The DCIT, Central Circle-1(1), Ahmedabad V. Bodal Chemicals Ltd., Ahmedabad

ITA 376/AHD/2019

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 6379 (ITAT-AHMEDABAD)
• Duration Of Justice: 7 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-10-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 26-07-2019
• Assessment Year: 2003-2004
• Appeal Filed On: 07-03-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K DEV
• Assessee Lawyers: S N DIVATIA
• Keywords: Tax effect; Set aside
• Section: 143(3); 201; 254(2); 147

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL, A BENCH, AHMEDABAD BEFORE SHRI WASEEM AHMED, ACCOUNTANT MEMBER AND MS MADHUMITA ROY , JUDICIAL MEMBER IT A NO S .376 - 377 / AHD / 2019 / ASSTT. YEAR: 2003 - 2004 D.C.I.T , CENTRAL CIRCLE - 1(1 ) , AHMEDABAD. VS BODAL CHEMICALS LTD., , PLOT NO.125 - 124 , PHASE - 1, G.I.D.C. , VATVA, AHMEDABAD . PAN: AAACD5352M (APPLICANT) ( RESPON D ENT ) REVENUE BY : SHRI S.K. DEV , SR. D.R ASSESSEE BY : SHRI S.N. DIVATIA , A.R / DATE OF HEARING : 26 / 07 /201 9 / DATE OF PRONOUNCEMENT: 16 / 10 /201 9 / O R D E R PER BENCH : THE CAPTIONED APPEAL S HAVE BEEN FILED AT THE INSTANCE OF THE REVENUE AGAINST THE SEPARATE ORDER S OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) - 11 , AHMEDABAD [ LD. CIT (A) IN SHORT] , OF EVEN DATED 26 / 12 / 2018 & ARISING IN THE MATTER OF ASSESSMENT ORDER PASSED UNDER S. 147 R.W.S 143(3) OF THE INCOME TAX ACT, 1961 ( HERE - IN - AFTER REFERRED TO AS 'THE ACT') DATED 29 / 10/2007 RELEVANT TO ASSESSMENT YEAR (AY) 2003 - 04 . THE REVENUE IN ITA NO. 376/AHD/2019 HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: IT A NO .376 - 377 /AHD/2019 A.Y .2003 - 04 2 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING TH E PENALTY U/S.271(1)(C) OF THE ACT OF RS.2,U/S.271(1)(C) OF THE ACT,220/ - 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.CIT(A) OUGHT TO HAVE UPHELD THE ORDER OF THE A.O. 3. IT IS, THEREFORE, PRAYED THAT THE ORDER OF THE LD.CIT(A) BE SET ASIDE AND THAT OF THE A.O. BE RESTORED TO THE ABOVE EXTENT. THE REVENUE IN ITA NO. 377 /AHD/2019 HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.CIT( A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.9,87,791/ - ON ACCOUNT OF PROVISION OF GRATUITY. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.3,34,8 57/ - ON ACCOUNT OF DEDUCTRION U/S.80HHC. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF TH CASE AND IN LAW, THE LD.CIT(A) OUGHT TYO HAVE UPHELD THE ORDER OF THE A.O. 4. IT IS, THEREFORE, PRAYED THAT THE ORDER OF THE LD.CIT(A) BE SET ASIDE AND THAT OF THE A.O. BE RESTORED TO THE ABOVE EXTENT. 2. AT THE TIME OF DICTATION IT WAS NOTICED THAT THE TAX EFFECT IN THE IMPUGNED APPEALS (BOTH) FILED BY THE REVENUE IS LESS THAN 50 LAKHS. THEREFORE, THE SAME IS NOT MAINTAINABLE IN VIEW OF THE RECENT CIRCULAR ISSUED BY THE C BDT BEARING NO. 17/2019 DATED 8 TH AUGUST 2019. HOWEVER, WE NOTE THAT THE IMPUGNED APPEAL WAS HEARD DATED 30 JULY 2019 BEFORE THE ISSUANCE OF SUCH CIRCULAR BY THE CBDT. BUT THE ORDER AFTER HEARING THE APPEAL WAS RESERVED FOR THE PRONOUNCEMENT. AS THE ORDER WAS NOT PRONOUNCED TILL 8 TH AUGUST 2019 WHEN CBDT WITHDREW ITS APPEALS PENDING BEFORE THE ITAT INVOLVING TAX EFFECT LESS THAN 50 LAKHS, THEREFORE, WE ARE OF THE VIEW THAT THE IMPUGNED CBDT CIRCULAR IS ALSO APPLICABLE IN SUCH CASES I.E. THE HEARING WAS IT A NO .376 - 377 /AHD/2019 A.Y .2003 - 04 3 CON CLUDED BUT THE ORDERS WERE RESERVED FOR PRONOUNCEMENTS TILL THE DATE OF THE ANNOUNCEMENT OF SUCH CIRCULAR. 2.1 THE RELEVANT EXTRACT OF THE CIRCULAR ISSUED DATED 8 AUGUST 2019 READS AS UNDER: 2. AS A STEP TOWARDS FURTHER MANAGEMENT OF LITIGATION. IT H AS BEEN DECIDED BY THE BOARD THAT MONETARY LIMITS FOR FILING OF APPEALS IN INCOME - TAX CASES BE ENHANCED FURTHER THROUGH AMENDMENT IN PARA 3 OF THE CIRCULAR MENTIONED ABOVE AND ACCORDINGLY. THE TABLE FOR MONETARY LIMITS SPECIFIED IN PARA 3 OF THE CIRCULAR S HALL READ AS FOLLOWS: S.NO. APPEALS/SLPS IN INCOME - TAX MATTERS MONETARY LIMIT (RS.) 1 BEFORE APPELLATE TRIBUNAL 50,00,000 2 BEFORE HIGH COURT 1,00,00,000 3 BEFORE SUPREME COURT 2,00,00,000 FROM THE ABOVE, IT IS CLEAR THAT THE IMPUGNED APPEALS FILED BY THE REVENUE ARE NOT MAINTAINABLE AS THE TAX EFFECT/ PENALTY AMOUNT IS LESS THAN 50 LAKHS. THIS FACT CAN ALSO BE VERIFIED FROM THE GROUNDS OF APPEAL FILED BY THE ASSESSEE AS MENTIONED ABOVE. 3. BEFORE PARTING, WE ALSO NOTE THAT THERE ARE CERTAIN EXCEPTIONS SPECIFIED IN THE CBDT CIRCULAR BEARING NO. 17 OF 2019 DATED 8 AUGUST 2019 READ WITH CIRCULAR NO. 3 OF 2018 DATED 11 TH JULY 2018 WHERE THE TAX LIMIT/ PENALTY AMOUNT OF RS. 50 LACS WILL NOT B E APPLIED. AS SUCH, IN THOSE CASES THE APPEAL OF THE REVENUE WILL STAND AND THE SAME WILL NOT BE HIT BY THE IMPUGNED CIRCULAR DESPITE THE TAX EFFECT IS LESS THAN 50 LAKHS. THEREFORE, WE WANT TO MAKE IT CLEAR THAT IF THE R EVENUE ON THE VERIFICATION FINDS T HAT THE IMPUGNED CASE OF THE ASSESSEE FALLS IN THE EXCEPTION AS PROVIDED IN THE CIRCULAR OR TAX EFFECT EXCEEDS, THEN IT WILL BE AT ITS LIBERTY TO MOVE AN APPLICATION FOR THE RECALLING OF THIS ORDER OF THE TRIBUNAL WITHIN THE PRESCRIBED TIME UNDER THE PROVI SIONS OF SECTION 254(2) OF THE ACT. IN VIEW OF THE ABOVE, WE DISMISS THE APPEALS FILED BY THE REVENUE AS NOT MAINTAINABLE. IT A NO .376 - 377 /AHD/2019 A.Y .2003 - 04 4 4. IN THE RESULT, BOTH THE APPEALS FILED BY THE REVENUE ARE DISMISSED. ORDER PRONOUNCED IN THE COURT ON 16 / 10 / 201 9 AT AHMEDABAD. - SD - ----- - - SD - SD - ( MS MADHUMITA ROY ) JUDICIAL MEMBER - SD - ( WASEEM AHMED ) ACCOUNTANT MEMBER ( (TRUE COPY) AHMEDABAD; DATED 16 / 10 / 201 9 MANISH / COPY OF THE ORDER FORWARDED TO : / BY ORDER, / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / CONCERNED CIT 4. ( ) / THE CIT(A), AHMEDABAD 5. , , / DR, ITAT, AHMEDABAD 6. / GUARD FILE .