ITO 23 (3)(2) , MUMBAI V. SANDHYA ENTERPRISES , MUMBAI

ITA 426/MUM/2020

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 7505 (ITAT-MUMBAI)
• Duration Of Justice: 7 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-08-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Assessment Year: 2011-2012
• Appeal Filed On: 16-01-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V VINOD KUMAR
• Keywords: Tax effect
• Section: 143(3); 13

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH G MUMBAI BEFORE SHRI MAHAVIR SINGH (VICE PRESIDENT) AND SHRI N.K. PRADHAN (ACCOUNTANT MEMBER) ITA NO. 7725/MUM/2019 ASSESSMENT YEAR: 2009 - 10 & ITA NO. 7726/MUM/2019 ASSESSMENT YEAR: 2010 - 11 & ITA NO. 426/MUM/2020 ASSESSMENT YEAR: 2011 - 12 INCOME TAX OFFICER - 23(3)(2), ROOM NO. 119, 1 ST FLOOR, MATRU MANDIR, GRANT ROAD, TARDEO ROAD, MUMBAI - 400007. VS. SANDHYA ENTERPRISES, 107, A - WING, RIZVI CHAMBER, HILL ROAD, BANDRA (WEST), MUMBAI - 400050. PAN NO. ACHFS3893C APPELLANT RESPONDENT REVENUE BY : MR. V. VINOD KUMAR, DR ASSESSEE BY : MR. PRAKASH JHUNJHUNWALA, AR DATE OF HEARING : 31/08/2020 DATE OF PRONOUNCEMENT : 31/08/2020 ORDER PER BENCH THE CAPTIONED APPEALS FILED BY THE REVENUE ARE DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) - 34, MUMBAI [IN SHORT CIT(A)] AND ARISE OUT OF ASSESSMENTS COMPLETED U/S 143(3) R.W.S. 147 OF THE INCOME TAX ACT 1961, (THE ACT). SINCE COMMON ISSUES ARE INVOLVED, WE ARE PROCEEDINGS TO DISPOSE THEM OFF THROUGH A CONSOLIDATED ORDER. SANDHYA ENTERPRISES ITA NOS. 7725& 7726/M/2019& 426/M/2020 2 THE CENTRAL BOARD OF DIRECT TAXES (CBDT) VIDE CIRCULAR NO. 3/2018 DATED 11.07.20 18 HAS SPECIFIED THAT APPEALS SHALL NOT BE FILED BEFORE THE INCOME TAX APPELLATE TRIBUNAL (ITAT) IN CASES WHERE THE TAX EFFECT DOES NOT EXCEED THE MONETARY LIMIT OF RS.20,00,000/ - . FOR THIS PURCHASE, 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 ISSUES AGAINST WHICH APPEAL IS INTENDED TO BE FILED. FURTHER, TAX EFFECT SHALL BE TAXES INCLUDING APPLICABLE SURCH ARGE AND CESS. 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 W HERE RETURNED LOSS IS REDUCED OR ASSESSED AS INCOME, THE TAX EFFECT WOULD INCLUDE NOTIONAL TAX ON DISPUTED ADDITIONS. IN CASE OF PENALTY ORDER, THE TAX EFFECT WILL MEAN QUANTUM OF PENALTY DELETED OR REDUCED IN THE ORDER TO BE APPEALED AGAINST. AT PARA 13 OF THE ABOVE CIRCULAR, IT HAS BEEN MENTIONED THAT: 13. THIS CIRCULAR WILL APPLY TO SLPS/APPEALS/CROSS OBJECTION/REFERENCES TO BE FILED HENCEFORTH IN SC/HCS/TRIBUNAL AND IT SHALL ALSO APPLY RETROSPECTIVELY TO PENDING SLPS/APPEALS/CROSS OBJECTIONS/REFERE NCES. PENDING APPEALS BELOW THE SPECIFIED TAX LIMITS IN PARA 3 ABOVE MAY BE WITHDRAWN/NOT PRESSED. 2 . FURTHER, VIDE CIRCULAR NO. 17/2019 DATED 08.08.2019, THE CBDT HAS ENHANCED THE MONETARY LIMIT FOR FILING APPEALS IN INCOME TAX CASES BEFORE THE APPEL LATE TRIBUNAL TO RS.50,00,000/ - . IN THE ABOVE CIRCULAR, IT IS CLARIFIED THAT : 3. FURTHER, WITH A VIEW TO PROVIDE PARITY IN FILING OF APPEALS IN SCENARIOS WHERE SEPARATE ORDER IS PASSED BY HIGHER APPELLATE AUTHORITIES FOR EACH ASSESSMENT SANDHYA ENTERPRISES ITA NOS. 7725& 7726/M/2019& 426/M/2020 3 YEAR VIS - A - VIS WH ERE COMPOSITE ORDER FOR MORE THAN ONE ASSESSMENT YEARS IS PASSED. PARA 5 OF THE CIRCULAR IS SUBSTITUTED BY THE FOLLOWING PARA: '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. IF, INTHE 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. FURTHER, EVEN IN THE CASE OF 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, 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 CA SE WHERE A COMPOSITE ORDER/JUDGEMENT INVOLVES MORE THAN ONE ASSESSEE, EACH ASSESSEE SHALL BE DEALT WITH SEPARATELY.' 3 . BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE SUBMITS THAT THE LD. CIT(A) VIDE ORDER DATED 12.09.2019 HAS DELETED THE ADDITION OF RS.98,00,000/ - FOR AY 2009 - 10 AND ADDITION OF RS.1,22,18,000/ - FOR AY 2010 - 11. FURTHER, IT IS STATED BY HIM THAT THE LD. CIT(A) VIDE ORDER DATED 28.10.2019 HAS DELETED THE ADDITION OF RS.74,65,500/ - FOR AY 2011 - 12. THUS THE LD. COUNSEL EX PLAINS THAT THE TAX ON DISPUTED ISSUE IS RS.30,28,200/ - FOR AY 2009 - 10, RS.37,75,362/ - FOR AY 2010 - 11 AND RS.23,06,840/ - FOR AY 2011 - 12. STATING THE ABOVE, THE LD. COUNSEL SUBMITS THAT AS THE TAX EFFECTS FOR THE IMPUGNED ASSESSMENT YEARS ARE LESS THAN RS .50,00,000/ - , THE DEPARTMENTS APPEAL BE DISMISSED BY FOLLOWING THE CBDT CIRCULAR NO. 17/2019 DATED 08.08.2019. SANDHYA ENTERPRISES ITA NOS. 7725& 7726/M/2019& 426/M/2020 4 4. WE ASKED THE LD. DEPARTMENTAL REPRESENTATIVE (DR) TO CLARIFY WHETHER THE ISSUES HEREIN FALL IN EXCEPTION CARVED OUT IN THE ABOVEMENTIONED CI RCULAR. IT IS STATED BY HIM THAT THE ISSUES HEREIN DO NOT FALL IN THE EXCEPTIONS ENUMERATED IN THE SAID CIRCULAR. 5 . IN VIEW OF THE FACTS AND CIRCUMSTANCES , THESE APPEALS INVOLVING TAX EFFECT OF LESS THAN RS. 50 ,00,000/ - ARE DISMISSED AS WITHDRAWN. ORDER P RONOUNCED IN THE OPEN COURT ON 31/08/2020. SD/ - SD/ - ( MAHAVIR SINGH ) (N.K. PRADHAN) VICE PRESIDENT ACCOUNTANT MEMBER MUMBAI ; DATED: 31/08/2020 RAHUL SHARMA, SR. P.S. COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A) - 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT. REGISTRAR) ITAT, MUMBAI