The DCIT, Central Circle-1, Baroda V. Smt. Richa Sumit Bhatnagar, Baroda

ITA 3440/AHD/2016

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 5110 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 7 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-08-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2012-2013
• Appeal Filed On: 20-12-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: M J SHAH
• Keywords: Retrospective amendment; Tax effect
• Section: 143(3); 132

Judgement Text

, A IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER ./ ITA NO.3440/AHD/2016 / ASSTT. YEAR: 2012-2013 DCIT, CENT.CIR.1 AAYAKAR BHAVAN BARODA 390 007. VS. SMT.RICHA SUMIT BHATNAGAR R.S.217, PLOT NO.1 & 2 SUMADHUR NEW ALKAPURI GOTRI ROAD BARODA 390 02. PAN : ADFPB 9328 Q / (APPELLANT) / (RESPONDENT) REVENUE BY : SHRI KEYUR PATEL, SR.DR ASSESSEE BY : SHRI M.J. SHAH, AR / DATE OF HEARING : 25/07/2018 / DATE OF PRONOUNCEMENT: 02 /08/2018 !/ O R D E R PER RAJPAL YADAV, JUDICIAL MEMBER: BY THIS APPEAL REVENUE IS CHALLENGING ORDER OF THE LD.CIT(A) DATED 1.9.2016 WHEREIN THE LD.CIT(A) HAS DELETED QU ANTUM ADDITION UNDER SECTION 143(3) AND DELETION OF PENALTY UNDER SECTION 271AAA OF THE INCOME TAX ACT MADE BY THE AO. 2. IT IS PERTINENT TO NOTE THAT SUBSEQUENT TO THE S EARCH ACTION UNDER SECTION 132 OF THE ACT CARRIED OUT IN THE DIAMOND C ABLE GROUP OF CASES, ITA NO.3440 /AHD/2016 2 BARODA, IN WHICH ASSESSEE WAS ALSO INCLUDED, AN ASS ESSMENT ORDER IN THE CASE OF THE ASSESSEE WAS PASSED ON 24.3.2014 IN ASS TT.YEAR 2012-13. THE AO HAS DETERMINED TAXABLE INCOME OF THE ASSESSE E AT RS.43,30,960/- UNDER SECTION 143(3). HE IMPOSED PENALTY VIDE ORDE R DATED 26.9.2014 IN THE PROCEEDINGS UNDER SECTION 271AAA OF THE INCOME TAX ACT OF RS.4.00 LAKHS WHICH IS 10% OF THE UNDISCLOSED INCOM E DETERMINED IN HER HAND. 3. DISSATISFIED WITH THESE ORDERS, ASSESSEE HAS FIL ED TWO APPEALS BEFORE THE LD.CIT(A) BEARING APPEAL NO.CIT(A)-12/34 8/CC1/BARODA/14- 15 (QUANTUM) AND APPEAL NO.CIT(A)-12/438/CC1/BARODA /14-15 (271AAA). THE LD.CIT(A) BY THE IMPUGNED ORDER ALLO WED THE CLAIM OF THE ASSESSEE AND DELETED BOTH ADDITION AND PENALTY UNDER SECTION 271AAA OF THE ACT. 4. A PERUSAL OF THE RECORD REVEALS THAT LD.PRINCIPA L COMMISSIONER OF INCOME TAX, CENTRAL, SURAT HAS AUTHORIZED DCIT, CEN T.CIR.1, BARODA TO FILE APPEAL TO THE ITAT, AHMEDABAD AGAINST ORDER OF THE LD.CIT(A). HE AUTHORIZED DCIT TO FILE APPEAL AGAINST DELETION OF QUANTUM AS WELL AS PENALTY. DEPARTMENT HAS FILED APPEAL TAKING BOTH T HE ORDERS IN ONE APPEAL. IN OTHER WORDS, THE DEPARTMENT HAS CHALLEN GED DELETION OF QUANTUM AS WELL AS DELETION OF PENALTY. BOTH THESE GRIEVANCES HAVE BEEN PLEADED IN ONE APPEAL. THE PROCEDURE DOES NOT AUTH ORISE APPELLANT TO CHALLENGE TWO ORDERS OF CIT(A) IN ONE APPEAL. THER E ARE SEPARATE REMEDIES AVAILABLE FOR CHALLENGING ORDER OF THE LD. CIT(A). ADJUDICATING AUTHORITY DISPOSED OF BOTH APPEALS OF THE ASSESSEE FOR THE CONVENIENCE OF ITA NO.3440 /AHD/2016 3 THE DISPOSAL THAT DOES NOT MEAN THAT IT WOULD BECOM E ONE ORDER AND COULD BE CHALLENGED IN ONE APPEAL. EXECUTABILITY O F ORDER OF THE CIT(A) IS AN INDEPENDENT QUA QUANTUM ADDITION AS WELL PENALTY. SAY, FOR EXAMPLE, IF AN ADDITION AND PENALTY BOTH WERE CONFI RMED, THEN AO WOULD HAVE GIVEN EFFECT SEPARATE. THIS IS PROCEDUR ALLY WRONG AND APPEAL IS DEFECTIVE. IT IS ALSO PERTINENT TO NOTE THAT FO RM NO.35 I.E. APPEAL FORM FILED BEFORE THE CIT(A) ANNEXED WITH THIS APPEAL RE LATES TO FORM FILED BY THE ASSESSEE CHALLENGING PENALTY ORDER. THUS, IN A WAY IT SUGGESTS THAT THIS APPEAL HAS BEEN FILED QUA PENALTY ORDER. CONSIDERING THESE ASPECTS, WE ARE OF THE VIEW THAT ONLY ONE APPEAL SHOULD BE F ILED FOR ONE PROCEEDING IN ACCORDANCE WITH THE PROCEDURE, AND WE TREAT THIS APPEAL AS CHALLENGE TO DELETION OF QUANTUM ADDITION. THE SIM PLE REASON IS THAT IN THE PENALTY APPEAL, DELETION MADE BY THE CIT(A) IS LESS THAN RS.10 LAKHS. ORDER WAS PASSED BY THE CIT(A) IN THIS APPEAL ON 1. 9.2016. IN THE MONTH OF DECEMBER, 2015, CBDT HAS ISSUED A CIRCULAR PROHIBITING AUTHORITIES FROM CHALLENGING ORDERS OF THE CIT(A) W HERE TAX EFFECT BY VIRTUE OF RELIEF GIVEN BY THE CIT(A) IS LESS THAN R S.10 LAKHS. HAD A PROPOSAL FOR FILING APPEAL AGAINST PENALTY ORDER BE ING PUT UP SEPARATELY BEFORE THE LD.PRINCIPAL COMMISSIONER, HE WOULD HAVE NOT AUTHORIZED TO FILE APPEAL CHALLENGING THE DELETION OF PENALTY BEC AUSE, RELIEF GIVEN IN THE PENALTY PROCEEDINGS IN THIS APPEAL WAS LESS THA N RS.10 LAKHS. KEEPING IN VIEW THIS CIRCUMSTANCE, WE TREAT THIS AP PEAL AS FOR CHALLENGING DELETION OF QUANTUM ADDITION. WE DISPO SE OF ACCORDINGLY HEREINBELOW. ITA NO.3440 /AHD/2016 4 5. AS DISCUSSED ABOVE, REVENUE IS CHALLENGING DELET ION OF ADDITION MADE BY THE LD.CIT(A). 6. AT THE OUTSET, AFTER GOING THROUGH THE GROUNDS O F APPEAL AND THE IMPUGNED ORDERS OF THE REVENUE AUTHORITIES BELOW, A QUERY WAS RAISED BY THE BENCH AS TO APPLICABILITY AND MAINTAINABILIT Y OF THE APPEAL FILED BY THE REVENUE IN VIEW OF CBDT CIRCULAR NO.3/2018 D ATED 11.7.2018 RESTRICTING THE FILLING OF THE APPEAL BY THE REVENU E WHERE THE TAX EFFECT IS BELOW RS.20 LAKHS, THE LD.DR DID NOT DISPUTE THE SA ME AND SUBMITTED THAT THE ISSUE IS LEFT TO THE TRIBUNAL TO BE DECID ED IN ACCORDANCE WITH LAW. 7. WE FIND THAT THE APPEAL OF THE REVENUE IS PRESEN TED ON 20.12.2016. ON 11.7.2018 THE CBDT HAS ISSUED INSTRUCTIONS BEARI NG NO. 3 OF 2018 UNDER FILE NO.F.NO.279/MISC.142/2007-ITJ(PT) PROHIB ITING ITS SUBORDINATE AUTHORITIES FROM FILING OF APPEAL TO TH E TRIBUNAL AGAINST 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 INSTRUCTI ONS HAVE BEEN MADE APPLICABLE WITH RETROSPECTIVE EFFECT, MEANING THERE BY, THESE INSTRUCTIONS ARE APPLICABLE ON PENDING APPEALS ALSO. IN THE PRE SENT CASE, TAX EFFECT ON THE TOTAL INCOME ASSESSED MINUS THE TAX THAT WOU LD HAVE BEEN CHARGEABLE HAD SUCH TOTAL INCOME BEEN REDUCED BY TH E AMOUNT OF INCOME IN RESPECT OF THE ISSUE AGAINST WHICH APPEAL IS FIL ED, IS LESS THAN RS.20 LAKHS. BESIDES, THE CASE OF THE REVENUE DOES NOT FA LL WITHIN THE AMBIT OF EXCEPTIONS PROVIDED IN THE CIRCULAR. THUS, KEEPING IN VIEW THE ABOVE CBDT CIRCULAR AND PROVISIONS OF SECTION 268A OF THE INCOME TAX ACT, ITA NO.3440 /AHD/2016 5 WE ARE OF THE VIEW THAT THE PRESENT APPEAL OF THE R EVENUE DESERVES TO BE DISMISSED. IT IS ACCORDINGLY DISMISSED. 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 THE CIRCULAR, THEN THE DEPARTMENT WILL BE AT LIBERTY TO APPROACH THE T RIBUNAL FOR RECALL OF THIS ORDER. SUCH APPLICATION SHOULD BE FILED WITHI N THE TIME PERIOD PRESCRIBED IN THE ACT. IN VIEW OF THE ABOVE, THE A PPEAL OF THE REVENUE IS DISMISSED DUE TO LOW TAX EFFECT. 8. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN THE COURT ON 2 ND AUGUST, 2018 AT AHMEDABAD. SD/- SD/- (AMARJIT SINGH) ACCOUNTANT MEMBER (RAJPAL YADAV) JUDICIAL MEMBER