ITO, New Delhi V. M/s Tubecon (India) Pvt. Ltd., New Delhi

ITA 3301/DEL/2011

• Counselvise Citation: 330120114 RSA 2011
• Duration Of Justice: 3 year(s) 11 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-06-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: H
• Next Hearing Date: 18-06-2015
• Assessment Year: 2002-2003
• Appeal Filed On: 21-06-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: J P CHANDREKAR
• Assessee Lawyers: DHARENDER KUMAR
• Keywords: Retrospective amendment; Tax effect
• Section: 131; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH H , NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI J.S. REDDY, ACCOUNTANT MEMBER ITA NO . 3301 / DEL/201 1 ASSESSMENT YEAR: 20 0 2 - 03 INCOME TAX OFFICER - 16(4), VS. M/S TUBECON (INDIA) PVT. R.NO. 143, CR BUILDING, LTD., NEW DELHI AG - 154A, SHALIMAR BAGH, DELHI - 110 088 (PAN: AABCT4738L) (APPELLANT) (RESPONDENT) APPELLANT BY : SH. J.P. CHANDREKAR, SR. DR RESPONDENT BY : SH. DHARENDER KUMAR , CA DATE OF HEARING : 18 - 0 6 - 2015 DATE OF ORDER : 1 8 - 0 6 - 2015 ORDER PER H.S. SIDHU, J.M. THIS APPEAL BY THE DEPARTMENT IS DIRECTED AGAINST THE ORDER DATED 04 . 4 .201 1 OF L D. CIT(A) - XIX , NEW DELHI PERTAINING TO ASSESSMENT YEAR 20 0 2 - 03 . 2. THE GROUNDS RAISED IN THE APPEAL OF THE DEPARTMENT READ AS UNDER: 1. THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW BY DELETING ADDITION OF RS. 10,85,000/ - MADE UNDER SECTION 68 OF THE ACT ON ACCOUNT OF UNEXPLAINED RECEIPTS OF SHARE APPLICATION MONEY BY NOT D ECIDING ENTIRELY ON MERITS THE CONTENTIONS OF THE AO IN THE ASSESSMENT ORDER AND BY IGNORING THAT : (I) THE CREDITWORTHINESS OF THE SHARE APPLICANTS TO ADVANCE THE SHARE APPLICATION MONEY HAS NOT BEEN ESTABLISHED EITHER DURING THE ASSESSMENT PROCEEDING S OR DURING THE APPELLATE PROCEEDINGS. ITA NO . 3301 / D EL /20 1 1 ( ITO VS. TUBECON (INDIA) PVT. LTD. 2 (II) SUMMONS U/S. 131 SENT TO THE SHARE APPLICANTS CAME BACK UNSERVED EVEN THOUGH THE SAME WERE SENT AT THEIR ADDRESSES AS FURNISHED BY THE ASSESSEE COMPANY. (III) DESPITE ADEQUATE OPPORTUNITY, NEITHER THE INDIVIDUAL SHARE APPLICANTS NOR PRINCIPAL OFFICERS THE SHARE APPLICANT COMPANIES WERE PRODUCED BY THE ASSESSEE COMPANY FOR CROSS VERIFICATION. (IV) AS PER THE FINDINGS OF THE INVESTIGATION WING BROUGHT ON RECORD IN THE ASSESSMENT ORDER THE SHARE APPLICATION MONEY RECEIVED B Y THE ASSESSEE WAS IN THE NATURE OF ACCOMMODATION ENTIRES WHICH THE ASSESSEE HAD TAKEN AFTER PAYING UNACCOUNTED CASH TO THE ACCOMMODATION ENTRY PROVIDERS. 2. THE APPELLANT CRAVES LEAVE FOR RESERVING THE RIGHT TO AMEND, MODIFY, ALTER, ADD OR FOREGO GROUND (S) OF APPEAL AT ANY TIME BEFORE OR DURING THE HEARING OF APPEAL. 3. AT THE TIME OF HEARING , SHRI DHARENDER KUMAR, CA/AUTHORISED REPRESENTATIVE OF THE ASSESSEE STATED THAT THE TAX EFFECT IN THIS APPEAL IS LESS THAN RS.4,00,000/ - , THEREFORE, THE DEPART MENT OUGHT NOT TO HAVE FILED THIS APPEAL IN VIEW OF THE CIRCULAR ISSUED BY THE CBDT AND THE PROVISIONS CONTAINED IN THE SECTION 268A OF THE INCOME TAX ACT, 1961 (HEREINAFTER TO BE REFERRED AS THE ACT). 4. ON THE OTHER HAND, L D. DR SUPPORTED THE ORDER OF AO , BUT COULD NOT CONTROVERT THIS FACT THAT THE TAX EFFECT IN THIS APPEAL IS LESS THAN RS. 4,00,000/ - . 5. AFTER CONSIDERING THE SUBMISSIONS OF BOTH THE PARTIES AND THE MATERIAL ON RECORD, IT IS NOTICED THAT SECTION 268A HAS BEEN INSERTED BY THE FINANCE ACT, 2008 WITH RETROSPECTIVE EFFECT FROM 01/04/1999. THE RELEVANT PROVISIONS CONTAINED IN SECTION 268A READ AS UNDER: 268A. (1) THE BOARD MAY, FROM TIME TO TIME, ISSUE ORDERS, INSTRUCTIONS OR DIRECTIONS TO OTHER INCOME - TAX AUTHORITIES, FIXING SUCH MONE TARY LIMITS AS IT MAY DEEM FIT, FOR THE PURPOSE OF REGULATING FILING OF APPEAL OR APPLICATION FOR REFERENCE BY ANY INCOME - TAX AUTHORITY UNDER THE PROVISIONS OF THIS CHAPTER. (2) WHERE, IN PURSUANCE OF THE ORDERS, INSTRUCTIONS OR DIRECTIONS ISSUED UNDER SU B - SECTION (1), AN INCOME - TAX AUTHORITY HAS NOT FILED ANY APPEAL OR APPLICATION FOR REFERENCE ON ANY ISSUE IN THE CASE OF AN ITA NO . 3301 / D EL /20 1 1 ( ITO VS. TUBECON (INDIA) PVT. LTD. 3 ASSESSEE FOR ANY ASSESSMENT YEAR, IT SHALL NOT PRECLUDE SUCH AUTHORITY FROM FILING AN APPEAL OR APPLICATION FOR REFERENCE ON THE SAM E ISSUE IN THE CASE OF (A) THE SAME ASSESSEE FOR ANY OTHER ASSESSMENT YEAR; OR (B) ANY OTHER ASSESSEE FOR THE SAME OR ANY OTHER ASSESSMENT YEAR; (3) NOTWITHSTANDING THAT NO APPEAL OR APPLICATION FOR REFERENCE HAS BEEN FILED BY AN INCOME - TAX AUTHORITY P URSUANT TO THE ORDERS OR INSTRUCTIONS OR DIRECTIONS ISSUED UNDER SUB - SECTION (1), IT SHALL NOT BE LAWFUL FOR AN ASSESSEE, BEING A PARTY IN ANY APPEAL OR REFERENCE, TO CONTEND THAT THE INCOME - TAX AUTHORITY HAS ACQUIESCED IN THE DECISION ON THE DISPUTED ISS UE BY NOT FILING AN APPEAL OR APPLICATION FOR REFERENCE IN ANY CASE. (4) THE APPELLATE TRIBUNAL OR COURT, HEARING SUCH APPEAL OR REFERENCE, SHALL HAVE REGARD TO THE ORDERS, INSTRUCTIONS OR DIRECTIONS ISSUED UNDER SUB - SECTION (1) AND THE CIRCUMSTANCES UNDE R WHICH SUCH APPEAL OR APPLICATION FOR REFERENCE WAS FILED OR NOT FILED IN RESPECT OF ANY CASE. (5) EVERY ORDER, INSTRUCTION OR DIRECTION WHICH HAS BEEN ISSUED BY THE BOARD FIXING MONETARY LIMITS FOR FILING AN APPEAL OR APPLICATION FOR REFERENCE SHALL BE DEEMED TO HAVE BEEN ISSUED UNDER SUB - SECTION (1) AND THE PROVISIONS OF SUB - SECTIONS (2), (3) AND (4) SHALL APPLY ACCORDINGLY. 6 . IT IS NOT IN DISPUTE THAT T HE BOARD S INSTRUCTION OR DIRECTIONS ISSUED TO THE OTHER INCOME - TAX AUTHORITIES ARE BINDING ON TH OSE AUTHORITIES, THEREFORE, THE DEPARTMENT OUGHT NOT TO HAVE FILED THE APPEAL IN VIEW OF THE ABOVE MENTIONED SECTION 268A SINCE THE TAX EFFECT IN THE INSTANT CASE IS LESS THAN THE AMOUNT PRESCRIBED FOR NOT FILING THE APPEAL. 7 . IT IS NOTICED THAT THE CBDT HAS ISSUED INSTRUCTION NO. 5/2014 DATED 10 TH JULY, 2014, BY WHICH THE CBDT HAS REVISED THE MONETARY LIMIT TO RS. 4,00,000/ - FOR FILING THE APPEAL BEFORE THE TRIBUNAL. 8 . KEEPING IN VIEW THE CBDT INSTRUCTION NO. 5 OF 2014 DATED 10 TH JULY, 2014 AND ALSO THE PROVISIONS OF SECTION 268A OF INCOME TAX ACT, 1961 , WE ARE OF THE VIEW THAT THE REVENUE SHOULD NOT HAVE FILED THE INSTANT APPEAL BEFORE THE TRIBUNAL. WHILE TAKING SUCH A VIEW, WE ARE FORTIFIED BY THE FOLLOWING DECISIONS OF THE HON BLE PUNJAB & HARYANA HI GH COURT: 1. CIT VS. OSCAR LABORATORIES P. LTD. (2010) 324 ITR 115 (P&H); 2. CIT VS. ABINASH GUPTA (2010) 327 ITR 619 (P&H); ITA NO . 3301 / D EL /20 1 1 ( ITO VS. TUBECON (INDIA) PVT. LTD. 4 3. CIT VS. VARINDERA CONSTRUCTION CO. (2011) 331 ITR 449 (P&H) (FB). 9 . SIMILARLY, THE HON BLE DELHI HIGH COURT IN THE CASE OF CIT VS. DELH I RACE CLUB LTD. IN ITA NO. 128/2008, ORDER DATED 03.03.2011 BY FOLLOWING THE EARLIER ORDER DATED 02.08.2010 IN ITA NO. 179/1991 IN THE CASE OF CIT DELHI - III VS. M/S P.S. JAIN & CO. HELD THAT SUCH CIRCULAR WOULD ALSO BE APPLICABLE TO PENDING CASES. 1 0 . THU S, FROM THE RATIO LAID DOWN BY THE HON BL DELHI HIGH COURT, IT IS CLEAR THAT THE INSTRUCTIONS ISSUED IN THE CIRCULARS BY CBDT ARE APPLICABLE FOR PENDING CASES ALSO. THEREFORE, BY KEEPING IN VIEW THE RATIO LAID DOWN IN THE AFORESAID REFERRED TO CASE, WE AR E OF THE CONSIDERED VIEW THAT INSTRUCTION NO. 5 OF 2014 DATED 10 TH JULY, 2014 ISSUED BY THE CBDT ARE APPLICABLE FOR THE PENDING CASES ALSO AND IN THE SAID INSTRUCTIONS, MONETARY TAX LIMIT FOR NOT FILING THE APPEAL BEFORE THE ITAT IS RS. 4,00,000/ - . 1 1 . IN VIEW OF THE ABOVE, WITHOUT GOING INTO MERIT OF THE CASE, WE DISMISS THE APPEAL FILED BY THE REVENUE. 1 2 . IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 1 8 / 6 /201 5 . SD/ - SD/ - ( J.S. REDDY ) ( H.S. SIDHU ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 1 8 / 6 /201 5 * SR BHATNAGAR* COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR