Income Tax Officer, Ward-1, Mandi Gobindgarh, Hq Sirhind V. New Fatehgarh Sahib Sirhind Bus Transport Pvt. Ltd., Sirhind

ITA 469/CHANDI/2023

• Counselvise Citation: [2024] 100 COUNSELVISE.COM (IT) 1108 (ITAT-CHANDIGARH)
• Duration Of Justice: 11 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-07-2024
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 03-07-2024
• Assessment Year: 2018-2019
• Appeal Filed On: 20-07-2023
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Tax effect; Tax effect
• Section: 43B; 139(1)

Judgement Text

आयकर अपील य अ धकरण,च डीगढ़ यायपीठ , च डीगढ़ IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH ‘B’ CHANDIGARH BEFORE: SHRI KRINWANT SAHAY, ACCOUNTANT MEMBER AND SHRI PARESH M. JOSHI, JUDICIAL MEMBER, आयकर अपील सं./ ITA No. 469/CHD/2023 नधा रण वष / Assessment Year : 2018-19 The ITO, Ward – 1, Mandi Gobindgarh. बनाम VS New Fatehgarh Sahib Sirhind Bus Transport Pvt. Ltd., Sirhind. थायी लेखा सं./PAN /TAN No: AAACN6485F अपीलाथ /Appellant यथ /Respondent राज व क ओर से/ Revenue by : Shri Dharam Vir, JCIT, Sr.DR नधा रती क ओर से/Assessee by : None तार"ख/Date of Hearing : 04.07.2024 उदघोषणा क तार"ख/Date of Pronouncement : 05.07.2024 PHYSICAL HEARING आदेश/ORDER PER PARESH M. JOSHI, JM This is an appe al filed by t he Revenue against the orde r of the Ld. CI T(A)/NFAC De lhi date d 23.03.2022 bearing No. I TBA/NFAC/S/250/2021-22/1041322322340(1) pe rtaining to asse ss ment year 2018-19, which is he reinafter referred to as “impugned order”. Factual Matrix 2. The fac ts re le vant are , that as se ssee had filed return of income on 01.10.2018 where in t he income was declared at Rs . 1,30,098/-. The Tax A udit Re port reveale d that while remitting employee s cont ribution on accou nt of ESI & EPF, there were ITA 469/CHD/2023 A.Y. 2018-19 2 delays for t he payme nt made a fter the specifie d du e dates u nde r the respective A ct s. Eve n thou gh t he date of actual payme nt was well be fore the due date unde r Section 139(1) of the Act, the CPC has relied upon the data as pe r audit re port and made the disallowance . The assesse e was aggrie ve d of this and there fore, file d an a ppe al before ld. CI T(A ). The appe al was file d as by virt ue of order u /s 154 dated 06.03.2020 fo r ass essme nt ye ar 2018-19 which is in consequenc e of pro ce ssing of return u/s 143(1). The said orde r resulte d in disallowance of Employe es Prov ide nt Fund of Rs.1,93,899/- and ESI of Rs.12,475/- aggregating to R s.2,06,374/- u /s 36)1)(va) of t he Act. The asse ssee contended be fore CI T(A) that CPC has e rre d in enhancing the inco me by Rs.2,06,374/- by passing an orde r u/s 154 dated 06.03.2020. There was no mis take appare nt on record. No opportunity was give n before passing orde r u /s 154 date d 06.03.2020. That no addition/disallowance on ac co unt of EPF&ESI of Rs.1,93,899/- and Rs .12,475/- re spe ctively totaling Rs.2,06,374/- could be made . The y sought relief from CI T(A). The ld. CI T(A) by impugne d orde r has allowed the ir appeal on the basis of law t he n prevailing. He he ld that disallowance made u /s 36(1)(v a) amounting t o Rs.2,06,374/-is deleted. Ground allowed. 3. Being ag grieved by the “impug ne d order” the Department is in appeal be fore us and have rais ed several grounds of appeal in Form 36 be fore us. The total tax effect is Rs.63,769/-. ITA 469/CHD/2023 A.Y. 2018-19 3 Record of Hearing 4. The ld. DR at the outset contende d that there is a delay of 425 days and sought condo nat ion of delay by placing reliance on decision of Hon'ble Calc utta High Court in case of PCI T V s M/s Organon India P.Ltd. (I TA No./16/2020) which by order date d 15.06.2022 has held that – where the re is substantial que stio n of law involve d, appeal should not be reje cte d on technical ground of de lay. Hence, delay of 425 days be condoned. Affidavit in support was plac ed on re cord dat ed 13.06.2024. The reliance was placed on the judgeme nt of Hon'ble Supre me Court of India in case of M/s C he ckmate Service s Pvt. Ltd. Vs CI T wherein it is held that if an as sesse e de posits amounts he ld/retained by it as employee ’s contribution to EPF/E SI etc. after due date (i.e., t he date as per the re levant Act) disallowa nce u /s 36(1)(va) wo uld be attracted and provisions o f Se ction 43B whe re the due date is take n of filing of I TR would not come to the re scue of the asse ssee . The decision of Supre me Court is dated 12.10.2022 in Civil Appe al No. 2833 of 2016. He nce, point of law in favour of Depart ment. The re fore, delay s hould be condoned and appeal be allowed and impugned orde r be set aside. No ne appeare d before us on be half of the asse ssee . Findings & Conclusions 5. In the instant cas e, we find that the matte r is on a differe nt footing. The matter is not about e xamining any question of law ITA 469/CHD/2023 A.Y. 2018-19 4 and rathe r, the matte r is where a substantial que stion of law has subsequently be en de cided by the Hon’ble Supre me Cou rt in Checkmate Services (supra) afte r pass ing of the order of the ld CI T(A) and the Re venue has initially decide d not t o file appe al before this Tribu nal due to low tax effe ct following the mandate of the CBD T Instructions/Circu lars and which subs ist as on date , whe ther the subsequent de cision of the Hon’ble Supreme Court forms the re aso nable bas is fo r condonation of delay in filing the present appe al and se eking hearing on merits of the case as t he same is the only re ason which has be en canvas se d by the ld DR before us in terms of e xplaining the de lay in filing the present appeal. 6. In this regard, we refer to CBDT Circular no. 3/2018 date d 11/07/2018 and subse que nt ame ndme nt t o the said Circular vide F. No. 279/Misc. 142/2007-I TJ(Pt) date d 20/08/2018 brou ght to our notice by the ld DR during the cou rse of hearing. I n paragraph 2, it has be en stated that the Bo ard has decide d that the departme ntal appeals ma y be file d on merits be fore the I TA T and othe r higher foru ms ke eping in view the monetary limits and conditions spe cifie d in su bseque nt paragraph. I n paragraph 3, monetary limits have be en spe cifie d and it has be en prov ide d that t he appe als shall not be file d in cases whe re the tax e ffe ct doe sn’t excee d the monetary limits. I t has been clarified that an appeal should not be filed merely because the tax effect in a case ITA 469/CHD/2023 A.Y. 2018-19 5 exce eds the monetary limits pre scribe d and the filing of the appeal is to be de cided on merits of the case . Similarly, in paragraph 5, it has bee n provide d that no appe al shall be file d in respect of an asse ssment year or ye ars in which the tax e ffect is less than the prescribed threshold and appe als c an be file d only with refere nce to the tax e ffe ct in the rele vant asse ssment ye ar. We the refore find that the CBDT ins tructions a re cle ar and unambiguou s that the tax effe ct is critical in the sense that no appeal shall be file d whe re the tax effe ct is be lo w the pre scribe d threshold and even in case s where the tax effect excee ds the prescribed thre shold, the appeal has to be filed bas is the merits of the case and not necessarily in all case s. 7. In paragraph 10, certain spe cific exceptions have been carve d ou t by the CBD T and it has been provide d that notwithstanding the fact tha t the tax e ffect is le ss than the monetary limits or inv olve s no tax effect, the matte r need to be contested on merits and such issue s are a s follows : “10. Adverse judgments 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 Constitutional validity of the provisions of an Act or Rule is under challenge, or (b) Where Board's 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 lo undisclosed foreign assets/ bank accounts.” ITA 469/CHD/2023 A.Y. 2018-19 6 8. The a fore sa id exce ptions have be en expande d s ubsequently vide ame ndment dated 20/08/2018 and the conte nts there of re ad as u nde r: “3. Para 10 of the said Circular provides that adverse judgments relating to the issues enumerated in the said para should be contested on merits notwithstanding that the tax effect entailed is less than the monetary limits specified in para 3 thereof or there is no tax effect Para 10 of the Circular No. 3 of 2018 dated 11.07.2018 is hereby amended as under: "10, Adverse judgments 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 Constitutional validity of the provisions of an Act or Rule is under challenge, or (b) Where Board's 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 addition relates to undisclosed foreign income/undisclosed foreign assets (including financial assets)/ undisclosed foreign bank account. (e) Where addition is based on information received from external sources in the nature of law enforcement agencies such as CBI/ ED/ DRl/ SFIO/ Directorate General of GST Intelligence (DGG1). (f) Cases where prosecution has been filed by the Department and is pending in the Court.” 9. I n paragraph 13, it has bee n provided that this circular will apply t o SLPs/appe als/cro ss objections/re fe rence s to be file d hence forth in SC /HC /Tribunal and it shall apply re trospe ctively to pending SLPs /appeals/C ross objections/re fe rence s and the pending appe als below the specifie d tax limits may be withdrawn/not pre ssed. We therefore find that e ve n whe re the appeals have bee n filed be fore the Hon’ble High Courts and Hon’ble Supre me Court and which ha ve be en admitted as involving s ubs tantial question of law, the CBD T instructions ITA 469/CHD/2023 A.Y. 2018-19 7 prov ide s that su ch ma tte rs should be withdrawn/not pressed and only crite ria for such a de cision is that such mat ters shou ld be involving tax e ffect below the pres cribed limits. 10. In the ins tant c ase , it is an admitted and undispute d position that the tax effect inv olve d in the pre se nt appeal is Rs. 63,769/- we ll be low the prescribed threshold. Furthe r, the matter doe sn’t fall under any of the e xce ptions s o carved out in te rms of the afo resaid CBD T Circular as a mended. 11. In particular, the exceptions so ca rved out doesn’t provide that whe re a substantial question of law has be en de cided by the Hon’ble Supre me Court in a particular case and where the same is applicable in t he facts of t he case of the assesse e, the Re ve nue is at liberty to file an appeal in c ase of the assess ee be fore the Tribunal on merits even though the tax effe ct is below the prescribed limit s. 12. We there fore find that CBD T Circular c ontinues to bind the Re ve nue even afte r the de cision o f the Hon’ble Supreme Cou rt in the case of the Che ckmate Services (Supra) and the refore, the same cannot c ome to the aid of t he Revenue to file the pre se nt appeal muc h less e xplain the subs tantial de lay of 425 days given that the tax effect invo lved is we ll below the pre scribe d thre shold and the matter doe sn’t fall in any of the e xce ptions as so ITA 469/CHD/2023 A.Y. 2018-19 8 prescribed in t he CBD T Circu lar which bind the Re venue authorities. 13. In vie w o f the above facts and circumstance s, the pre se nt appeal filed by the Department is not maintainable and is he reby dismissed. 14. It is he reby clarifie d that the dis missal of the above appe al shall not be take n to be affirmatio n of the orde r of the CI T(A) on me rits and the Reve nue is not preclude d from filing appe al against the dispu ted issue in case of the assesse e for any othe r asse ss ment year(s) where the tax e ffect excee ds the specifie d monetary limits for filing the appeal before this Tribunal. ORDER 15. In the re sult the appeal of the Rev enue is dismisse d. Orde r pronounced on 05.07.2024. Sd/- Sd/- (SHRI KRINWANT SAHAY) ( PARESH M. JOSHI) ACCOUNTANTMEMBER JUDICIAL MEMBER “Poonam” आदेश क琉 灹ितिलिप अ灡ेिषत/ Copy of the order forwarded to : 1. अपीलाथ牸/ The Appellant 2. 灹瀄यथ牸/ The Respondent 3. आयकर आयु猴/ CIT 4. िवभागीय 灹ितिनिध, आयकर अपीलीय आिधकरण, च瀃डीगढ़/ DR, ITAT, CHANDIGARH 5. गाड榁 फाईल/ Guard File आदेशानुसार/ By order, सहायक पंजीकार/ Assistant Registrar