ITO 20(2)(1), MUMBAI V. MURTAZA MOHAMMED SHAMA, MUMBAI

ITA 4302/MUM/2015

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 3839 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 1 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-08-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2007-2008
• Appeal Filed On: 10-07-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: CULLA MUMBAI PAN AA UPSM
• Keywords: Audit objection; Tax effect
• Section: 143(3); 147

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH , MUMBAI BEFORE SRI MAHAVIR SINGH, J M ITA NO . 4302 /MUM/201 5 (A.Y:200 7 - 08 ) INCOME TAX OFFICER , 20(2)(1), ROOM NO.216, 2 ND FLOOR, PIRAMAL CHAMBERS, LALBAUG, PAREL, MUMBAI 400 012 VS. SHRI MURTAZA M. SHAMA , B - 791, 7 TH FLOOR, FATIMA APARTMENT, 109, MORLAND ROAD, BYCULLA, MUMBAI 08 PAN: AAUPS 1152M APPELLANT .. RESPONDENT APPELLANT BY SHRI MANOJ K UMAR, SR.DR RESPONDENT BY SHRI MARLON REGO, AR DATE OF HEARING 07 - 07 - 2016 DATE OF PRONOUNCEMENT 10 - 0 8 - 2 016 O R D E R PER MAHAVIR SINGH , JM : TH IS APPEAL BY THE REVENUE IS ARISING OUT OF ORDER OF CIT (OSD) (A) IN APPEAL NO. CIT ( A) - 32/ IT - 119/17(3)/2014 - 15 DATED 28 - 04 - 2015 . ASSESSMENT WAS FRAMED BY ITO - 17(3)(3), MUMBAI FOR THE ASSESSMENT YEAR 200 7 - 08 U/ S 143(3) R. W. S . 147 OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) VIDE HIS ORDER DATED 28 - 02 - 2014 . 2. AT THE OUTSET, IT IS SEEN THAT THE TAX EFFECT IN THIS APPEAL OF REVENUE ON THE DISPUTED ADDITIONS MADE BY AO AND DELETED BY CIT ( A) , WHICH IS LESS THAN RS. 10 LACS. 3. I HAVE HEARD THE PARTIES AND PERUSED THE MATERIALS AVAILABLE ON RECORD. IT IS SEEN FROM THE PERUSAL OF THE RECORDS THAT THE TOTAL TAX EFFECT ON THE ADDITIONS DISPUTED BEFORE US IS ADMITTEDLY BELOW THE TAX EFF ECT LIMIT PRESCRIBED BY CBDT VIDE CIRCULAR NO. 21 / 2015 DATED 10.12.2015 FOR PREFERRING APPEALS BEFORE TRIBUNAL BY THE REVENUE. IT WILL BE PERTINENT TO REPRODUCE THE RELEVANT PORTION OF THE SAID CIRCULAR NO. 21 / 2015 DATED 10.12.2015: - 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 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. ITA NO. 4302 /MUM/20 1 5 2 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 T O BE FILED (HEREINAFTER 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 CASE OF PENALTY ORDERS, THE TAX EFFECT 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 RESPECT OF THE DISPUTED ISSUES IN THE CASE OF EVERY ASSESSEE. IF, 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 ASSES SMENT 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 ORDE R 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 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. 8. ADVERSE JUDGEMENTS 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 THERE IS NO TAX EFFECT: (A) WHERE THE CON STITUTIONAL 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. 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. 3.1 ON PERUSAL OF THE CIRCULAR NO. 21 / 2015 DATED 10.12. 2015 AND THE M ATERIALS AVAILABLE ON RECORD, I COULD NOT SEE WHETHER THE IMPUGNED CASE FALLS UNDER ANY OF THE EXCEPTIONS CONTEMPLATED IN THE SAID CIRCULAR , AS LD. SR . DR COULD NOT POINT OUT ANY EXCEPTION AS PROVIDED IN THE CIRCULAR . I ALSO FIND THAT THE CI RCULAR MAKES IT VERY CLEAR THAT THE REVISED MONETARY LIMITS SHALL APPLY RETROSPECT IVELY TO PENDING APPEALS ALSO. I FIND THAT THE ITA NO. 4302 /MUM/20 1 5 3 CIRCULAR IS BINDING ON THE TAX AUTHORITIES. THIS POSITION HAS BEEN CONFIRMED BY THE HONBLE APEX COURT IN THE CASE OF COMMISSIO NER OF CUSTOMS VS . INDIAN OIL CORPORATION LTD REPORTED IN 267 ITR 272 (SC) WHEREIN THEIR LORDSHIPS EXAMINED THE EARLIER DECISIONS OF THE APEX COURT WITH REGARD TO BINDING NATURE OF THE CIRCULARS AND LAID DOWN THAT WHEN A CIRCULAR ISSUED BY THE BOARD REMAIN S IN OPERATION THEN THE REVENUE IS BOUND BY IT AND CANNOT BE ALLOWED TO PLEAD THAT IT IS NOT VALID OR THAT IT IS CONTRARY TO THE TERMS OF THE STATUTE. HENCE WE HOLD THAT THE APPEAL(S) OF THE REVENUE DESERVE TO BE DISMISSED IN TERMS OF LOW TAX EFFECT VIDE CIRCULAR NO.21 / 2015 DATED 10.12.2015. ACCORDINGLY, THIS BEING A LOW TAX EFFECT CASE, I DISMISS THE APPEAL OF THE REVENUE IN LIMINE, AS UNADMITTED, WITHOUT GOING INTO THE MERITS OF THE CASE. 4. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED INL IMINE. ORDER PRONOUNCED IN THE OPEN COURT ON 10 - 08 - 2016 1 . THE APPELLANT: I T O 20(2) 1 , ROOM NO. 216, 2 ND FLOOR, PIRAMAL CHAMBERS, LALBAUG, PAREL, MUMBAI - 12. 2 THE RESPONDENT - SHRI MURTAZA MOHAMMED SHAMA B - 701, 7 TH FLOOR, FATIMA APT., 109 MORLAND ROAD, BYCULLA, MUMBAI - 8. 3 / THE CIT, 4.THE CIT(A) 5 . DR, MUMBAI BENCH 6 . GUARD FILE . TRUE COPY, BY ORDER, ASSTT REGISTRAR **PRADIP/SPS LKDEKA MUMBAI, DATED, 10 - 08 - 2016 SD/ - MAHAVIR SINGH JUDICIAL MEMBER COP Y OF THE ORDER FORWARDED TO: - ITA NO. 4302 /MUM/20 1 5 4 SR.NO. PARTICULA RS DATE INITIALS PERSON CONCERNED 1 DICTATION GIVEN ON ( T.E FORMAT) 7/7 PP 2 DRAFT PLACED BEFORE AUTHOR 14/7 8/8 PP /LKD 3 DRAFT PROPOSED/PLACED BEFORE THE SECOND MEMBER 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER 5 APPROVED DRAFT COMES TO THE SR.PS 6 KEPT FOR PRONOUNCEMENT ON 10/8 7 FILE SENT TO THE BENCH CLERK 8 DATE ON WHICH FILE GOES TO THE HEAD CLERK 9 DATE OF DISPATCH OF ORDER