DEPUTY COMMISSIONER OF INCOME TAX CIRCLE-1, BATHINDA V. SHRIMATI ANU ANKIT JAIN, BATHINDA

ITA 502/ASR/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 6932 (ITAT-AMRITSAR)
• Duration Of Justice: 6 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-02-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2016-2017
• Appeal Filed On: 25-07-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Audit objection; Additional evidence; Tax effect
• Section: 201; 268A; 13; 20

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH AMRITSAR BEFORE SHRI L.P. SAHU, AM & SHRI RAVISH SOOD, JM . / ITA NO. 502 / ASR /201 9 ( / ASSESSMENT YEAR : 20 1 6 - 201 7 ) DCIT, C IRCLE - 1, BHATIN DA VS. SMT. ANU ANKIT JAIN, AMRIK SINGH ROAD, AGGARSAIN NAGAR, BHATINDA ./ PANNO. : A FOPG 6885 L ( / APPELLANT ) .. ( / RESPONDENT ) /REVENUE BY : SHRI CHARAN DASS , DR /ASSESSEE BY : N ONE / DATE OF HEARING : 0 4 / 02 /20 20 / DATE OF PRONOUNCEMENT : 04 / 02 /20 20 / O R D E R PER L.P.SAHU, AM : THE REVENUE HAS FILED THIS APPEAL AGAINST THE ORDER OF CIT(A), BATHINDA , DATED 30.05.2019 FOR THE ASSESSMENT YEA R 201 6 - 201 7 . 2. A T THE OUTSET, ON PERUSAL OF THE GROUNDS OF APPEAL FILED BY THE ASSESSEE, WE FOUND THAT THE REVENUE HAS RAISED AN ISSUE IN GROUND NO.(III) WITH REGARD TO VIOLATION OF RULE 46A OF I.T. RULES, 1962. HOWEVER, DURING THE COURSE OF HEARING, LD. DR COULD NOT POINT OUT THAT ANY ADDITIONAL EVIDENCE HAS BEEN ACCEPTED BY THE CIT(A) AT APPELLATE STAGE VIOLATING THE RULE 46A OF THE RULES, 1962. FURTHER WE FOUND THAT THE TAX EFFECT IN THE PRESENT APPEAL OF THE REVENUE IS LESS THAN RS.50 LAKHS AND, THEREF ORE, IN VIEW OF CBDT CIRCULAR NO.17/2019 DATED 8 TH AUGUST, 2019, THE APPEAL OF THE REVENUE IS NOT MAINTAINABLE. 3 . LD. DR ALSO FAIRLY CONCEDED THAT NO DOUB T THE TAX EFFECT INVOLVED IN THIS APPEAL IS LESS THAN RS.50 LAKHS, THUS, BOUND BY THE DEPARTMENTAL I NSTRUCTION, HOWEVER, LD. DR DREW OUR ATTENTION TO PARA 10 OF THE ITA NO. 502 / ASR /201 9 2 CIRCULAR NO.3/2018, DATED 11 TH JULY, 2018, WHICH HAS BEEN MODIFIED BY CIRCULAR DATED 20 TH AUGUST, 2018 AND IN TERMS OF SAID MODIFICATION, THE DEPARTMENTAL REPRESENTATIVES MADE A PRAYER THAT P ERMISSION TO PRAY FOR RECALL OF THE ORDER MAY BE GRANTED IN CASE ANY OF THE CONDITIONS IN THE REPORTS MADE AVAILABLE BY THE AO SUBSEQUENTLY SHOW THAT THE ISSUES WERE REQUIRED TO BE CONTESTED. THE MODIFIED PARA IS EXTRACTED HEREUNDER: 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 A N 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 RE LATES 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/DRI/SFIO/ DIRECTORATE GENERAL OF GST INTELLIGENCE (DGGI). (F) CASES WHERE PROSECUTION HAS BEEN FILED BY THE DEPARTMENT AND IS PENDING IN THE COURT. 4 . EARLIER IN CIRCULAR NO.3/2018, DATED 11 TH JULY, 2018, IT HAS BEEN DECIDED BY THE CBDT THAT DEPARTM ENTAL APPEALS MAY BE FILED ON MERITS BEFORE INCOME TAX APPELLATE TRIBUNAL AND HIGH COURTS AND SLPS/APPEALS BEFORE SUPREME COURT KEEPING IN VIEW THE MONETARY LIMITS AND CONDITIONS SPECIFIED BELOW. HENCEFORTH, APPEALS/SLPS SHALL NOT BE FILED IN CASES WHERE T HE TAX EFFECT DOES NOT EXCEED THE MONETARY LIMITS GIVEN HEREUNDER: S. NO . APPEALS/SLPS IN INCOME - TAX MATTERS MONETARY LIMIT (RS.) 1. BEFORE APPELLATE TRIBUNAL 20,00,000 2. BEFORE HIGH COURT 50,00,000 3. BEFORE SUPREME COURT 1,00,00,000 ITA NO. 502 / ASR /201 9 3 5 . FURTHER, TH E CBDT AMENDED THE ABOVE CIRCULAR VIDE CIRCULAR NO.17/2019, DATED 8 TH AUGUST , 2019, WHEREBY ENHANCING THE MONETARY LIMITS FOR FILING OF APPEALS BY THE DEPARTMENT BEFORE THE INCOME TAX APPELLATE TRIBUNALS, HIGH COURTS AND SLPS/APPEALS BEFORE THE SUPREME COU RT AS UNDER : - S. NO . APPEALS/SLPS IN INCOME - TAX MATTERS MONETARY LIMIT (RS.) 1. BEFORE APPELLATE TRIBUNAL 50,00,000 2. BEFORE HIGH COURT 1,00,00,000 3. BEFORE SUPREME COURT 2,00,00,000 6 . GOING BY THE PRESCRIPTION OF AMENDED CIRCULAR NO. 17/2019, D ATED 8 TH AUGUST, 2019, WE ARE OF THE VIEW THAT THE REVENUE SHOULD HAVE EITHER NOT FILED THE INSTANT APPEAL BEFORE THE TRIBUNAL OR WITHDRAWN THE SAME AS THE TAX EFFECT IN THE APPEAL IS ADMITTEDLY LESS THAN THE PRESCRIBED LIMIT, I.E., RS. 50,00,000/ - FOR NO T FILING THE APPEAL, WHICH IS NOT MAINTAINABLE AS PER THE PROVISIONS OF SECTION 268A OF THE INCOME TAX ACT, 1961. 7 . THE COORDINATE BENCH OF THE TRIBUNAL IN ITA NO.1398/AHD/2004, ORDER DATED 14.08.2009 HAS DISMISSED THE APPEALS FILED BY THE REVENUE BELOW THE MONETARY LIMIT OF RS.50,00,000/ - AS PRESCRIBED BY THE CBDT VIDE CIRCULAR NO.17/2019, DATED 8 TH AUGUST, 2019. THE RELEVANT OBSERVATIONS OF THE TRIBUNAL ARE AS UNDER : - 5. HAVING CONSIDERED THE RIVAL SUBMISSIONS AND HAVING PERUSED THE MATERIAL ON RECOR D, WE DO NOT HAVE SLIGHTEST OF HESITATION IN HOLDING THAT THE CONCESSION EXTENDED BY THE CBDT NOT ONLY APPLIES TO THE APPEALS TO BE FILED IN FUTURE BUT IT IS ALSO EQUALLY APPLICABLE TO THE APPEALS PENDING FOR DISPOSAL AS ON NOW. OUR LINE OF RE ASONING IS THIS. THE CIRCULAR DATED 8 TH AUGUST 2019 IS NOT A STANDALONE CIRCULAR. IT IS TO BE READ IN CONJUNCTION WITH THE CBDT CIRCULAR NO 3 OF 2018 (AND SUBSEQUENT AMENDMENT THERETO), AND ALL IT DOES IS TO REPLACE PARAGRAPH NOS. 3 AND 5 OF THE SAID CIRCULAR. THIS IS EVIDENT FROM THE FOLLOWING EXTRACTS FROM THE CIRCULAR DATED 8 TH AUGUST 2019: ITA NO. 502 / ASR /201 9 4 2. AS A STEP TOWARDS FURTHER MANAGEMENT OF LITIGATION. IT HAS BEEN DECIDED BY THE BOARD THAT MONETARY LIMITS FOR FILING OF APPEALS IN INCOME - TAX CASES BE ENH ANCED FURTHER THROUGH AMENDMENT IN PARA 3 OF THE CIRCULAR MENTIONED ABOVE AND ACCORDINGLY. THE TABLE FOR MONETARY LIMITS SPECIFIED IN PARA 3 OF THE CIRCULAR SHALL READ AS FOLLOWS: S.NO . APPEALS/SLPS IN INCOME - TAX MATTERS MONETARY LIMIT (RS.) 1. BEFORE APPELLATE TRIBUNAL 50,00,000 2. BEFORE HIGH COURT 1,00,00,000 3. BEFORE SUPREME COURT 2,00,00,000 3. FURTHER, WITH A VIEW TO PROVIDE PARITY IN FILING OF APPEALS IN SCENARIOS WHERE SEPARATE ORDER IS PASSED BY HIGHER APPELLATE AUTHORITIES FOR EAC H ASSESSMENT YEAR VIS - A - VIS WHERE 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 I N 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 RESPE CT OF THE DISPUTEDISSUES 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 MONETA RY LIMIT SPECIFIED IN PARA 3. IN CASE WHERE A COMPOSITE ORDER/ JUDGEMENT INVOLVES MORE THAN ONE ASSESSEE, EACH ASSESSEE SHALL BE DEALT WITH SEPARATELY 4. THE SAID MODIFICATIONS SHALL COME INTO EFFECT FROM THE DATE OF ISSUE OF THIS CIRCULAR. 6. CLEA RLY, ALL OTHER PORTIONS OF THE CIRCULAR NO. 3 OF 2018 (SUPRA) HAVE REMAINED INTACT. THE PORTION WHICH HAS REMAINED INTACT INCLUDES PARAGRAPH 13 OF THE AFORESAID CIRCULAR WHICH IS AS FOLLOWS: 13.THIS CIRCULAR WILL APPLY TO SLPS/ APPEALS/ CROSS OBJECTIONS/R EFERENCES TO BE FILED HENCEFORTH IN SC/HCS/TRIBUNAL AND IT SHALL ALSO APPLY RETROSPECTIVELY ITA NO. 502 / ASR /201 9 5 TO PENDING SLPS/ APPEALS/ CROSS OBJECTIONS/REFERENCES. PENDING APPEALS BELOW THE SPECIFIED TAX LIMITS IN PARE 3 ABOVE MAY BE WITHDRAWN/ NOT PRESSED. 7. IN VIEW OF THE ABOVE DISCUSSIONS, WE HEREBY HOLD THAT THE RELAXATION IN MONETARY LIMITS FOR DEPARTMENTAL APPEALS, VIDE CBDT CIRCULAR DATED 8 TH AUGUST 2019 (SUPRA) SHALL BE APPLICABLE TO THE PENDING APPEALS IN ADDITION TO THE APPEALS TO BE FILED HENCEFORTH. 8. LEARNED COMMISSIONER (DR) THEN SUBMITS LIBERTY MAY KINDLY BE GIVEN TO POINT OUT, UPON NECESSARY FURTHER VERIFICATIONS, AND TO SEEK RECALL THE DISMISSAL OF APPEALS AND RESTORATION OF THE APPEALS IN THE CASES (I) IN WHICH IT CAN BE DEMONSTRATED THAT TH E APPEALS ARE COVERED BY THE EXCEPTIONS, AND (II) WHICH ARE INADVERTENTLY INCLUDED IN THIS BUNCH OF APPEALS, WHEREIN THE TAX EFFECT, IN TERMS OF THE CBDT CIRCULAR (SUPRA), EXCEEDS RS 50,00,000. NONE OPPOSES THIS PRAYER; WE ACCEPT THE SAME. WE MAKE IT CLEAR THAT THE APPELLANTS SHALL BE AT LIBERTY TO POINT OUT THE CASES WHICH ARE WRONGLY INCLUDED IN THE APPEALS SO SUMMARILY DISMISSED, EITHER OWING TO WRONG COMPUTATION OF TAX EFFECT OR OWNING TO SUCH CASES BEING COVERED BY THE PERMISSIBLE EXCE PTIONS - OR FOR ANY OTHER REASON, AND WE WILL TAKE APPROPRIATE REMEDIAL STEPS IN THIS REGARD. 9. IN THE LIGHT OF THE ABOVE DISCUSSIONS, ALL THE APPEALS STAND DISMISSED AS WITHDRAWN. AS THE APPEALS FILED BY THE REVENUE ARE FOUND TO BE NON - MAINTAINABLE AND AS ALL THE RELATED CROSS - OBJECTIONS OF THE ASSESSEE ARISE ONLY AS A RESULT OF THOSE APPEALS AND MERELY SUPPORT THE ORDER OF THE CIT(A), THE CROSS OBJECTIONS FILED BY THE ASSESSEE ARE ALSO DISMISSED AS INFRUCTUOUS. ORDERED, ACCORDINGLY. 8 . LD D.R. SU BMITTED THAT AS PER PARA 4 OF CBDT CIRCULAR NO.17/2019 DATED 8 TH AUGUST, 2019, THE MODIFICATIONS SHALL COME INTO EFFECT FROM THE DATE OF THIS ISSUE OF THIS CIRCULAR I.E. 8.8.2019. THEREFORE, IT IS NOT APPLICABLE TO THE PENDING APPEALS. 9 . AFTER CONSIDERI NG THE SUBMISSION OF LD D.R. AND KEEPING IN VIEW THE ORDER DATED 14.8.2019 OF THE ITAT AHMEDABAD BENCH IN THE CASE OF DINESH MUDHAVLAL PATEL (SUPRA), WE ARE OF THE VIEW THAT THE RELAXATION IN THE MONETARY LIMIT IN DEPARTMENTAL APPEALS VIDE CIRCULAR DATED 8 TH AUGUST, 2019 SHALL BE APPLICABLE TO THE PENDING APPEALS IN ADDITION TO THE APPEALS TO BE FILED HENCEFORTH. THUS, THE CONTENTION OF LD D.R. IS DISMISSED. ITA NO. 502 / ASR /201 9 6 10 . ACCORDINGLY, WE DISMISS THE APPEAL FILED BY THE REVENUE WITHOUT GOING INTO MERITS OF THE CASE. HOWEVER, IT IS MADE CLEAR THAT THE DEPARTMENT IS AT LIBERTY TO FILE MISCELLANEOUS APPLICATION, IF THE TAX EFFECT IS FOUND TO BE MORE THAN THE PRESCRIBED LIMIT OF RS.50,00,000/ - AS PER THE AMENDMENT CARRIED OUT BY THE CBDT IN CIRCULAR NO.17/2019, DATED 8 TH AUGUST, 2019, OR ANY OF THE CONDITIONS ETC. AS AVAILABLE IN THE AMENDED PARA 10 OF CIRCULAR NO.3/2018, DATED 20 TH AUGUST, 2018. ACCORDINGLY, THE APPEAL OF THE REVENUE DESERVES TO BE DISMISSED. 11 . IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 04 / 02 /20 20 . SD/ - ( RAVISH SOOD ) S D/ - (L.P.SAHU) / JUDICIAL MEMBER / ACCOUNTANT MEMBER / AMRITSAR ; DATED 04 / 02 /20 20 PRAKASH KUMAR MISHRA, SR.P.S. / COPY OF THE ORDER FORWARDED TO : / BY ORDER, ( SENIOR PRIVATE SECRETARY ) ITAT AMRITSAR BENCH, AMRITSAR 1. / THE APPELLANT - DCIT, CIRCLE - 1, BHATINDA 2. / THE RESPONDENT - SMT. ANU ANKIT JAIN, AMRIK SINGH ROAD, AGGARSAIN NAGAR, BHATINDA 3. ( ) / THE CIT(A), 4. / CIT 5. , , / DR, ITAT, AMRITSAR 6. / GUARD FILE. //TRUE COPY//