ACIT, New Delhi V. Sh. Rakesh Yadav, New Delhi

ITA 3906/DEL/2010

• Counselvise Citation: 390620114 RSA 2010
• Duration Of Justice: 1 year(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-09-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Next Hearing Date: 12-09-2011
• Assessment Year: 2004-2005
• Appeal Filed On: 19-08-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRATIMA KAUSHIK
• Assessee Lawyers: H R AGARWALA
• Keywords: Tax effect
• Section: 260A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH `F: NEW DELHI BEFORE SHRI C.L.SETHI, JUDICIAL MEMBER AND SHRI B.C. MEENA, ACCOUNTANT MEMBER I.T. A. NO.3906/DEL/2010 ASSESSMENT YEAR : 2004-05 ASSTT. COMMISSIONER OF INCOME-TAX, SHRI RAKESH YAD AV, CIRCLE 38(1), NEW DELHI. VS. 62/5-B, BER SARAI OP P. JNU CAMPUS, NEW DELHI. PAN: AARPY8814D (APPELLANT) (RESPONDENT ) APPELLANT BY : SMT. PRATIMA KAUSHIK, SR. DR. RESPONDENT BY : SHRI H.R. AGARWALA, FCA O R D E R PER C.L. SETHI, JUDICIAL MEMBER: IN THIS APPEAL FILED BY THE REVENUE AGAINST THE LEA RNED COMMISSIONER OF INCOME-TAX (APPEALS)S ORDER DATED 21.06.2010, T HE REVENUE HAS ASSAILED THE CIT(A)S ORDER IN DIRECTING THE ASSESSING OFFIC ER TO ADOPT RATE OF NET PROFIT AT 6% OF TOTAL RECEIPTS AS AGAINST RATE OF 8 % ADOPTED BY THE AO. 2. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIAL ON RECORD. THE ASSESSING OFFICER COMPLETED THE ASSESSMENT BY A DOPTING RATE OF NET PROFIT AT 8% AND THEREBY THE AO MADE THE ADDITION O F RS.22,33,262/-. 2 3. ON AN APPEAL, THE LEARNED CIT(A) DIRECTED THE AO TO ADOPT RATE OF NET PROFIT OF 6%. RESULTANTLY, HE GRANTED A RELIEF OF RS.8,51,550/-. THE DEPARTMENT IS IN APPEAL AGAINST THE CIT(A)S ORDER IN GRANTING RELIEF OF RS.8,51,550/-. THE TOTAL TAX INVOLVED ON THE AMOUN T OF RS.8,51,550/- BEING RELIEF GRANTED BY THE LEARNED CIT(A) WOULD BE BELOW RS.3 LAKH AS PER THE RATE OF TAX APPLICABLE IN THE CASE OF INDIVIDUAL FO R THE ASSESSMENT YEAR 2004-05. THE PRESENT APPEAL WAS FILED BY THE DEPAR TMENT ON 19.08.2010. 4. THE CBDT VIDE INSTRUCTION NO.3 DATED 9.2.2011, H AS INSTRUCTED NOT TO FILE THE APPEAL BY THE REVENUE WHERE TAX EFFECT INV OLVED IS NOT IN EXCESS OF RS.3,00,000/-. THE REVISED LIMIT VIDE INSTRUCTION NO.3 DATED 9.2.2011 FOR FILING APPEAL BEFORE THE TRIBUNAL, HIGH COURT AND S UPREME COURT IS AS UNDER:- BEFORE THE INCOME TAX APPELLATE TRIBUNAL : RS.3 LA KHS, APPEALS U/S 260A OF THE IT ACT BEFORE THE HONBLE HIGH COURT : RS.10 LAK HS AND BEFORE THE HONBLE SUPREME COURT : RS.25 LAKHS IT IS SEEN THAT THE HONBLE HIGH COURT OF DELHI IN THE CASE OF CIT VS. DELHI RACE CLUB LTD. IN ITA NO.128/2008, DATED 3 RD MARCH, 2011, HAS HELD AS UNDER:- THE TAX EFFECT INVOLVED IN THE PRESENT APPEAL IS R S.4,65,860/-. AS PER RECENT GUIDELINES OF THE CBDT, APPEAL IN THO SE CASES WHERE THE TAX EFFECT IS LESS THAN 10 LACS, ARE NOT BE ENTERTAINED. 3 THIS COURT IN THE CASE OF COMMISSIONER OF INCOME-TA X-III V. M/S. P.S. JAIN AND CO. BEING NO.179/1991 DECIDED ON 2 ND AUGUST, 2010 HAS TAKEN A VIEW THAT SUCH CIRCULAR WO ULD ALSO APPLY TO PENDING CASES. SINCE IN THE PRESENT CASE, THE ABOVE REVISED INSTRU CTION IS FULLY APPLICABLE IN VIEW OF THE JUDGMENT OF THE HONBLE DELHI HIGH COUR T (SUPRA), HENCE IN OUR OPINION THE REVENUES APPEAL IS NOT MAINTAINABLE IN VIEW OF THE SAID CIRCULAR OF THE CBDT. REFERENCE MAY ALSO BE MADE T O THE DECISION OF HONBLE MADHYA PRADESH HIGH COURT IN THE CASE OF CI T VS. ASHOK KUMAR MANIBHAI PATEL & CO. (2009) 317 ITR 386 (MP). 5. WE FURTHER FIND THAT IT IS A SETTLED LAW THAT TH E CIRCULARS ISSUED BY CBDT ARE BINDING ON THE REVENUE. THIS POSITION WAS CONFIRMED BY THE APEX COURT IN THE CASE OF COMMISSIONER OF CUSTOMS V S. INDIAN OIL CORPORATION LTD. REPORTED IN 267 ITR 272 WHEREIN TH EIR LORDSHIPS EXAMINED THE EARLIER DECISIONS OF THE APEX COURT WI TH REGARD TO BINDING NATURE OF THE CIRCULAR AND LAID DOWN THAT WHEN A CI RCULAR ISSUED BY THE BOARD REMAINS IN OPERATION THEN THE REVENUE IS BOUND BY I T AND CANNOT BE ALLOWED TO PLEAD THAT IT IS NOT VALID OR THAT IT IS CONTRAR Y TO THE TERMS OF THE STATUTE. THE APPEAL UNDER CONSIDERATION HAS CERTAINLY BEEN F ILED CONTRARY TO THE CIRCULAR ISSUED BY THE CBDT INSTRUCTION NO.3 DATED 9.2.2011. 4 6. IN VIEW OF THE ABOVE, WE HOLD THAT THE APPEAL FI LED BY THE DEPARTMENT AGAINST THE IMPUGNED ORDER OF THE LD. CIT(A), IS NO T MAINTAINABLE AND DESERVES TO BE DISMISSED. WE ORDER ACCORDINGLY. 7. IN THE RESULT, APPEAL FILED BY THE REVENUE IS DI SMISSED. 8. THIS DECISION WAS PRONOUNCED IN THE OPEN COURT I MMEDIATELY AFTER THE HEARING WAS OVER ON 12 TH SEPTEMBER, 2011. SD/- SD/- (B.C. MEENA) (C.L. SETHI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 12 TH SEPTEMBER, 2011. COPY OF THE ORDER FORWARDED TO:- 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR BY ORDER *MG DEPUTY REGISTRAR, ITAT.