The ITO, TDS-3, JAMNAGAR V. M/s Ambika Overseas, JAMNAGAR

ITA 378/RJT/2015

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 0453 (ITAT-RAJKOT)
• Duration Of Justice: 3 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-12-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 27-08-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Tax effect

Judgement Text

ITA NO. 378,379, 380 AND 381 /RJT/2015 A SSESSMENT YEAR: 201 1 - 12, 2012 - 13 , 2013 - 14 AND 2014 - 15 PAGE 1 OF 6 IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH SMC , RAJKOT (CONDUCTED THROUGH E - COURT AT AHMEDABAD) [CORAM: PRAMOD KUMAR AM ] ITA NO. 378, 379 , 380 AND 381 /RJT/2015 ASST. YEAR S 201 1 - 12, 2012 - 13 , 2013 - 14 AND 2014 - 15 INCOME - TAX OFFICER, TDS - 3 JAMNAG AR. ....... ... .. . ..... APP ELLANT VS. M/S AMBICA OVERSEAS, PROP. SHRI RAMSWARUP RAMCHANDRA BALDI SPECIAL SHED NO.440, GIDC SHANKER TEKRI, JAMNAGAR ....... ..................RESPONDENT TA N RKTR02458B APPEARANCES BY: C. S. ANJARIA .................... FOR THE A PPLICAN T NONE ................. FOR THE RESPONDENT DATE OF CONCLUDING THE HEARING : DECEMBER 01 , 201 5 DATE OF PRONOUNCING THE ORDER : DECEMBER 22 , 2015 O R D E R 1. BY WAY OF THESE APPEALS , THE ASSESSING OFFICER HAS CHALLENGED CORRECTNESS OF THREE DIFFERENT ORDERS ALL DATED 25 TH JUNE 2015, PASSED BY THE CIT(A) FOR THE ASSESSMENT YEARS 2011 - 12, 2012 - 13 AND 2013 - 14 . THE SHORT MATERIALLY SIMILAR GROUNDS RAISED IN THESE APPEALS ARE THAT THE CIT(A) ERRED IN DELETING THE DEMAND OF RS 4,41,914 UNDER SECTION 206C FOR THE ASSESSMENT YEAR 2011 - 12, IN DELETING THE DEMAND OF RS 7,66,365 UNDER SECTION 206C FOR THE ASSESSMENT YEAR 2012 - 13, IN DELETING THE DEMAND OF R S 12,66,421 UNDER SECTION 206C FOR THE ASSESSMENT YEAR 2013 - 14 AND IN DELETING THE DEMAND OF RS 6,81,966 UNDER SECTION 206C FOR THE ASSESSMENT YEAR 2013 - 14 . THE TAX EFFECT OF THESE DEPARTMENTAL APPEALS FOR THE FIRST TWO YEARS AND THE LAST YEAR IS THUS WELL BELOW ITA NO. 378,379, 380 AND 381 /RJT/2015 A SSESSMENT YEAR: 201 1 - 12, 2012 - 13 , 2013 - 14 AND 2014 - 15 PAGE 2 OF 6 RS 10 LAKHS IN EACH OF THE YEARS AND THE CIT(A) S ORDER IS NOT A COMPOSITE ORDER. WE WILL DEAL WITH THE FIRST TWO YEARS FIRST. 2. IT IS IN THIS LIGHT THAT I NEED TO TAKE NOTE OF A RECENT DEVELOPMENT WITH RESPECT TO CBDT INSTRUCTIONS ON THE PEN DING DEPARTMENTAL APPEALS BEFORE THE ITAT IN WHICH TAX EFFECT IS LESS THAN RS 10 LAKHS. T HE CENTRAL BOARD OF DIRECT TAXE HAS, VIDE CIRCULAR NO. 21/ 2015 DATED 10 TH DECEMBER 2015, INTER ALIA, ANNOUNCED THAT, SUBJECT TO CERTAIN EXCEPTIONS - WHICH ARE NOT REL EVANT IN THE PRESENT CONTEXT, HENCEFORTH, NO DEPARTMENTAL APPEALS WILL BE FILED AGAINST RELIEF GIVEN BY THE CIT(A), BEFORE THIS TRIBUNAL, UNLESS THE TAX EFFECT, EXCLUDING INTEREST, EXCEEDS RS 10,00,000. WHAT IS EVEN MORE IMPORTANT IS THAT NOT ONLY THAT SU CH A TAXPAYER FRIENDLY MEASURE WILL BE IMPLEMENTED IN ALL FUTURE TAX LITIGATION, EVEN THE PENDING APPEALS, WHEREVER THE TAX INVOLVED IN THE APPEALS DOES NOT EXCEED RS 10,00,000, SHALL NOT BE PRESSED OR WITHDRAWN. IN EFFECT THUS, IRRESPECTIVE OF THE YEAR T O WHICH THE DEPARTMENTAL APPEAL BEFORE THE TRIBUNAL PERTAINS, AS LONG AS SUCH AN APPEAL IS PENDING BEFORE THE TRIBUNAL, THIS WILL BE A LEGAL NULLITY. THE RELEVANT EXTRACTS OF THE AFORESAID CIRCULAR ARE AS FOLLOWS: 3. HENCEFORTH, APPEALS/ SLPS SHALL NOT BE FILED IN CASES WHERE THE TAX EFFECT DOES NOT EXCEED THE MONETARY LIMITS GIVEN HEREUNDER: S NO APPEALS IN INCOME - TAX MATTERS MONETARY LIMIT (IN RS) 1. BEFORE APPELLATE TRIBUNAL 10,00,000/ - 2. BEFORE HIGH COURT 20,00,000/ - 3. BEFORE SUPREM E COURT 25,00,000/ - IT IS CLARIFIED THAT AN APPEAL SHOULD NOT BE FILED MERELY BECAUSE THE TAX EFFECT IN A CASE EXCEEDS THE MONETARY LIMITS PRESCRIBED ABOVE. FILING OF APPEAL IN SUCH CASES IS TO BE DECIDED ON MERITS OF THE CASE. 4. FOR THIS PURPOSE, TAX EFFECT MEANS THE DIFFERENCE BETWEEN THE TAX ON THE TOTAL INCOME ASSESSED AND THE TAX THAT WOULD HAVE BEEN CHARGEABLE HAD SUCH TOTAL INCOME BEEN REDUCED BY THE AMOUNT OF INCOME IN RESPECT OF THE ISSUES AGAINST WHICH APPEAL IS INTENDED TO BE FILED (HEREINAF TER REFERRED TO AS DISPUTED ISSUES ). HOWEVER THE TAX WILL NOT INCLUDE ANY INTEREST THEREON, EXCEPT WHERE CHARGEABILITY OF INTEREST ITSELF IS IN DISPUTE. IN CASE THE CHARGEABILITY OF INTEREST IS THE ISSUE UNDER DISPUTE, THE AMOUNT OF INTEREST SHALL BE THE TAX EFFECT. IN CASES WHERE RETURNED LOSS IS REDUCED OR ASSESSED AS INCOME, THE TAX EFFECT WOULD INCLUDE NOTIONAL TAX ON DISPUTED ADDITIONS. IN ITA NO. 378,379, 380 AND 381 /RJT/2015 A SSESSMENT YEAR: 201 1 - 12, 2012 - 13 , 2013 - 14 AND 2014 - 15 PAGE 3 OF 6 CASE OF PENALTY ORDERS, THE TAX EFFECT WILL MEAN QUANTUM OF PENALTY DELETED OR REDUCED IN THE ORDER TO BE APPEAL ED AGAINST. 5. THE ASSESSING OFFICER SHALL CALCULATE THE TAX EFFECT SEPARATELY FOR EVERY ASSESSMENT YEAR IN RESPECT OF THE DISPUTED ISSUES IN THE CASE OF EVERY ASSESSEE. LF, IN THE CASE OF AN ASSESSEE, THE DISPUTED ISSUES ARISE IN MORE THAN ONE ASSESSMENT YEAR, APPEAL, CAN BE FILED IN RESPECT OF SUCH ASSESSMENT YEAR OR YEARS IN WHICH THE TAX EFFECT IN RESPECT OF THE DISPUTED ISSUES EXCEEDS THE MONETARY LIMIT SPECIFIED IN PARA 3. NO APPEAL SHALL BE FILED IN RESPECT OF AN ASSESSMENT YEAR OR YEARS IN WHICH THE TAX EFFECT IS LESS THAN THE MONETARY LIMIT SPECIFIED IN PARA 3. IN OTHER WORDS, HENCEFORTH, APPEALS CAN BE FILED ONLY WITH REFERENCE TO THE TAX EFFECT IN THE RELEVANT ASSESSMENT YEAR. HOWEVER, IN CASE OF A COMPOSITE ORDER OF ANY HIGH COURT OR APPELLATE AU THORITY, WHICH INVOLVES MORE THAN ONE ASSESSMENT YEAR AND COMMON ISSUES IN MORE THAN ONE ASSESSMENT YEAR, APPEAL SHALL BE FILED IN RESPECT OF ALL SUCH ASSESSMENT YEARS EVEN IF THE TAX EFFECT IS LESS THAN THE PRESCRIBED MONETARY LIMITS IN ANY OF THE YEAR( S), IF IT IS DECIDED TO FILE APPEAL IN RESPECT OF THE YEAR(S) IN WHICH TAX EFFECT EXCEEDS THE MONETARY LIMIT PRESCRIBED. IN CASE WHERE A COMPOSITE ORDER/ JUDGEMENT INVOLVES MORE THAN ONE ASSESSEE, EACH ASSESSEE SHALL BE DEALT WITH SEPARATELY. 3. SO FAR AS RETROSPECTIVE OPERATION OF THIS MEASURE IS CONCERNED, THE RELEVANT PORTION OF THE CBDT CIRCULAR IS AS FOLLOWS: 10. THIS INSTRUCTION WILL APPLY RETROSPECTIVELY TO PENDING APPEALS AND APPEALS TO BE FILED HENCEFORTH IN HIGH COURTS/ TRIBUNALS. PENDING APPE ALS BELOW THE SPECIFIED TAX LIMITS IN PARA 3 ABOVE MAY BE WITHDRAWN/ NOT PRESSED........ 4. HAVING NOTED THAT THE ABOVE, IT IS ALSO IMPORTANT TO NOTE SUCH A DISMISSAL OF APPEAL SHALL NOT ACT TO THE PREJUDICE OF THE REVENUE AUTHORITIES TO RAISE THE SAME IS SUE, IN THE CASE OF THE RELEVANT ASSESSEE OR ANY OTHER ASSESSEE, AS AND WHEN THE TAX EFFECT INVOLVED IN SUCH LITIGATION CROSSES THE THRESHOLD LIMIT FOR THAT ASSESSMENT YEAR. THE RELEVANT PARAGRAPHS OF THE CBDT CIRCULAR, FOR READY REFERENCE, ARE AS FOLLOWS: 6. IN A CASE WHERE APPEAL BEFORE A TRIBUNAL OR A COURT IS NOT FILED ONLY ON ACCOUNT OF THE TAX EFFECT BEING LESS THAN THE MONETARY LIMIT SPECIFIED ABOVE, THE COMMISSIONER OF INCOME - TAX SHALL SPECIFICALLY RECORD THAT EVEN THOUGH THE DECISION IS NOT ACCEPT ABLE, APPEAL IS NOT BEING FILED ONLY ON THE CONSIDERATION THAT THE TAX EFFECT IS LESS THAN THE MONETARY LIMIT SPECIFIED IN THIS INSTRUCTION . FURTHER, IN SUCH CASES, THERE WILL BE NO PRESUMPTION THAT THE INCOME - TAX DEPARTMENT HAS ACQUIESCED IN THE DECISION ON THE DISPUTED ISSUES. THE INCOME - TAX DEPARTMENT SHALL ITA NO. 378,379, 380 AND 381 /RJT/2015 A SSESSMENT YEAR: 201 1 - 12, 2012 - 13 , 2013 - 14 AND 2014 - 15 PAGE 4 OF 6 NOT BE PRECLUDED FROM FILING AN APPEAL AGAINST THE DISPUTED ISSUES IN THE CASE OF THE SAME ASSESSEE FOR ANY OTHER ASSESSMENT YEAR, OR IN THE CASE OF ANY OTHER ASSESSEE FOR THE SAME OR ANY OTHER ASSES SMENT YEAR, IF THE TAX EFFECT EXCEEDS THE SPECIFIED MONETARY LIMITS. 7. IN THE PAST, A NUMBER OF INSTANCES HAVE COME TO THE NOTICE OF THE BOARD, WHEREBY AN ASSESSEE HAS CLAIMED RELIEF FROM THE TRIBUNAL OR THE COURT ONLY ON THE GROUND THAT THE DEPARTMENT HA S IMPLICITLY ACCEPTED THE DECISION OF THE TRIBUNAL OR COURT IN THE CASE OF THE ASSESSEE FOR ANY OTHER ASSESSMENT YEAR OR IN THE CASE OF ANY OTHER ASSESSEE FOR THE SAME OR ANY OTHER ASSESSMENT YEAR, BY NOT FILING AN APPEAL ON THE SAME DISPUTED ISSUES. THE D EPARTMENTAL REPRESENTATIVES/COUNSELS MUST MAKE EVERY EFFORT TO BRING TO THE NOTICE OF THE TRIBUNAL OR THE COURT THAT THE APPEAL IN SUCH CASES WAS NOT FILED OR NOT ADMITTED ONLY FOR THE REASON OF THE TAX EFFECT BEING LESS THAN THE SPECIFIED MONETARY LIMIT A ND, THEREFORE, NO INFERENCE SHOULD BE DRAWN THAT THE DECISIONS RENDERED THEREIN WERE ACCEPTABLE TO THE DEPARTMENT. ACCORDINGLY, THEY SHOULD IMPRESS UPON THE TRIBUNAL OR THE COURT THAT SUCH CASES DO NOT HAVE ANY PRECEDENT VALUE. AS THE EVIDENCE OF NOT FILIN G APPEAL DUE TO THIS INSTRUCTION MAY HAVE TO BE PRODUCED IN COURTS, THE JUDICIAL FOLDERS IN THE OFFICE OF CSIT MUST BE MAINTAINED IN A SYSTEMIC MANNER FOR EASY RETRIEVAL 5. I MAY FURTHER NOTE THAT THE EXCEPTIONS TO THE CASES COVERED BY THE AFORESAID CIRCU LAR ARE SET OUT IN PARAGRAPH 8 OF THE CIRCULAR AS FOLLOWS; 8. ADVERSE JUDGMENTS RELATING TO THE FOLLOWING ISSUES SHOULD BE CONTESTED ON MERITS NOTWITHSTANDING THAT THE TAX EFFECT ENTAILED IS LESS THAN THE MONETARY LIMITS SPECIFIED IN PARA 3 ABOVE OR THER E IS NO TAX EFFECT: (A) WHERE THE CONSTITUTIONAL VALIDITY OF THE PROVISIONS OF AN ACT OR RULE ARE UNDER CHALLENGE, OR (B) WHERE BOARD S ORDER, NOTIFICATION, INSTRUCTION OR CIRCULAR HAS BEEN HELD TO BE ILLEGAL OR ULTRA VIRES, OR (C) WHERE REVENUE AUDIT O BJECTION IN THE CASE HAS BEEN ACCEPTED BY THE DEPARTMENT, OR (D) WHERE THE ADDITION RELATES TO UNDISCLOSED FOREIGN ASSETS/ BANK ACCOUNTS. ITA NO. 378,379, 380 AND 381 /RJT/2015 A SSESSMENT YEAR: 201 1 - 12, 2012 - 13 , 2013 - 14 AND 2014 - 15 PAGE 5 OF 6 6. IN VIEW OF THE ABOVE CBDT CIRCULAR, WHICH IS BINDING ON ALL THE FIELD OFFICERS INCLUDING THE APPELLANT BEFOR E ME , THE APPEAL S BEFORE ME FOR THE FIRST TWO YEARS AND THE LAST YEAR I.E. 2011 - 12, 2012 - 1 3 AND 2014 - 15 ARE LIABLE TO BE DISMISSED AS WITHDRAWN. 7. THIS DISMISSAL IS, HOWEVER, SUBJECT TO THE CONDITION THAT IN THE EVENT OF THE APPELLANT BEING ABLE TO SHO W US THAT THE APPEAL BEFORE US IS NOT COVERED BY THE AFORESAID CIRCULAR, OR IS COVERED BY THE EXCEPTIONS SET OUT IN THE SAID CIRCULAR, THE APPELLANT WILL HAVE THE LIBERTY TO MOVE AN APPROPRIATE PETITION TO THIS TRIBUNAL FOR RECALLING THIS ORDER. 8. AS THE APPEALS ARE DISMISSED AS WITHDRAWN, FOR THE REASONS SET OUT ABOVE, I SEE NO REASONS TO DEAL WITH THE LEGAL CONTENTIONS CANVASSED BEFORE ME. THAT ASPECT OF THE MATTER, GIVEN MY ABOVE DECISION, IS PURELY ACADEMIC. 9. IN THE RESULT, THE APPEALS FOR THE A SSESSMENT YEARS 20 11 - 12, 2012 - 13 AND 2014 - 15 ARE DISMISSED AS WITHDRAWN . 10. AS FOR THE APPEAL FOR THE ASSESSMENT YEAR 2013 - 14, I HAVE NOTED THAT THE CIT(A) HAS SENT THE MATTER BACK TO THE FILE OF THE ASSESSING OFFICER FOR CERTAIN LIMITED VERIFICATION A ND HAS NOT DECIDED ON MERITS. YET, THE GRIEVANCES RAISED BY THE ASSESSING OFFICER HAS RAISED A GRIEVANCE ON MERITS. IN ANY EVENT, THE ASSESSING OFFICER S GRIEVANCE IS AGAINST THE INTEREST BEING LEVIED TILL THE TIME OF FILING OF RETURN OF INCOME BY THE RECI PIENT BUT THEN AS LONG AS THE RECEIPTS ARE INCLUDED IN THE RECEIPTS DISCLOSED TO THE DEPARTMENT AND THE TAXES HAVE BEEN PAID IN RESPECT OF THE SAME, AS AT THE TIME OF FILING OF APPEAL, THE SETTLED LEGAL POSITION IS THAT INTEREST LEVY MUST STOP. THAT IS WH AT A COORDINATE BENCH OF THIS TRIBUNAL HAS HELD IN THE CASE OF KPG ENTERPRISES VS ITO (ITA NO. 2384/AHD/2012; ORDER DATED 14.8.2014). I SEE NO REASONS TO TAKE ANY OTHER VIEW OF THE MATTER THAN THE VIEW SO TAKEN BY THE DB. RESPECTFULLY FOLLOWING THE SAME, I CONFIRM THE ORDER OF THE CIT(A) AND DECLINE TO INTERFERE IN THE MATTER. NO OTHER ISSUES ARE RAISED BY THE APPELLANT. ITA NO. 378,379, 380 AND 381 /RJT/2015 A SSESSMENT YEAR: 201 1 - 12, 2012 - 13 , 2013 - 14 AND 2014 - 15 PAGE 6 OF 6 11. IN THE RESULT, THE APPEAL FOR THE ASSESSMENT YEAR 2013 - 14 IS ALSO DISMISSED. ALL THE FOUR APPEALS ARE THUS DISMISSED. PRONOUNCED IN T HE OPEN COURT TODAY ON THE 22 ND DECEMBER, 2015. SD/ - PRAMOD KUMAR (ACCOUNTANT MEMBER) AHMEDABAD, THE 22 ND DAY OF DECEMBER, 2015 COPIES TO: (1) THE APPELLANT (2) THE RESPONDENT (3) COMMISSIONER (4) CIT(A) (5) DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER A SSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH, RAJKOT