DCIT, New Delhi V. Smt. Puja Gautam, New Delhi

ITA 373/DEL/2011

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 53232 (ITAT-DELHI)
• Duration Of Justice: 10 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-12-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Next Hearing Date: 08-12-2011
• Assessment Year: 2003-2004
• Appeal Filed On: 21-01-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained investment; Gift; Question of law; Block assessment; Tax effect
• Section: 260A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH F: NEW DELHI BEFORE SHRI U.B.S. BEDI, JUDICIAL MEMBER AND SHRI B.C. MEENA, ACCOUNTANT MEMBER I.T.A.NO.373/DEL/2011 ASSESSMENT YEAR : 2003-04 DCIT, VS. PUJA GAUTAM CENTRAL CIRCLE-12, BLOCK-330, B-101/102, ARA CENTRE, COSMOPOLITAN SOCIETY, JHANDEWALAN EXTN. PLOT NO. 33, SEC.-10, NEW DELHI. DWARKA, NEW DELHI. AGHPG6649L (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI SUDESH GARG, CIT DR RESPONDENT BY : SHRI ROHIT GARG, AR ORDER ORDER ORDER ORDER PER U.B.S. BEDI, J.M. PER U.B.S. BEDI, J.M. PER U.B.S. BEDI, J.M. PER U.B.S. BEDI, J.M. THIS APPEAL OF THE REVENUE IS FILED AGAINST THE ORDER OF LD. CIT(A), NEW DELHI DATED 14.10.2010 RELEVANT TO ASSTT. YAER 2003-04 BY RAISING FOLLOWING TWO EFFECTIVE GROUNDS :- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE TH E LD. CIT(A) HAS ERRED IN LAW AND FACTS IN DELETING THE ADD ITION OF `. 9,10,000/- MADE BY THE ASSESSING OFFICER ON ACCOU NT OF UNEXPLAINED INVESTMENT IN PURCHASE OF PROPERTIES. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN LAW AND FACTS IN DELETING THE ADD ITION OF `. 5,000/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF DEEMED RENT FOR THE PROPERTY. ITA NO. 373/DEL/11 ASSTT. YEAR 2003-04 2 2. THE TAX EFFECT IN THIS CASE IS FOUND TO BE LESS THAN `.3 LAC, THE LIMIT PRESCRIBED UNDER INSTRUCTION NO. 3/2011 DATED 0 9.02.2011 AND WHEN LD. DR WAS APPRISED OF THIS FACT, HE COULD NOT CO NTROVERT THE SAME AND HE WAS ALSO UNABLE TO SHOW THAT THE CASE OF THE DEPARTMENT FALLS IN ANY OF THE EXCEPTIONS CARVED OUT IN THE SAID INSTRUCTIONS AND LD. COUNSEL FOR THE ASSESSEE MS. SHIKHA SH ARMA, CHARTERED ACCOUNTANT PLEADED FOR DISMISSAL OF THE APPE AL ON LOW TAX EFFECT AS SAME IS LESS THAN THE LIMIT PRESCRIBED. 3. WE HAVE HEARD BOTH THE SIDES AND CONSIDERED THE MAT ERIAL ON RECORD AND FIND THAT THE TAX EFFECT IN THIS CASE IS UN DISPUTEDLY LESS THAN THE LIMIT PRESCRIBED BY INSTRUCTION NO. 3/2011 A ND DEPARTMENT HAS NOT BEEN ABLE TO PLACE MATERIAL TO SHOW THAT ITS C ASE FALLS IN THE EXCEPTIONS PROVIDED IN THE SAID INSTRUCTIONS OF CBDT AN D ISSUE IS ALSO FOUND TO BE COVERED BY VARIOUS ITA DECISIONS INCLUDING THAT OF ITAT DELHI BENCH IN CASE OF SHRI VIKRAM BHATNAGAR ITA NO. 60/D/2002, ORDER DATED 10.3.2006. 4. 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 CONTEND THAT SO FAR AS NEW CASES ARE CONCERNED, THE CIRCULAR ISSUED BY THE BOARD IS BINDING ON THEM AND IN COMPLIANCE WITH THE SAID INSTRUCTIONS, THEY DO NOT FILE REFERENCES IF THE TAX EFFECT IS LESS THAN `. 2 ITA NO. 373/DEL/11 ASSTT. YEAR 2003-04 3 LAKHS. BUT THE SAME APPROACH IS NOT ADOPTED WITH RESPECT TO THE OLD REFERRED CASES EVEN IF THE TAX EFFECT IS LESS THAN `. 2 LAKH. IN OUR VIEW, THERE IS NO LOGIC BEHIND THIS APPROACH. THIS COURT CAN VERY WELL TAKE JUDICIAL NOTICE OF THE 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 DEPARTMENT ALSO INCREASED TO A TREMENDOUS EXTENT. THE CORRIDORS OF THE SUPERIOR COURTS 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 `. 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 WHICH ARE STILL UNDECIDED. THE DEPARTMENT IS NOT JUSTIFIED IN PROCEEDING WITH THE OLD REFERENCES WHEREIN THE TAX IMPACT IS MINIMAL. THUS, THERE IS NO JUSTIFICATION TO PROCEED WITH DECADES OLD REFERENCES HAVING NEGLIGIBLE TAX EFFECT. ITA NO. 373/DEL/11 ASSTT. YEAR 2003-04 4 5. IT IS ALSO SEEN THAT RECENTLY THE HONBLE JURISDICTI ONAL HIGH COURT VIDE THEIR ORDER DATED 1.8.2007 IN ITA NO. 683/2007 IN THE CASE OF CIT V. MANISH BHAMBRI HAS UPHELD THE ORDER OF TRIBUNAL VI DE WHICH THE APPEAL FILED BY THE REVENUE WAS REFUSED TO BE ENTERTA INED BECAUSE OF LOW TAX EFFECT. THE SAID ORDER OF HONBLE JURISDICTI ONAL HIGH COURT IS REPRODUCED BELOW FOR THE SAKE OF CONVENIENCE :- THE REVENUE IS AGGRIEVED BY AN ORDER DATED 8 TH AUGUST, 2006 PASSED BY THE INCOME TAX APPELLATE TRIBUNAL, DE LHI BENCH D IN IT(SS) NO. 513/DEL/2003 RELEVANT FOR T HE BLOCK PERIOD 1 ST APRIL, 1990 TO 14 TH FEBRUARY, 2001. THE QUESTION THAT AROSE BEFORE THE ASSESSING OFFICER WAS WITH REGARD TO CERTAIN DEPOSITS IN THE BANK ACCOUNT O F THE ASSESSEE 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 EXPLANATION 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 `. 30,000/- FOR THE ASSESSMENT YEAR 1999-2000, AND `. 83,000/- FOR THE ASSESSMENT YEAR 2001-2002. IT MAY ALSO BE MENTIONED THAT FOR THE ASSESSMENT YEAR 1999-2000, ITA NO. 373/DEL/11 ASSTT. YEAR 2003-04 5 THE ASSESSING OFFICER HAS ALREADY ACCEPTED THE EXPLANATION WITH REGARD TO A GIFT OF `. 60,000/- AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS),-AN APPEAL WAS FILED BEFORE THE INCOME TAX APPELLATE TRIBUNAL. THE TRIBUNAL FOUND THAT IN VIEW OF INSTRUCTIONS ISSUED BY THE CBDT WHERE THE TAX EFFECT IS LESS THAN ` 1 LAKH. THE DEPARTMENT SHOULD NOT FILE A N APPEAL BEFORE THE TRIBUNAL. IN THE PRESENT CASE THE TAX EFFECT IS LESS THAN `. 1 LAKH. UNDER THE CIRCUMSTANCES, THE TRIBUNAL DID NOT ENTERTAIN THE APPEAL. THE REVENUE, FEELING AGGRIEVED BY THE DECISION OF TH E TRIBUNAL, HAS COME UP BEFORE US UNDER SECTION 260A OF THE INCOME TAX ACT, 1961. IT IS CONTENDED BY LEARNE D COUNSEL FOR THE REVENUE THAT THE TRIBUNAL IS A FACT F INDING AUTHORITY AND SHOULD HAVE ADJUDICATED THE MATTER 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, CONSIDERING THAT THE CA SE IS ONE OF A BLOCK ASSESSMENT. THERE IS NO JUSTIFICATION FOR THE INCOME TAX DEPARTMENT TO GO ON BURDENING THE TRIBUN AL, THE COURT WITH EVERY CASE RIGHT UP TO THE END. APAR T FROM BURDENING THE TRIBUNAL AND COURTS, IT ALSO CAUSES AVOIDABLE EXPENSES TO THE ASSESSEE. IT IS COMMON ITA NO. 373/DEL/11 ASSTT. YEAR 2003-04 6 KNOWLEDGE THAT THE ASSESSEE HAS TO PAY FOR LEGAL FEES AND MERELY BECAUSE THE INCOME TAX DEPARTMENT HAS GOT UNLIMITED RESOURCES, THERE IS NO JUSTIFICATION THAT EVE RY CASE SHOULD BE DRAGGED ON. UNDER THE CIRCUMSTANCES, WE ARE OF THE VIEW THAT THE TRIBUNAL WAS JUSTIFIED IN REFUSING TO ENTERTAIN THE AP PEAL BECAUSE OF THE INSIGNIFICANT AMOUNT INVOLVED IN THE MATTER. NO SUBSTANTIAL QUESTION OF LAW ARISES. WE, THEREFORE, DISMISS THIS APPEAL. 6. SINCE, TAX EFFECT IS LESS THAN THE LIMIT PRESCRIBED, 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 N OT MAINTAINABLE, AS SUCH, IS DISMISSED. 7. IN THE RESULT, THE APPEAL IS DISMISSED. ORDER PRONOUNCED SOON AFTER THE CONCLUSION OF HEARIN G ON 8.12.2011. SD/- SD/- (B.C. MEENA) ACCOUNTANT MEMBER (U.B.S. BEDI ) JUDICIAL MEMBER DATED : 8.12.2011 VEENA COPY OF THE ORDER FORWARDED TO:- 1. APPELLANT 2. RESPONDENT ITA NO. 373/DEL/11 ASSTT. YEAR 2003-04 7 3. CIT 4. CIT(A) 5. DR BY ORDER DEPUTY REGISTRAR, ITAT