The DCIT, Central Circle-1, Baroda V. Shri Sumit Suresh Bhatnagar, Baroda

ITA 3441/AHD/2016

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 5091 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 7 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-08-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2012-2013
• Appeal Filed On: 20-12-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V K SINGH
• Assessee Lawyers: M J SHAH
• Keywords: Retrospective amendment; Tax effect

Judgement Text

, A IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, AHMEDABAD BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER SR. NO. ITA NO. AND ASSTT.YEAR APPELLANT RESPONDENT 1. 3439/AHD/2016 ASSTT.YEAR 2012-13 DCIT, CENT.CIR.1, BARODA. SMT.MONA AMIT BHATNAGAR B/H. FUNTIME, NR. GREENWOOD NEW ALKAPURI GOTRI SEVASI ROAD BARODA 390 021. PAN: ACBPB 2882 J 2. 3441/AHD/2016 ASSTT.YEAR 2012-13 DCIT, CENT.CIR.1, BARODA. SHRI SUMIT SURESH BHATNAGAR 6, GREEN PARK SOCIETY NIZAMPURA, BARODA 390002. PAN: ACBPB 2881 M 3. 3443/AHD/2016 ASSTT.YEAR 2012-13 DCIT, CENT.CIR.1, BARODA. SHRI RAJESH MOHANLAL NIMKAR 31, SAMPAT PARK NR. UTKARSH VIDYALAYA DIWALIPURA, BARODA 390015. PAN: AATPN 9328 B 4. 3442/AHD/2016 ASSTT.YEAR 2012-13 DCIT, CENT.CIR.1, BARODA. SMT.MADHURILATA SURESH BHATNAGAR 6, GREEN PARK SOCIETY NIZAMPURA, BARODA 390002. PAN: ACBPB 2883 K / (APPELLANT) / (RESPONDENT) REVENUE BY : SHRI V.K. SINGH, SR.DR ASSESSEE BY : SHRI M.J. SHAH, AR / DATE OF HEARING : 13/07/2018 / DATE OF PRONOUNCEMENT: 01/08/2018 ITA NO.3439 /AHD/2015 AND 3 OTHERS DCIT, BARODA VS. SMT. MONA AMIT BHATNAGAR AND OTHERS 2 / O R D E R PER RAJPAL YADAV, JUDICIAL MEMBER: ASSESSMENT ORDERS WERE PASSED ON 24.3.2014 IN ASSES SMENT YEAR 2012-13 IN THE CASES OF RESPONDENTS. THE AO HAS DE TERMINED TAXABLE INCOME OF RS.60.00 LAKHS, RS.40.00 LAKHS, RS.40.00 LAKHS AND RS.66.19 LAKHS IN THE CASES OF SMT.MONA AMIT BHATNAGAR, SHRI SUMIT SURESH BHATNAGAR, SMT.MADHURILATA SURESH BHATNAGAR AND SHR I RAJESH MOHANLAL NIMKAR RESPECTIVELY. HE IMPOSED PENALTY V IDE ORDER DATED 26.9.2014 UNDER SECTION 271AAA OF THE INCOME TAX AC T OF RS.6.00 LAKHS, RS.4.00 LAKHS, RS.4.00 LAKHS AND RS.6.61 LAK HS IN THEIR RESPECTIVE CASES, WHICH IS 10% OF THE UNDISCLOSED INCOME DETER MINED IN RESPECTIVE HANDS. 2. DISSATISFIED WITH THESE ORDERS, EACH ASSESSEE HA S FILED TWO APPEALS BEFORE THE LD.CIT(A) VIZ. IN THE CASES OF SMT.MONA AMIT BHATNAGAR, APPEAL NOS.CIT(A)-12/347/CC1/BARODA/14-15 (QUANTUM) AND APPEAL NOS.CIT(A)-12/439/CC1/BARODA/14-15 (271AA); SHRI S UMIT SURESH BHATNAGAR, APPEAL NOS.CIT(A)-12/349/CC1/BARODA/14-1 5 (QUANTUM) AND APPEAL NOS.CIT(A)-12/440/CC1/BARODA/14-15 (271AAA); SHRI RAJESH MOHANLAL NIMKAR APPEAL NOS.CIT(A)-12/351/CC1/BARODA /14-15 (QUANTUM) AND APPEAL NOS.CIT(A)-12/441/CC1/BARODA/ 14-15 (271AAA); AND IN THE CASE OF SMT.MADHURILATA SURESH BHATNAGAR, APPEAL NOS.CIT(A)-12/350/CC1/BARODA/14-15 (QUANTUM) AND APPEAL NOS.CIT(A)-12/437/CC1/BARODA/14-15 (271AAA). ITA NO.3439 /AHD/2015 AND 3 OTHERS DCIT, BARODA VS. SMT. MONA AMIT BHATNAGAR AND OTHERS 3 3. 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. IT IS A COMMON AUTHORIZATION IN EACH CASE OF THE ASSESSEES. DEPARTMENT HAS FILED APPEALS TAKING BOTH GROUNDS IN EACH APPEAL. IN OTHER WORDS, THE DEPARTMENT HAS CHALLENGED DELETION OF QUANTUM AS WELL AS DELETION OF PENALTY. FOR EXAMPLE, IN THE CASE O F SMT.MONA AMIT BHATNAGAR, ITA NO.3439/AHD/2016, ADDITION OF RS.60. 00 LAKHS WAS MADE WHICH WAS DELETED BY THE LD.CIT(A). PENALTY O F RS.6.00 LAKHS WAS IMPOSED UNDER SECTION 271AAA WHICH HAS BEEN DELETED BY THE LD.CIT(A). BOTH THESE GRIEVANCES HAVE BEEN PLEADED IN ONE APPEAL. AUTHORISATION IS ALSO COMMON. THE PROCEDURE DOES N OT AUTHORISE APPELLANT TO CHALLENGE TWO ORDERS OF CIT(A) IN ONE APPEAL. THERE ARE SEPARATE REMEDIES AVAILABLE FOR CHALLENGING ORDER O F THE LD.CIT(A). ADJUDICATING AUTHORITY DISPOSED OF NUMBER OF APPEAL S FOR THE CONVENIENCE OF THE DISPOSAL THAT DOES NOT MEAN THAT IT WOULD BECOME ONE ORDER AND COULD BE CHALLENGED IN ONE APPEAL. EXECU TABILITY OF ORDER OF THE CIT(A) IS AN INDEPENDENT QUA QUANTUM ADDITION AS WELL PENALTY. SAY, FOR EXAMPLE, IF AN ADDITION AND PENALTY BOTH W ERE CONFIRMED, THEN AO WOULD HAVE GIVEN EFFECT SEPARATE. THIS IS PROCE DURALLY WRONG AND APPEALS ARE DEFECTIVE. IT IS ALSO PERTINENT TO NOT E THAT FORM NO.35 I.E. APPEAL FORM FILED BEFORE THE CIT(A) ANNEXED WITH TH ESE APPEALS RELATES TO FORMS FILED BY THE ASSESSEES CHALLENGING PENALTY ORDERS. THUS, IN A WAY IT SUGGESTS THAT THESE APPEALS HAVE BEEN FILED QUA PENALTY ORDERS. ITA NO.3439 /AHD/2015 AND 3 OTHERS DCIT, BARODA VS. SMT. MONA AMIT BHATNAGAR AND OTHERS 4 CONSIDERING THESE ASPECTS, WE ARE OF THE VIEW THAT ONLY ONE APPEAL SHOULD BE FILED IN ACCORDANCE WITH THE PROCEDURE, A ND WE TREAT THESE APPEALS CHALLENGING DELETION OF QUANTUM ADDITION. THE SIMPLE REASON IS THAT IN THE PENALTY APPEALS, DELETION MADE BY THE C IT(A) IS LESS THAN RS.10 LAKHS. ORDERS WERE PASSED BY THE CIT(A) IN T HE APPEALS OF RESPECTIVE RESPONDENTS ON 1.9.2016. IN THE MONTH O F DECEMBER, 2015, CBDT HAS ISSUED A CIRCULAR PROHIBITING AUTHORITIES FROM CHALLENGING ORDERS OF THE CIT(A) WHERE TAX EFFECT BY VIRTUE OF RELIEF GIVEN BY THE CIT(A) IS LESS THAN RS.10 LAKHS. HAD A PROPOSAL FO R FILING APPEAL AGAINST PENALTY ORDERS BEING PUT UP SEPARATELY BEFORE THE L D.PRINCIPAL COMMISSIONER, HE WOULD HAVE NOT AUTHORIZED TO FILE APPEAL CHALLENGING THE DELETION OF PENALTY BECAUSE, RELIEF GIVEN IN TH E PENALTY PROCEEDINGS IN EACH APPEAL WAS LESS THAN RS.10 LAKHS. KEEPING IN VIEW THIS CIRCUMSTANCE, WE TREAT THESE APPEALS AS FOR CHALLEN GING DELETION OF RESPECTIVE QUANTUM ADDITIONS. WE DISPOSE OF ACCORD INGLY HEREINBELOW. 4. AS DISCUSSED ABOVE, REVENUE IS CHALLENGING DELET ION OF RESPECTIVE ADDITIONS MADE BY THE LD.CIT(A). 5. AT THE OUTSET, AFTER GOING THROUGH THE GROUNDS O F APPEALS 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 ITA NO.3439 /AHD/2015 AND 3 OTHERS DCIT, BARODA VS. SMT. MONA AMIT BHATNAGAR AND OTHERS 5 THAT THE ISSUE IS LEFT TO THE TRIBUNAL TO BE DECID ED IN ACCORDANCE WITH LAW. 6. WE FIND THAT THE APPEALS OF THE REVENUE ARE PRES ENTED ON 20.12.2016. ON 11.7.2018 THE CBDT HAS ISSUED INSTR UCTIONS BEARING NO. 3 OF 2018 UNDER FILE NO.F.NO.279/MISC.142/2007- ITJ(PT) PROHIBITING ITS SUBORDINATE AUTHORITIES FROM FILING OF APPEAL TO THE 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 INSTRUCTIONS HAVE BEEN MADE APPLICABLE WITH RETROSPECTIVE EFFECT , MEANING THEREBY, THESE INSTRUCTIONS ARE APPLICABLE ON PENDING APPEAL S ALSO. IN THE PRESENT CASE, TAX EFFECT ON THE TOTAL INCOME ASSESSED MIN US THE TAX THAT WOULD HAVE BEEN CHARGEABLE HAD SUCH TOTAL INCOME BEEN RED UCED BY THE AMOUNT OF INCOME IN RESPECT OF THE ISSUE AGAINST WHICH EAC H APPEAL IS FILED, IS LESS THAN RS.20 LAKHS. BESIDES, THE CASE OF THE REV ENUE DOES NOT FALL WITHIN THE AMBIT OF EXCEPTIONS PROVIDED IN THE CIRC ULAR. THUS, KEEPING IN VIEW THE ABOVE CBDT CIRCULAR AND PROVISIONS OF S ECTION 268A OF THE INCOME TAX ACT, WE ARE OF THE VIEW THAT THE PRESENT APPEALS OF THE REVENUE DESERVE TO BE DISMISSED. THEY ARE ACCORDING LY 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 ITA NO.3439 /AHD/2015 AND 3 OTHERS DCIT, BARODA VS. SMT. MONA AMIT BHATNAGAR AND OTHERS 6 PRESCRIBED IN THE ACT. IN VIEW OF THE ABOVE, THE A PPEALS OF THE REVENUE ARE DISMISSED DUE TO LOW TAX EFFECT. 7. IN THE RESULT, ALL THE APPEALS OF THE REVENUE AR E DISMISSED. ORDER PRONOUNCED IN THE COURT ON 1 ST AUGUST, 2018 AT AHMEDABAD. SD/- SD/- (AMARJIT SINGH) ACCOUNTANT MEMBER (RAJPAL YADAV) JUDICIAL MEMBER