ACIT, New Delhi V. Charlie Don Jarreau, Faridabad

ITA 3269/DEL/2010

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 58417 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 6 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-01-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 02-01-2012
• Assessment Year: 2004-2005
• Appeal Filed On: 02-07-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: ROHIT JAINMS PINKY KAPOOR
• Keywords: Gift; Block assessment; Tax effect
• Section: 260A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH `B : NEW DELHI) BEFORE SHRI U.B.S. BEDI, JUDICIAL MEMBER AND SHRI B.C. MEENA, ACCOUNTANT MEMBER ITA NO.3269/DEL./2010 (ASSESSMENT YEAR : 2004-05) ACIT, CIRCLE 42(1), VS. CHARLIE DON JARREAU, NEW DELHI. C/O GOODYEAR (INDIA) LIMITED, MATHURA ROAD, BALLABGARH, DISTT. FARIDABAD (HARYANA). (PAN/GIR NO.AFDPJ8469E) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI ROHIT JAIN/MS. PINKY KAPOOR, ADV . REVENUE BY : SHRI ROHIT GARG, SR.DR ORDER PER U.B.S. BEDI, J.M. AT THE VERY OUTSET, LD.COUNSEL FOR THE ASSESSEE SU BMITTED THAT TAX EFFECT IN THIS CASE IS LESS THAN THE LIMIT PRESCRIBED BY LATEST CB DTS INSTRUCTION NO.3/2011 DATED 09.02.2011. THEREFORE, THIS APPEAL OF THE REVENUE IS NOT MAINTAINABLE AND THE SAME MAY BE DISMISSED. LD.DR. COULD NOT CONTROVERT THIS FAC TUAL ASPECT, BUT SUBMITTED THAT SINCE APPEAL HAS BEEN FILED BY THE DEPARTMENT, THE SAME S HOULD BE DECIDED ON MERIT. 2. WE HAVE HEARD BOTH THE PARTIES AND CONSIDERED TH E MATERIAL ON RECORD AND FIND THAT THE TAX EFFECT IN THIS CASE IS UNDISPUTEDLY LE SS THAN THE LIMIT PRESCRIBED BY INSTRUCTION NO. 3/2011 DATED 09.02.2011 AND DEPARTMENT HAS NOT BEEN ABLE TO PLACE MATERIAL TO SHOW THAT ITS CASE FALLS IN THE EXCEPTIONS PROVIDED IN T HE SAID INSTRUCTIONS OF CBDT AND ISSUE IS ALSO FOUND TO BE COVERED BY VARIOUS ITA DECISIONS I NCLUDING THAT OF ITAT DELHI BENCH IN CASE OF SHRI VIKRAM BHATNAGAR ITA NO. 60/D/2002, OR DER DATED 10.3.2006. 3. FURTHER HONBLE BOMBAY HIGH COURT IN THE CASE OF PITHWA ENGG. WORKS (276 ITR 519), HAVE OBSERVED AS UNDER :- ONE FAILS TO UNDERSTAND HOW THE REVENUE CAN CONTEN D THAT SO FAR AS NEW CASES ARE CONCERNED, THE CIRCULAR ISSUED BY THE BOA RD IS BINDING ON THEM AND IN COMPLIANCE WITH THE SAID INSTRUCTIONS, THEY DO NOT FILE REFERENCES IF THE TAX EFFECT IS LESS THAN RS. 2 LAKHS. BUT THE SA ME APPROACH IS NOT ADOPTED WITH RESPECT TO THE OLD REFERRED CASES EVEN IF THE TAX EFFECT IS LESS THAN RS. 2 LAKH. IN OUR VIEW, THERE IS NO LOGIC BEH IND THIS APPROACH. THIS COURT CAN VERY WELL TAKE JUDICIAL NOTICE OF TH E 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 DEPARTME NT ALSO INCREASED TO A TREMENDOUS EXTENT. THE CORRIDORS OF THE SUPERIOR CO URTS ARE CHOKED WITH HUGE PENDENCY OF CASES. IN THIS VIEW OF THE MATTER, THE BOARD HAS RIGHTLY TAKEN A DECISION NOT TO FILE REFERENCES IF THE TAX EFFECT IS LESS THAN RS. 2 LAKHS. THE SAME POLICY FOR OLD MATTERS NEEDS TO BE ADOPTED BY THE DEPARTMENT. IN OUR VIEW, THE BOARDS CIRCULAR DATED MARCH, 27, 2000 IS VERY MUCH APPLICABLE EVEN TO THE OLD REFERENCES WHI CH ARE STILL UNDECIDED. THE DEPARTMENT IS NOT JUSTIFIED IN PROCEEDING WITH THE OLD REFERENCES WHEREIN THE TAX IMPACT IS MINIMAL. THUS, THERE IS N O JUSTIFICATION TO PROCEED WITH DECADES OLD REFERENCES HAVING NEGLIGIB LE TAX EFFECT. 4. IT IS ALSO SEEN THAT RECENTLY THE HONBLE JURISD ICTIONAL HIGH COURT VIDE THEIR ORDER DATED 1.8.2007 IN ITA NO. 683/2007 IN THE CASE OF C IT V. MANISH BHAMBRI HAS UPHELD THE ORDER OF TRIBUNAL VIDE WHICH THE APPEAL FILED B Y THE REVENUE WAS REFUSED TO BE ENTERTAINED BECAUSE OF LOW TAX EFFECT. THE SAID ORD ER OF HONBLE JURISDICTIONAL HIGH COURT IS REPRODUCED BELOW FOR THE SAKE OF CONVENIEN CE :- THE REVENUE IS AGGRIEVED BY AN ORDER DATED 8 TH AUGUST, 2006 PASSED BY THE INCOME TAX APPELLATE TRIBUNAL, DELHI BENCH D IN IT(SS) NO. 513/DEL/2003 RELEVANT FOR THE BLOCK PERIOD 1 ST 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 ASSESSE E AND SINCE 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. 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 YEAR 2001-2002. IT MAY ALSO BE MENTIONED THAT FOR THE AS SESSMENT YEAR 1999- 2000, THE ASSESSING OFFICER HAS ALREADY ACCEPTED TH E EXPLANATION WITH REGARD TO A GIFT OF RS. 60,000/- AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS),-AN APPEAL WAS FILED BEFORE THE INCOME TAX APPELLATE TR IBUNAL. THE TRIBUNAL FOUND THAT IN VIEW OF INSTRUCTIONS ISSUED BY THE CB DT WHERE THE TAX EFFECT IS LESS THAN RE. 1 LAKH. THE DEPARTMENT SHOULD NOT FILE AN APPEAL BEFORE THE TRIBUNAL. IN THE PRESENT CASE THE TAX EFFECT IS LESS THAN RE. 1 LAKH. UNDER THE CIRCUMSTANCES, THE TRIBUNAL DID NOT ENTER TAIN 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 T HE TRIBUNAL IS A FACT FINDING AUTHORITY AND SHOULD HAVE ADJUDICATED THE M ATTER ON MERITS. WE ARE OF THE VIEW THAT THE ISSUE RAISED BY THE REVENUE IS NOT AT ALL SUBSTANTIAL AND THE AMOUNT IN DISPUTE IS QUITE INSIGNIFICANT, CONSI DERING THAT THE CASE IS ONE OF A BLOCK ASSESSMENT. THERE IS NO JUSTIFICATIO N FOR THE INCOME TAX DEPARTMENT TO GO ON BURDENING THE TRIBUNAL, THE COU RT WITH EVERY CASE RIGHT UP TO THE END. APART FROM BURDENING THE TRIB UNAL AND COURTS, IT ALSO CAUSES AVOIDABLE EXPENSES TO THE ASSESSEE. IT IS C OMMON KNOWLEDGE THAT THE ASSESSEE HAS TO PAY FOR LEGAL FEES AND MERELY B ECAUSE 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 QUES TION OF LAW ARISES. WE, THEREFORE, DISMISS THIS APPEAL. 5. SINCE, TAX EFFECT IS LESS THAN THE LIMIT PRESCRI BED, SO IN VIEW OF THE INSTRUCTIONS AND PRECEDENTS OF COURTS AS CITED ABOVE INCLUDING THAT OF DELHI HIGH COURT, THE APPEAL IS HELD TO BE NOT MAINTAINABLE, AS SUCH, IS DISMISSED. 6. IN THE RESULT, THE APPEAL FILED BY THE DEPARTMEN T IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 3 RD JANUARY, 2012. SD/- SD/- (B.C. MEENA) ACCOUNTANT MEMBER (U.B.S. BEDI ) JUDICIAL MEMBER DATED : JANUARY 03, 2012 SKB COPY OF THE ORDER FORWARDED TO:- 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A)-XIV, NEW DELHI. 5. DR BY ORDER DEPUTY REGISTRAR, ITAT