ITO, New Delhi V. M/s. Trinity Enterprises (P) Ltd, New Delhi

ITA 4160/DEL/2009

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 7326 (ITAT-DELHI)
• Duration Of Justice: 6 year(s) 2 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-01-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: H
• Next Hearing Date: 14-12-2015
• Assessment Year: 2001-2002
• Appeal Filed On: 22-10-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AASISH MOHANTY
• Assessee Lawyers: AASISH CHADHA
• Keywords: Audit objection; Tax effect
• Section: 12A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH H, NEW DELHI BEFORE SH. R.S. SYAL, AM AND SMT. BEENA A PILLAI, J M ITA NO. 4160/DEL/2009 ASSESSMENT YEAR : 2001-02 ITO, WARD 16(4), ROOM NO. 143, C.R. BUILDING, NEW DELHI. VS TRINITY ENTERPRISES (P) LTD., 164-B, SAINIK FARM, NEW DELHI. (APPELLANT) (RESPONDENT) & CROSS OBJECTION NO. 72/DEL/2010 ASSESSMENT YEAR : 2001-02 TRINITY ENTERPRISES (P) LTD., 164-B, SAINIK FARM, NEW DELHI. VS ITO, WARD 16(4), ROOM NO. 143, C.R. BUILDING, NEW DELHI. (APPELLANT) (RESPONDENT) APPELLANT BY : SH. AASISH MOHANTY, SR. DR RESPONDENT BY : SHRI AASISH CHADHA, CA DATE OF HEARING : 18.01.2016 DATE OF PRONOUNCEMENT : 18.01.2016 ORDER PER BEENA A PILLAI, J.M. THIS APPEAL BY THE DEPARTMENT AND CROSS OBJECTION BY THE ASSESSEE ARE DIRECTED AGAINST THE ORDER PASSED BY THE LD. CIT (A) DATED 07.08.2009 FOR A.Y. 2001-02. 2. THE LD. COUNSEL FOR THE ASSESSEES STATED THAT THE T AX EFFECT IN EACH OF THE DEPARTMENTAL APPEALS ARE LESS THAN RS. 10 LACS. THEREFORE, THE REVENUE OUGHT NOT TO HAVE FILED THE APPEALS AS DIRECTED BY THE CBDTS LATEST CIRCULAR N O. 21/2015 DATED 10/12/2015. AS REGARDS TO THE CROSS OBJECTIO NS THE LD. COUNSEL FOR THE ASSESSEE STATED THAT IT IS IN SUPPO RT OF THE ORDER OF THE LD.CIT(A). 3. DURING THE COURSE OF HEARING, THE LD. D.R., ALTH OUGH SUPPORTED THE ORDER OF THE ASSESSING OFFICER, BUT C OULD NOT CONTROVERT THIS FACT THAT TAX EFFECT IN THIS APPEAL IS LESS THAN RS.10,00,000/-. 4. AFTER CONSIDERING THE SUBMISSIONS OF BOTH THE PA RTIES AND THE MATERIAL ON RECORD, IT IS NOTICED THAT SECTION 268A HAS BEEN INSERTED BY THE FINANCE ACT, 2008 WITH RETROSPECTIV E EFFECT FROM 01/04/99. THE PROVISIONS CONTAINED IN SECTION 268A READ AS UNDER: 268A. (1) THE BOARD MAY, FROM TIME TO TIME, ISSUE ORDERS, INSTRUCTIONS OR DIRECTIONS TO OTHER INCOME- TAX AUTHORITIES, FIXING SUCH MONETARY LIMITS AS IT MAY DEEM FIT, FOR THE PURPOSE OF REGULATING FILING OF APPEAL OR APPLICATION FOR REFERENCE BY ANY INCOME- TAX AUTHORITY UNDER THE PROVISIONS OF THIS CHAPTER. (2) WHERE, IN PURSUANCE OF THE ORDERS, INSTRUCTIONS OR DIRECTIONS ISSUED UNDER SUB-SECTION (1), AN INCOME-TAX AUTHORITY HAS NOT FILED ANY APPEAL OR APPLICATION FOR REFERENCE ON ANY ISSUE IN THE CASE OF AN ASSESSEE FOR ANY ASSESSMENT YEAR, IT SHALL NOT PRECLUDE SUCH AUTHORITY FROM FILING AN APPEAL OR APPLICATION FOR REFERENCE ON THE SAME ISSUE IN THE CASE OF (A) THE SAME ASSESSEE FOR ANY OTHER ASSESSMENT YEAR; OR (B) ANY OTHER ASSESSEE FOR THE SAME OR ANY OTHER ASSESSMENT YEAR. (3) NOTWITHSTANDING THAT NO APPEAL OR APPLICATION FOR REFERENCE HAS BEEN FILED BY AN INCOME-TAX AUTHORITY PURSUANT TO THE ORDERS OR INSTRUCTIONS OR DIRECTIONS ISSUED UNDER SUB-SECTION (1), IT SHALL N OT BE LAWFUL FOR AN ASSESSEE, BEING A PARTY IN ANY APPEAL OR REFERENCE, TO CONTEND THAT THE INCOME-TAX AUTHORITY HAS ACQUIESCED IN THE DECISION ON THE DISPUTED ISSUE BY NOT FILING AN APPEAL OR APPLICATI ON FOR REFERENCE IN ANY CASE. (4) THE APPELLATE TRIBUNAL OR COURT, HEARING SUCH APPEAL OR REFERENCE, SHALL HAVE REGARD TO THE ORDERS, INSTRUCTIONS OR DIRECTIONS ISSUED UNDER SUB - SECTION (1) AND THE CIRCUMSTANCES UNDER WHICH SUCH APPEAL OR APPLICATION FOR REFERENCE WAS FILED OR NO T FILED IN RESPECT OF ANY CASE. (5) EVERY ORDER, INSTRUCTION OR DIRECTION WHICH HAS BEEN ISSUED BY THE BOARD FIXING MONETARY LIMITS FOR FILING AN APPEAL OR APPLICATION FOR REFERENCE SHALL BE DEEMED TO HAVE BEEN ISSUED UNDER SUB-SECTION (1) AND THE PROVISIONS OF SUB-SECTIONS (2), (3) AND (4) SHALL APPLY ACCORDINGLY.] 5. IT IS NOT IN DISPUTE THAT THE BOARDS INSTRUCTIO N OR DIRECTIONS ISSUED TO THE OTHER INCOME-TAX AUTHORITI ES ARE BINDING ON THOSE AUTHORITIES, THEREFORE, THE DEPART MENT OUGHT NOT TO HAVE FILED THE APPEAL IN VIEW OF THE ABOVE M ENTIONED SECTION 268A SINCE THE TAX EFFECT IN THE INSTANT CA SE IS LESS THAN THE AMOUNT PRESCRIBED FOR NOT FILING THE APPEAL. 6. IT IS NOTICED THAT THE CBDT HAS ISSUED CIRCULAR NO.21 OF 2015 DATED 10.12.2015, VIDE WHICH IT HAS REVISED TH E MONETARY LIMIT TO RS.10,00,000/- FOR NOT FILING THE APPEAL BEFORE THE TRIBUNAL. THE SAID CIRCULAR READ AS UNDER: SUBJECT : REVISION OF MONETARY LIMITS FOR FI LING OF APPEALS BY THE DEPARTMENT BEFORE INCOME TAX APPELLATE TRIBUNAL AND HIGH COURTS AND SLP BEFORE SUPREME COURT MEASURES FOR REDUCING LITIGATION REG. REFERENCE IS INVITED TO BOARDS INSTRUCTION NO 5/20 14 DATED 10.07.2014 WHEREIN MONETARY LIMITS AND OTHER CONDITIONS FOR FILING DEPARTMENTAL APPEALS (IN INCO ME- TAX MATTERS) BEFORE APPELLATE TRIBUNAL AND HIGH COURTS AND SLP BEFORE THE SUPREME COURT WERE SPECIFIED. 2. IN SUPERSESSION OF THE ABOVE INSTRUCTION, IT HAS BEEN DECIDED BY THE BOARD THAT DEPARTMENTAL APPEALS MAY BE FILED ON MERITS BEFORE APPELLATE TRIBUNAL AN D HIGH COURTS AND SLP BEFORE THE SUPREME COURT KEEPING IN VIEW THE MONETARY LIMITS AND CONDITIONS SPECIFIED BELOW. 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 MATTER MONETARY LIMIT (IN RS) 1 BEFORE APPELLATE TRIBUNAL 10,00,000/- 2 BEFORE HIGH COURT 20,00,000/- 3 BEFORE SUPREME 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 CHARGEABL E HAD SUCH TOTAL INCOME BEEN REDUCED BY THE AMOUNT OF INCOME IN RESPECT OF THE ISSUES AGAINST WHICH APPEA L IS INTENDED TO BE FILED (HEREINAFTER REFERRED TO AS DISPUTED ISSUES). HOWEVER THE TAX WILL NOT INCLUD E ANY INTEREST THEREON, EXCEPT WHERE CHARGEABILITY OF INTEREST ITSELF IS IN DISPUTE. IN CASE THE CHARGEAB ILITY 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 CASE OF PENALTY ORDERS, THE TAX EFFEC T WILL MEAN QUANTUM OF PENALTY DELETED OR REDUCED IN THE ORDER TO BE APPEALED AGAINST. 5. THE ASSESSING OFFICER SHALL CALCULATE THE TAX EFFECT SEPARATELY FOR EVERY ASSESSMENT YEAR IN RESP ECT OF THE DISPUTED ISSUES IN THE CASE OF EVERY ASSESSE E. IF, IN THE CASE OF AN ASSESSEE, THE DISPUTED ISSUES ARI SE IN MORE THAN ONE ASSESSMENT YEAR, APPEAL, CAN BE FILED IN RESPECT OF SUCH ASSESSMENT YEAR OR YEARS IN WHIC H THE TAX EFFECT IN RESPECT OF THE DISPUTED ISSUES EX CEEDS 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 MONE TARY LIMIT SPECIFIED IN PARA 3. IN OTHER WORDS, HENCEFOR TH, 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 AUTHORITY, WHICH INVOLVES MORE THAN ONE ASSESSMENT YEAR AND COMMON ISSUES IN MORE THAN ONE ASSESSMENT YEAR, APPEAL SHALL BE FILED IN RESPECT O F ALL SUCH ASSESSMENT YEARS EVEN IF THE TAX EFFECT IS L ESS 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. 6. IN A CASE WHERE APPEAL BEFORE A TRIBUNAL OR A COURT IS NOT FILED ONLY ON ACCOUNT OF THE TAX EFFEC T BEING LESS THAN THE MONETARY LIMIT SPECIFIED ABOVE, THE COMMISSIONER OF INCOME-TAX SHALL SPECIFICALLY RECOR D THAT EVEN THOUGH THE DECISION IS NOT ACCEPTABLE, 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 CA SES, THERE WILL BE NO PRESUMPTION THAT THE INCOME-TAX DEPARTMENT HAS ACQUIESCED IN THE DECISION ON THE DISPUTED ISSUES. THE INCOME-TAX DEPARTMENT SHALL NO T BE PRECLUDED FROM FILING AN APPEAL AGAINST THE DISPUTED ISSUES IN THE CASE OF THE SAME ASSESSEE FO R ANY OTHER ASSESSMENT YEAR, OR IN THE CASE OF ANY OT HER ASSESSEE FOR THE SAME OR ANY OTHER ASSESSMENT YEAR, IF THE TAX EFFECT EXCEEDS THE SPECIFIED MONETARY LIMIT S. 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 HAS IMPLICITLY ACCEPTED THE DECISION OF THE TRIBUNAL OR COURT IN T HE CASE OF THE ASSESSEE FOR ANY OTHER ASSESSMENT YEAR OR IN THE CASE OF ANY OTHER ASSESSEE FOR THE SAME OR A NY OTHER ASSESSMENT YEAR, BY NOT FILING AN APPEAL ON T HE SAME DISPUTED ISSUES. THE DEPARTMENTAL REPRESENTATIVES/COUNSELS MUST MAKE EVERY EFFORT TO BRING TO THE NOTICE OF THE TRIBUNAL OR THE COURT TH AT THE APPEAL IN SUCH CASES WAS NOT FILED OR NOT ADMIT TED ONLY FOR THE REASON OF THE TAX EFFECT BEING LESS TH AN THE SPECIFIED MONETARY LIMIT AND, THEREFORE, NO INFERENCE SHOULD BE DRAWN THAT THE DECISIONS RENDER ED 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 FILING APPE AL DUE TO THIS INSTRUCTION MAY HAVE TO BE PRODUCED IN COURTS, THE JUDICIAL FOLDERS IN THE OFFICE OF CIT M UST BE MAINTAINED IN A SYSTEMIC MANNER FOR EASY RETRIEV AL. 8. ADVERSE JUDGMENTS RELATING TO THE FOLLOWING ISSUES SHOULD BE CONTESTED ON MERITS NOTWITHSTANDIN G THAT THE TAX EFFECT ENTAILED IS LESS THAN THE MONET ARY LIMITS SPECIFIED IN PARA 3 ABOVE OR THERE IS NO TAX EFFECT: (A) WHERE THE CONSTITUTIONAL VALIDITY OF THE PROVISIONS OF AN ACT OR RULE ARE UNDER CHALLENGE, OR (B) WHERE BOARDS ORDER, NOTIFICATION, INSTRUCTION OR CIRCULAR HAS BEEN HELD TO BE ILLEGAL OR ULTRA VIRES, OR (C) WHERE REVENUE AUDIT OBJECTION IN THE CASE HAS BEEN ACCEPTED BY THE DEPARTMENT, OR (D) WHERE THE ADDITION RELATES TO UNDISCLOSED FOREIGN ASSETS/ BANK ACCOUNTS. 9. THE MONETARY LIMITS SPECIFIED IN PARA 3 ABOVE SHALL NOT APPLY TO WRIT MATTERS AND DIRECT TAX MATT ERS OTHER THAN INCOME TAX. FILING OF APPEALS IN OTHER DIRECT TAX MATTERS SHALL CONTINUE TO BE GOVERNED BY RELEVANT PROVISIONS OF STATUTE & RULES. FURTHER, FI LING OF APPEAL IN CASES OF INCOME TAX, WHERE THE TAX EFF ECT IS NOT QUANTIFIABLE OR NOT INVOLVED, SUCH AS THE CA SE OF REGISTRATION OF TRUSTS OR INSTITUTIONS UNDER SECTIO N 12A OF THE IT ACT, 1961, SHALL NOT BE GOVERNED BY T HE LIMITS SPECIFIED IN PARA 3 ABOVE AND DECISION TO F ILE APPEAL IN SUCH CASES MAY BE TAKEN ON MERITS OF A PARTICULAR CASE. 10. THIS INSTRUCTION WILL APPLY RETROSPECTIVELY TO PENDING APPEALS AND APPEALS TO BE FILED HENCEFORTH IN HIGH COURTS/ TRIBUNALS. PENDING APPEALS BELOW THE SPECIFIED TAX LIMITS IN PARA 3 ABOVE MAY BE WITHDRAWN/ NOT PRESSED. APPEALS BEFORE THE SUPREME COURT WILL BE GOVERNED BY THE INSTRUCTIONS ON THIS SUBJECT, OPERATIVE AT THE TIME WHEN SUCH APPEAL WAS FILED. 11. THIS ISSUES UNDER SECTION 268A (1) OF THE INCOME-TAX ACT 1961. 7. FROM CLAUSE 10 OF THE ABOVE CIRCULAR IT IS CLEAR THAT THESE INSTRUCTIONS ARE APPLICABLE TO THE PENDING APPEALS ALSO AND THERE IS CLEAR CUT INSTRUCTION TO THE DEPARTMENT TO WITHDRAW OR NOT TO PRESS THE APPEALS FILED BEFORE THE ITAT WHER EIN TAX EFFECT IS LESS THAN RS.10,00,000/-. THESE INSTRUCTI ONS ARE OPERATIVE RETROSPECTIVELY TO THE PENDING APPEALS. 8. KEEPING IN VIEW THE CBDT CIRCULAR NO.21 OF 2015 DATED 10.12.2015 AND ALSO THE PROVISIONS OF SECTION 268A OF INCOME TAX ACT, 1961, WE ARE OF THE VIEW THAT THE REVENUE SHOULD NOT HAVE FILED THE INSTANT APPEALS BEFORE THE TRIBUNAL. ACCORDINGLY THESE APPEALS OF THE REVENUE ARE DISMISSED. SIMILAR LY BY CONSIDERING THE SUBMISSIONS OF LD.COUNSEL FOR THE A SSESSE, AS MENTIONED IN THE FORMER PARAS OF THIS ORDER, THE CR OSS OBJECTION OF THE ASSESSE ARE DISMISSED AS NOT PRESSED. 11. IN THE RESULT, THE APPEAL FILED BY THE REVENUE AS WELL AS THE CROSS OBJECTION FILED BY THE ASSESSEE STANDS DISMISSED. ORDER PRONOUNCED IN THE COURT ON 18.01.2016 SD/- SD/- (R.S. SYAL) (BEENA A. PILLAI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 18.01.2016 * KAVITA ARORA, P.S. COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR