The ITO, Ward-15(4), Ahmedabad V. Shri Ravjibhai Jethabhai Desai, Ahmedabad

ITA 3393/AHD/2009

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 6555 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 5 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-06-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2007-2008
• Appeal Filed On: 23-12-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SAMIR TEKRIWA LA
• Keywords: Tax effect

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL : B BENCH : AHMEDABAD (BEFORE HONBLE SHRI T.K. SHARMA, J.M. & HONBLE SHRI A.K.GARODIA, A.M.) I.T.A. NO. 3393/AHD./2009 ASSESSMENT YEAR : 2007-2008 I.T.O., WARD-15(4), AHMEDABAD VS- RAVJIBHAI JETHABHAI DESAI, AHMEDABAD PAN : ABEPD 5856E) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI SAMIR TEKRIWA LA, SR.D.R. RESPONDENT BY : NONE O R D E R PER SHRI T.K. SHARMA, JUDICIAL MEMBER : THIS APPEAL IS FILED BY THE REVENUE AGAINST THE OR DER DATED 26-10-2009 OF LEARNED COMMISSIONER OF INCOME TAX(APPEALS)-XXI, AH MEDABAD FOR THE ASSESSMENT YEAR 2007-08 ON THE FOLLOWING GROUNDS :- (1) THE LEARNED CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING ADDITION OF RS.4,80,901/- U/S 10(10C) OF THE I.T.AC T, 1961. (2) IT IS THEREFORE PRAYED THAT THE ORDER OF THE LEARNE D CIT(A) MAY BE CANCELLED AND THAT THE ORDER OF THE ASSESSIN G OFFICER BE RESTORED. 2. THE LD. DEPARTMENTAL REPRESENTATIVE WAS ASKED WH Y THE APPEAL OF THE REVENUE SHOULD NOT BE TREATED AS UN-ADMITTED IN VIE W OF CIRCULAR F.NO.279/MISC.- 64/05-ITJ DATED 24 TH OCTOBER, 2005 AND THE DECISION OF THE HONBLE BOMB AY HIGH COURT IN THE CASE OF CIT VS. CAMCO COLOUR CO. [254 ITR 565 (BOM)] AND THE HONBLE APEX COURT IN THE CASE OF COMMISSIONER OF CUSTOMS V S. INDIAN OIL CORPORATION LTD. [267 ITR 272 (SC)]. THE LD. DEPARTMENTAL REPRESENTA TIVE CONTENDED THAT THE HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF RANI PAL IWAL VS. C.I.T. [268 I.T.R. 220], AND ALLAHABAD HIGH COURT IN THE CASE OF JUGAL KISHO RE ARORA VS. DCIT [269 I.T.R. 133] HAVE TAKEN THE VIEW THAT ONCE AN APPEAL IS FIL ED BY THE REVENUE, THE TRIBUNAL ITA NO.3393/AHD/2009 2 SHOULD DISPOSE OF THE APPEAL ON MERITS AND THE ASSE SSEE CANNOT RAISE THE OBJECTION AGAINST THE MAINTAINABILITY OF SUCH APPEAL. 3. WE HAVE CAREFULLY CONSIDERED THE ARGUMENTS OF TH E LD. DEPARTMENTAL REPRESENTATIVE AND PERUSED THE MATERIAL PLACED BEFO RE US. WE FIND THAT THE CBDT VIDE INSTRUCTION NO.2/2005 DATED 24 TH OCTOBER, 2005 ISSUES GUIDELINES TO THE REVENUE AUTHORITIES WITH REGARD TO FILING OF APPEAL BEFORE THE TRIBUNAL, HIGH COURT AND SUPREME COURT. FROM THE ABOVE INSTRUCTION, IT IS EV IDENT THAT SINCE 1987, THE CBDT IS INSTRUCTING ITS OFFICERS NOT TO FILE THE APPEAL WHE RE THE TAX EFFECT IS BELOW CERTAIN MONETARY LIMITS. VIDE INSTRUCTION NO. 1903 DATED 28 TH OCTOBER, 1992, THE MONETARY LIMIT WAS REVISED UPWARD AND THE OFFICERS WERE DIRE CTED NOT TO FILE THE APPEAL BEFORE THE INCOME-TAX APPELLATE TRIBUNAL WHERE THE TAX EFF ECT WAS BELOW RS.25,000/-. THE ABOVE MONETARY LIMIT WAS FURTHER REVISED UPWARD BY INSTRUCTION NO.1979 DATED 27 TH MARCH, 2000 AND THE OFFICERS WERE DIRECTED NOT TO F ILE THE APPEAL TO ITAT WHERE THE TAX EFFECT IS BELOW RS.1 LAC. THEREAFTER IN PARTIAL MODIFICATION OF THE ABOVE INSTRUCTION, THE BOARD VIDE INSTRUCTION NO.2/2005 DATED 24.10.20 05 HAS FURTHER RAISED THE ABOVE MONETARY LIMIT TO RS. 2 LAKHS WITH THE SAME DIRECTI ONS. THUS, THE CBDT SINCE 1987 HAS NOT ONLY TAKEN A CONSISTENT APPROACH OF INSTRUC TING ITS OFFICERS FOR NOT FILING THE APPEAL WHERE THE TAX EFFECT IS BELOW THE MONETARY L IMIT, BUT SUCH MONETARY LIMIT IS ALSO REVISED UPWARD FROM TIME TO TIME. THE CIRCULAR UNDER INSTRUCTION NO.1979 DATED 27.3.2006 WAS CONSIDERED BY THE BOMBAY HIGH COURT I N THE CASE OF CAMCO COLOUR CO. (SUPRA) AND THEIR LORDSHIPS HELD AT PAGE 568 AS UNDER:- IT APPEARS THAT DESPITE THE ABOVE CIRCULAR, THE RE VENUE HAS CHOSEN TO FILE THE PRESENT APPEAL KNOWING FULLY WELL THAT THE CORR IDORS OF THE COURTS ARE FLOODED WITH PENDING LITIGATIONS. THE PRESENTATION OF THIS APPEAL IS QUITE CONTRARY TO THE INSTRUCTION ISSUED IN THE CIRCULAR WHICH IS BINDING ON THE REVENUE. IN THE ABOVE VIEW OF THE MATTER, CONSIDERING THE IN STRUCTIONS ISSUED BY THE CENTRAL BOARD OF DIRECT TAXES, WE ARE SATISFIED THA T THE BOARD HAS TAKEN A POLICY DECISION NOT TO FILE APPEAL IN A TYPE OF CAS E IN HAND AND THE SAME IS FINDING ON THE REVENUE (APPELLANT HEREIN). IN THE R ESULT, WE DISMISS THIS APPEAL ON THIS COUNT IN LIMINE WITH NO ORDER AS TO COSTS. ITA NO.3393/AHD/2009 3 4. THE LD. DEPARTMENTAL REPRESENTATIVE HAS RELIED U PON THE CONTRARY DECISIONS GIVEN BY THE HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF RANI PALIWAL (SUPRA) AND ALLAHABAD HIGH COURT IN THE CASE OF JUG AL KISHORE ARORA (SUPRA). HOWEVER, WE FIND THAT RECENTLY THE APEX COURT HAS C ONSIDERED THE EFFECT OF CIRCULAR ISSUED BY THE CBDT IN THE CASE OF COMMISSIONER OF C USTOMS VS. INDIAN OIL CORPORATION LTD. 267 ITR 272. THEIR LORDSHIPS EXAMI NED THE EARLIER DECISIONS OF THE APEX COURT WITH REGARD TO BINDING NATURE OF THE CIR CULAR AND LAID DOWN THE FOLLOWING PRINCIPLES AT PAGE 277 OF THE REPORTS :- THE PRINCIPLES LAID DOWN BY ALL THESE DECISIONS AR E (1) ALTHOUGH A CIRCULAR IS NOT BINDING ON A COURT O R AN ASSESSEE, IT IS NOT OPEN TO THE REVENUE TO RAISE A CONTENTION THAT IS C ONTRARY TO A BINDING CIRCULAR BY THE BOARD. WHEN A CIRCULAR REMAINS IN O PERATION, THE REVENUE IS BOUND BY IT AND CANNOT BE ALLOWED TO PLE AD THAT IT IS NOT VALID NOR THAT IT IS CONTRARY TO THE TERMS OF THE STATUTE . (2) DESPITE THE DECISION OF THIS COURT, THE DEPARTM ENT CANNOT BE PERMITTED TO TAKE A STAND CONTRARY TO THE INSTRUCTI ONS ISSUED BY THE BOARD. (3) A SHOW CAUSE NOTICE AND DEMAND CONTRARY TO EXIS TING CIRCULARS OF THE BOARD ARE AB INITIO BAD. (4) IT IS NOT OPEN TO THE REVENUE TO ADVANCE AN AR GUMENT OR FILE AN APPEAL CONTRARY TO THE CIRCULARS. (EMPHASIS SUPPLIED) FROM THE ABOVE, IT IS EVIDENT THAT THE HONBLE APE X COURT HAS LAID DOWN THAT IT IS NOT OPEN TO THE REVENUE TO ADVANCE AN ARGUMENT O R FILE AN APPEAL CONTRARY TO THE CIRCULAR. THE APPEAL UNDER CONSIDERATION HAS CERTAI NLY BEEN FILED CONTRARY TO THE CIRCULAR ISSUED BY THE CBDT VIDE CIRCULAR F. NO. 27 9/MISC-64/05-ITJ DATED 24 TH OCTOBER, 2005. THEREFORE, THE ABOVE DECISION OF THE HONBLE APEX COURT WOULD BE SQUARELY APPLICABLE. EVEN OTHERWISE, THE REVENUE HA S BEEN TAKING A CONSISTENT APPROACH SINCE 1987 NOT TO FILE APPEAL WHERE THE RE VENUE EFFECT IS BELOW CERTAIN MONETARY LIMIT TO REDUCE THE LITIGATION PENDING BEF ORE THE TRIBUNAL AND THE COURTS. IF THE APPEALS CONTRARY TO SUCH CIRCULAR ARE ADMITTED, IT WOULD FRUSTRATE THE PURPOSE OF ISSUING SUCH INSTRUCTIONS. IN THE ABOVE CIRCUMSTANC ES, WE RESPECTFULLY FOLLOWING THE DECISION OF THE HONBLE APEX COURT IN THE CASE OF I NDIAN OIL CORPORATION LTD. (SUPRA) ITA NO.3393/AHD/2009 4 AND BOMBAY HIGH COURT IN THE CASE OF CAMCO COLOUR C O. (SUPRA), HOLD THAT THE REVENUE SHOULD NOT HAVE FILED THE APPEAL CONTRARY T O THE CIRCULAR ISSUED BY THE CBDT. ACCORDINGLY, THE SAME IS NOT ADMITTED AND BEI NG DISMISSED IN LIMINE. 5. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED. THE ORDER PRONOUNCED IN THE OP EN COURT ON 07.06.2011 SD/- SD/- (A.K.GARODIA) (T.K. SHARMA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 07 / 06 / 2011 COPY OF THE ORDER IS FORWARDED TO:- (1) THE ASSESSEE (2) THE DEPARTMENT. (3) CIT (A.) CONCERNED. (4) CIT CONCERNED. (5) D.R., ITAT, AHMEDABAD. TRUE COPY BY ORDER DEPUTY REGISTRAR, ITAT, AH MEDABAD. TALUKDAR/ SR. P.S.