I.T.O.,Ward-35(1), Kolkata V. Prakash Chand Baid, Kolkata

ITA 410/KOL/2019

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 6181 (ITAT-KOLKATA)
• Duration Of Justice: 5 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-08-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2013-2014
• Appeal Filed On: 04-03-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NICHOLUS MURMU CITSRDR
• Keywords: Tax effect
• Section: 143(3); 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH SMC KOLKATA BEFORE SHRI S.S, GODARA, JUDICIAL MEMBER ITA NO.410/KOL/2019 ASSESSMENT YEAR:2013-14 INCOME TAX OFFICER, WARD-35(1), R.NO. 715, 7 TH FLOOR, AAYAKAR BHAWAN, POORVA, SHANTIPALLY, KOLKATA-001 / V/S . PRAKASH CHAND BAID 9, INDIA EXCHANGE PLACE, ROOM NO.3 5 TH FLOOR, KOLKTA-700001 [ PAN NO.AEBPB 7299 B ] /APPELLANT .. /RESPONDENT /BY APPELLANT SHRI NICHOLUS MURMU, ADDL. CIT-SR-DR /BY RESPONDENT NONE /DATE OF HEARING 18-07-2019 /DATE OF PRONOUNCEMENT 07-08-2019 /O R D E R THIS REVENUES APPEAL FOR ASSESSMENT YEAR 2013-14, ARISES AGAINST THE COMMISSIONER OF INCOME-TAX (APPEALS)-4, KOLKATAS O RDER DATED PASSED IN CASE NO. INVOLVING PROCEEDINGS U/S. 143(3) OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT. CASE CALLED TWICE. NONE APPEARS AT THE ASSESSEES B EHEST. THE REGISTRY HAS SENT AN RPAD NOTICE FOR TODAYS HEARING. IT IS ACCORDING LY PROCEEDED EX PARTE . 2. THE ONLY SUBSTANTIVE GROUND SEEKS TO RESTORE SEC . 14A R.W.S. 8D DISALLOWANCE OF 9,37,317/- RESTRICTED TO 1,55,281/- IN LOWER APPELLATE PROCEEDINGS. IT IS SE EN AT THE OUTSET THAT THE TAX EFFECT ON ALL DISPUTED DISA LLOWANCE S/ADDITIONS BEFORE ME IS LESS THAN RS. 20 LACS IN CASES THE PRESCRIBED REVIS ED THRESHOLD LIMIT IN CBDTS LATEST CIRCULAR NO. 3/2018 DATED 11.07.2018. IT WILL BE PE RTINENT TO REPRODUCE THE RELEVANT PORTION OF THE SAID CIRCULAR NO. 3/2018 DATED 11.07 .2018:- 3 . HENCEFORTH, APPEALS/ SLPS SHALL NOT BE FILED I N CASES WHERE THE TAX EFFECT DOES NOT EXCEED THE MONETARY LIMITS GIVEN HEREUNDER : ITA NO.410/KOL/2019 A.Y. 2013-14 ITO WD-35(1), KOL. VS. PRAKASH CHAND BAID PAGE 2 SL. NO. APPEALS/SLPS IN INCOME-TAX MATTERS MONETARY LIMIT (IN RS) 1. BEFORE APPELLATE TRIBUNAL 20,00,000/- 2. BEFORE HIGH COURT 50,00,000/- 3. BEFORE SUPREME COURT 1,00,00,000/- 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 B EEN CHARGEABLE HAD SUCH TOTAL INCOME BEEN REDUCED BY THE AMOUNT OF INCOME I N RESPECT OF THE ISSUES AGAINST WHICH APPEAL IS INTENDED TO BE FILED (HEREI NAFTER REFERRED TO AS ' DISPUTED ISSUES ). FURTHER, ' TAX EFFECT ' SHALL BE TAX INCLUDING APPLICABLE SURCHARGE AND CESS. HOWEVER, THE TAX WILL NOT INCLU DE ANY INTEREST THEREON, EXCEPT WHERE CHARGEABILITY OF INTEREST ITSELF IS IN DISPUTE. IN CASE THE CHARGEABILITY OF INTEREST IS THE ISSUE UNDER DISPUT E, 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 O N DISPUTED ADDITIONS. IN CASE OF PENALTY ORDERS, THE TAX EFFECT WILL MEAN QUANTUM OF PENALTY DELETED OR REDUCED IN THE ORDER TO BE APPEALED AGAINST. 3.1 I FIND THAT INTENTION BEHIND THE CIRCULAR NO3/2 018 DATED 11.07.2018 NEEDS TO BE UNDERSTOOD IN THE FOLLOWING PERSPECTIVE:- BY PASSAGE OF TIME, THE MONEY VALUE HAS GONE DOWN, THE COST OF LITIGATION EXPENSES HAS GONE UP, NUMBER OF ASSESSES ON THE FI LES OF THE DEPARTMENT HAVE BEEN INCREASED AND CONSEQUENTLY, THE BURDEN ON THE DEPARTMENT IS 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 CBDT HAS RIGHTLY TAKEN A DECISION TO REVISE THE MONETARY LIM ITS IN TUNE WITH THE PRESENT VALUE OF MONEY AND WITH A VIEW TO REDUCE THE LITIGA TION AND OFFERING RELIEF TO SMALL TAX PAYERS. THIS IS ALSO IN VIEW OF THE FACT THAT TIME AND ENERGY OF THE DEPARTMENT COULD BE USED MORE PRODUCTIVELY AND EFFI CIENTLY TO CATCH HOLD OF BIG FISHES, WHO IN TURN WOULD CONTRIBUTE MORE TO THE DE VELOPMENT OF THE COUNTRY. 3.2. ON PERUSAL OF THE CIRCULAR NO. 3/2018 DATED 11 .07.2018 AND THE MATERIALS AVAILABLE ON RECORD, I DO NOT SEE THIS CASE FALLING UNDER ANY OF THE EXCEPTIONS CONTEMPLATED IN THE SAID CIRCULAR PER SE . I ALSO FIND THAT THIS CIRCULAR MAKES IT VERY CLEAR THAT THE REVISED MONETARY LIMITS SHALL APPLY RETROSPECTIVELY TO PENDING APPEALS AS WELL. H ONBLE APEX COURT IN COMMISSIONER OF CUSTOMS VS IND IAN OIL CORPORATION LTD REPORTED IN 267 ITR 272 (SC) HAS SETTLED THE LAW THAT CBDTS CIRCULARS ARE VERY MUCH ITA NO.410/KOL/2019 A.Y. 2013-14 ITO WD-35(1), KOL. VS. PRAKASH CHAND BAID PAGE 3 BINDING ON REVENUE AUTHORITIES. I THUS HOLD THAT TH IS REVENUES APPEAL DESERVE TO BE DISMISSED IN TERMS OF LOW TAX EFFECT. I MAKE IT CLE AR THAT IT SHALL VERY MUCH OPEN FOR THE REVENUE TO SEEK NECESSARY RECTIFICATION IN CASE IT IS FOUND THAT ANY OF THESE APPEALS INVOLVE OPERATIONS OF EXCEPTION CLAUSES IN THE TAX EFFECT CIRCULAR AS PER LAW. 4. THIS REVENUES APPEAL IS DISMISSED FOR INVOLVING LOWER THAN THE PRESCRIBED MINIMUM TAX EFFECT. ORDER PRONOUNCED IN OPEN COURT ON 07/08/2019 SD/- (S.S. GODARA) JUDICIAL MEMBE R KOLKATA, *DKP/SR.PS - 07/08/2019 / COPY OF ORDER FORWARDED TO:- 1. /APPELLANT-ITO WARD-35(1), R.NO.715, 7 TH FLOOR, AAYAKAR BHAWAN, POORVA, SHANTI PALLY, KOLKATA-107 2. /RESPONDENT-PRAKASH CHAND BAID, 9, INDIA EXCHANGE P LACE, R. NO.3, 5 TH FLOOR, KOLKATA-001 3. ' % / CONCERNED CIT 4. % - / CIT (A) 5. & ))' , ' / DR, ITAT, KOLKATA 6. + / GUARD FILE. BY ORDER/ , /TRUE COPY/ / ',