRUCTIONS BEARING N O. 3 OF 2018 UNDER FILE NO.F.NO.279/MISC.142/2007-ITJ(PT) PROHIBITING ITS SUBORDINATE AUTHORITIES FROM FILING OF THE APPEAL TO THE TRIBUN AL AGAINST THE ORDER OF THE CIT(A) WHERE THE TAX EFFECT BY VIRTUE OF THE RELIEF GIVEN BY THE CIT(A) IS LESS THAN RS.20 LAKHS. THE INSTRUCTIONS HAVE BEEN MADE APPLICABLE WITH RETROSPECTIVE EFFECT, MEANING THEREBY, THESE INSTRU CTIONS ARE APPLICABLE ON PENDING APPEALS ALSO. IN THE PRESENT CASE, THE DIS PUTED ADDITION IS OF RS.31,56,766/- UNDER SECTION 14A OF THE ACT, AND TH EREFORE, THE TAX EFFECT AS PER CBDT CIRCULAR IS TAX ON THE TOTAL IN COME ASSESSED MINUS THE TAX THAT WOULD HAVE BEEN CHARGEABLE HAD SUCH TOTAL INCOME BEEN REDUCED BY THE AMOUNT OF INCOME IN RESPECT OF THE ISSUE AGA INST WHICH APPEAL IS FILED, WOULD BE LESS THAN RS.20 LAKHS. THEREFORE, T HE PRESENT APPEAL OF THE REVENUE IS HIT BY THE CBDT CIRCULAR AND HENCE NOT M AINTAINABLE. FURTHER, LD.DR HAS NOT POINTED OUT WHETHER THE CASE OF THE R EVENUE FALL WITHIN THE AMBIT OF EXCEPTIONS PROVIDED IN THE CIRCULAR OR NOT . THUS, KEEPING IN VIEW THE ABOVE CBDT CIRCULAR AND PROVISIONS OF SECTION 2 68A OF THE INCOME TAX ACT, WE ARE OF THE VIEW THAT THE PRESENT APPEAL OF THE REVENUE DESERVES TO BE DISMISSED. IT IS ACCORDINGLY DISMISS ED. HOWEVER, IT IS OBSERVED THAT IN CASE ON RE-VERIFICA TION AT THE END OF THE AO IT COMES TO THE NOTICE THAT THE TAX EFFECT I S MORE OR REVENUES CASE FALLS WITHIN THE AMBIT OF EXCEPTIONS PROVIDED IN TH E CIRCULAR, THEN THE ITA NO.3193/AHD/2016 - 3 - DEPARTMENT WILL BE AT LIBERTY TO APPROACH THE TRIBU NAL FOR RECALL OF THIS ORDER. SUCH APPLICATION SHOULD BE FILED WITHIN THE TIME PERIOD PRESCRIBED IN THE ACT. IN VIEW OF THE ABOVE, THE APPEAL OF TH E REVENUE IS DISMISSED DUE TO LOW TAX EFFECT. 4. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. PRONOUNCED IN THE OPEN COURT ON 13 TH AUGUST, 2018. SD/- (WASEEM AHMED) ACCOUNTANT MEMBER SD/- (RAJPAL YADAV) JUDICIAL MEMBER