ITO, WARD- 54(3), NEW DELHI V. G SUMAN, NEW DELHI

ITA 5269/DEL/2017

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 3594 (ITAT-DELHI)
• Duration Of Justice: 5 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-02-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2006-2007
• Appeal Filed On: 14-08-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SAMPOORANANAND
• Assessee Lawyers: MANISH SHAR MA
• Keywords: Audit objection; Retrospective amendment; Tax effect
• Section: 12A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHE : SMC : NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER ITA NOS.5264 TO 5268/DEL/2017 A.YRS. 2006-07 TO 2010-11 ITO, WARD 54(3), VS. MRS. LEELAWATHY SOMAN, ROOM NO. 1602, 27, 1 ST FLOOR, SEWA NAGAR MARKET, E-2 BLOCK NEW DELHI 110 003 CIVIC CENTRE, (PAN: ADJPG7654G) NEW DELHI (APPELLANT) (RESPONDENT) AND C.O. NOS. 3 TO 5/DEL/2018 & CO NOS. 212 TO 213/DEL/2017 (ITA NOS.5264 TO 5268/DEL/2017 A.YRS. 2006-07 TO 2010-11 MRS. LEELAWATHY SOMAN VS. ITO, WARD 54(3), 27, 1 ST FLOOR, SEWA NAGAR MARKET, NEW DELHI NEW DELHI 110 003 (PAN: ADJPG7654G) (APPELLANT) (RESPONDENT) AND ITA NOS.5269 TO 5273/DEL/2017 A.YRS. 2006-07 TO 2010-11 ITO, WARD 54(3), VS. G. SOMAN ROOM NO. 1602, IMPERIAL INSTITUTE OF MANAGEMENT SECURITY AND E-2 BLOCK DETECTIVE, CIVIC CENTRE, 27, 1 ST FLOOR, SEWA NAGAR MARKET, NEW DELHI NEW DELHI 110 003 (PAN: APWPS4644H) (APPELLANT) (RESPONDENT) A ND CO NOS. 214 TO 218/DEL/2017 (ITA NOS.5269 TO 5273/DEL/2017 A.YRS. 2006-07 TO 2010-11 G. SOMAN VS. ITO, WARD 54(3), IMPERIAL INSTITUTE OF MANAGEMENT NEW DELHI SECURITY AND DETECTIVE, 27, 1 ST FLOOR, SEWA NAGAR MARKET, NEW DELHI 110 003 (PAN: APWPS4644H ) (APPELLANT) (RESPONDENT) 2 DEPARTMENT BY : SH. SAMPOORANANAND, SR. DR ASSESSEE BY : SH. GAURAV JAIN & MS. MANISH SHAR MA, ADV. ORDER THESE APPEALS BY THE REVENUE AND CROSS OBJECTIONS B Y TWO DIFFERENT ASSESSEES ARISE OUT OF THE ORDERS PASSED BY THE CSI T(A) IN RELATION TO THE CAPTIONED ASSESSMENT YEARS. 2. AT THE TIME OF HEARING, LD. COUNSEL OF THE ASSES SEE HAS FILED A CHART IN RESPECT OF ALL THE APPEALS SHOWING THEREIN THAT TH E TAX EFFECT IN ALL THE REVENUES APPEALS IS LESS THAN RS. 10 LACS AS PRES CRIBED BY THE CBDT, HENCE, HE REQUESTED THAT ALL THE APPEALS FILED BY THE REV ENUE MAY BE DISMISSED. HOWEVER, LD. DR RELIED UPON THE ORDERS OF THE AO, B UT COULD NOT CONTROVERT THE CONTENTIONS RAISED BY THE LD. COUNSEL OF THE ASSESS EE. 3. I HAVE HEARD BOTH THE PARTIES AND PERUSED THE RE CORDS, ESPECIALLY THE CHART SUBMITTED BY THE LD. COUNSEL OF THE ASSESSEE AND TH E IMPUGNED ORDERS. IT IS NOTICED THAT SECTION 268A HAS BEEN INSERTED BY THE FINANCE ACT, 2008 WITH RETROSPECTIVE EFFECT FROM 01.04.1999, READING AS UN DER: 268A. (1) THE BOARD MAY, FROM TIME TO TIME, ISSUE ORDERS, INSTRUCTIONS OR DIRECTIONS TO OTHER INCOME-TAX AUTH ORITIES, FIXING SUCH MONETARY LIMITS AS IT MAY DEEM FIT, FOR THE PU RPOSE OF REGULATING FILING OF APPEAL OR APPLICATION FOR REFE RENCE BY ANY INCOME-TAX AUTHORITY UNDER THE PROVISIONS OF THIS C HAPTER. (2) WHERE, IN PURSUANCE OF THE ORDERS, INSTRUCTIONS OR DIRECTIONS ISSUED UNDER SUB-SECTION (1), AN INCOME-TAX AUTHORI TY HAS NOT FILED ANY APPEAL OR APPLICATION FOR REFERENCE ON ANY ISSU E IN THE CASE OF AN ASSESSEE FOR ANY ASSESSMENT YEAR, IT SHALL NOT P RECLUDE 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 AS SESSMENT YEAR. 3 (3) NOTWITHSTANDING THAT NO APPEAL OR APPLICATION F OR REFERENCE HAS BEEN FILED BY AN INCOME-TAX AUTHORITY PURSUANT TO T HE ORDERS OR INSTRUCTIONS OR DIRECTIONS ISSUED UNDER SUB-SECTION (1), IT SHALL NOT BE LAWFUL FOR AN ASSESSEE, BEING A PARTY IN ANY APP EAL OR REFERENCE, TO CONTEND THAT THE INCOME-TAX AUTHORITY HAS ACQUIE SCED IN THE DECISION ON THE DISPUTED ISSUE BY NOT FILING AN APP EAL OR APPLICATION FOR REFERENCE IN ANY CASE. (4) THE APPELLATE TRIBUNAL OR COURT, HEARING SUCH A PPEAL OR REFERENCE, SHALL HAVE REGARD TO THE ORDERS, INSTRUC TIONS OR DIRECTIONS ISSUED UNDER SUB-SECTION (1) AND THE CIR CUMSTANCES UNDER WHICH SUCH APPEAL OR APPLICATION FOR REFERENCE WAS FILED OR NOT 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 APPE AL OR APPLICATION FOR REFERENCE SHALL BE DEEMED TO HAVE BEEN ISSUED U NDER SUB-SECTION (1) AND THE PROVISIONS OF SUB-SECTIONS (2), (3) AND (4) SHALL APPLY ACCORDINGLY.] 4. PURSUANT TO THE MANDATE OF SECTION 268A, THE CBD T HAS ISSUED CIRCULAR NO. 21 OF 2015 DATED 10.12.2015, REVISING THE MONET ARY LIMIT TO RS.10,00,000/- FOR NOT FILING APPEALS BEFORE THE TRIBUNAL. THE SAI D CIRCULAR READ AS UNDER: SUBJECT : REVISION OF MONETARY LIMITS FOR FI LING OF APPEALS BY THE DEPARTMENT BEFORE INCOME TAX APPELLATE TRIBUNAL A ND HIGH COURTS AND SLP BEFORE SUPREME COURT MEASURES FOR REDUCIN G LITIGATION REG. REFERENCE IS INVITED TO BOARDS INSTRUCTION NO 5/20 14 DATED 10.07.2014 WHEREIN MONETARY LIMITS AND OTHER CONDIT IONS FOR FILING DEPARTMENTAL APPEALS (IN INCOME-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 AND HIGH COURTS AND SLP BEFORE T HE 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 GIVE N HEREUNDER: 4 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 LIMIT S 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 DIFFERE NCE BETWEEN THE TAX ON THE TOTAL INCOME ASSESSED AND THE TAX THAT W OULD HAVE BEEN CHARGEABLE HAD SUCH TOTAL INCOME BEEN REDUCED BY TH E 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 INCLUDE 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 B E THE TAX EFFECT. IN CASES WHERE RETURNED LOSS IS REDUCED OR ASSESSED AS INCOME, THE TAX EFFECT WOULD INCLUDE NOTIONAL TAX ON DISPUTED ADDIT IONS. 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 EF FECT SEPARATELY FOR EVERY ASSESSMENT YEAR IN RESPECT OF THE DISPUTE D 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 E FFECT IN RESPECT OF THE DISPUTED ISSUES EXCEEDS THE MONETARY LIMIT SPEC IFIED IN PARA 3. NO APPEAL SHALL BE FILED IN RESPECT OF AN ASSESSMENT Y EAR OR YEARS IN WHICH THE TAX EFFECT IS LESS THAN THE MONETARY LIMIT SPEC IFIED 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 ORDER OF ANY HIGH COURT OR APPELLATE AUTH ORITY, WHICH INVOLVES MORE THAN ONE ASSESSMENT YEAR AND COMMON I SSUES IN MORE THAN ONE ASSESSMENT YEAR, APPEAL SHALL BE FILED IN RESPECT OF ALL SUCH ASSESSMENT YEARS EVEN IF THE TAX EFFECT IS LESS T HAN THE PRESCRIBED MONETARY LIMITS IN ANY OF THE YEAR(S), IF IT IS DEC IDED TO FILE APPEAL IN RESPECT OF THE YEAR(S) IN WHICH TAX EFFECT EXCEED S THE MONETARY LIMIT 5 PRESCRIBED. IN CASE WHERE A COMPOSITE ORDER/ JUDGEM ENT INVOLVES MORE THAN ONE ASSESSEE, EACH ASSESSEE SHALL BE DEALT WIT H SEPARATELY. 6. IN A CASE WHERE APPEAL BEFORE A TRIBUNAL OR A CO URT IS NOT FILED ONLY ON ACCOUNT OF THE TAX EFFECT BEING LESS THAN T HE MONETARY LIMIT SPECIFIED ABOVE, THE COMMISSIONER OF INCOME-TAX SHA LL SPECIFICALLY RECORD THAT EVEN THOUGH THE DECISION IS NOT ACCEPT ABLE, APPEAL IS NOT BEING FILED ONLY ON THE CONSIDERATION THAT THE TAX EFFECT IS LESS THAN THE MONETARY LIMIT SPECIFIED IN THIS INSTRUCTION. FURT HER, IN SUCH CASES, THERE WILL BE NO PRESUMPTION THAT THE INCOME-TAX DE PARTMENT HAS ACQUIESCED IN THE DECISION ON THE DISPUTED ISSUES. THE INCOME-TAX DEPARTMENT SHALL NOT BE PRECLUDED FROM FILING AN AP PEAL AGAINST THE DISPUTED ISSUES IN THE CASE OF THE SAME ASSESSEE FO R ANY OTHER ASSESSMENT YEAR, OR IN THE CASE OF ANY OTHER ASSESS EE FOR THE SAME OR ANY OTHER ASSESSMENT YEAR, IF THE TAX EFFECT EXCEED S THE SPECIFIED MONETARY LIMITS. 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 IM PLICITLY ACCEPTED THE DECISION OF THE TRIBUNAL OR COURT IN THE CASE O F THE ASSESSEE FOR ANY OTHER ASSESSMENT YEAR OR IN THE CASE OF ANY OTHER A SSESSEE FOR THE SAME OR ANY OTHER ASSESSMENT YEAR, BY NOT FILING AN APPE AL ON THE SAME DISPUTED ISSUES. THE DEPARTMENTAL REPRESENTATIVES/C OUNSELS MUST MAKE EVERY EFFORT TO BRING TO THE NOTICE OF THE TRIBUNAL OR THE COURT THAT THE APPEAL IN SUCH CASES WAS NOT FILED OR NOT ADMITTED ONLY FOR THE REASON OF THE TAX EFFECT BEING LESS THAN THE SPECIFIED MON ETARY LIMIT AND, THEREFORE, NO INFERENCE SHOULD BE DRAWN THAT THE DE CISIONS RENDERED THEREIN WERE ACCEPTABLE TO THE DEPARTMENT. ACCORDIN GLY, THEY SHOULD IMPRESS UPON THE TRIBUNAL OR THE COURT THAT SUCH CA SES 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 MUST BE MAINTAINED IN A SYSTEMIC MANNER FOR EASY RETRIEVAL. 8. ADVERSE JUDGMENTS RELATING TO THE FOLLOWING ISSU ES SHOULD BE CONTESTED ON MERITS NOTWITHSTANDING THAT THE TAX EFFECT ENTAILED IS LESS THAN THE MONETARY LIMITS SPECIFIED IN PARA 3 A BOVE OR THERE IS NO TAX EFFECT: (A) WHERE THE CONSTITUTIONAL VALIDITY OF THE PROVISIONS OF AN ACT OR RULE ARE UNDER CHALLENGE, OR 6 (B) WHERE BOARDS ORDER, NOTIFICATION, INSTRUCTION OR C IRCULAR 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 A SSETS/ BANK ACCOUNTS. 9. THE MONETARY LIMITS SPECIFIED IN PARA 3 ABOVE SH ALL NOT APPLY TO WRIT MATTERS AND DIRECT TAX MATTERS OTHER THAN INCO ME 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 EFFECT IS NOT QUANTIFI ABLE OR NOT INVOLVED, SUCH AS THE CASE OF REGISTRATION OF TRUSTS OR INSTI TUTIONS UNDER SECTION 12A OF THE IT ACT, 1961, SHALL NOT BE GOVERNED BY T HE LIMITS SPECIFIED IN PARA 3 ABOVE AND DECISION TO FILE APPEAL IN SUCH C ASES 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 AB OVE MAY BE WITHDRAWN/ NOT PRESSED. APPEALS BEFORE THE SUPREME COURT WILL BE GOVERNED BY THE INSTRUCTIONS ON THIS SUBJECT, OPERA TIVE AT THE TIME WHEN SUCH APPEAL WAS FILED. 11. THIS ISSUES UNDER SECTION 268A (1) OF THE INCOM E-TAX ACT 1961. 5. FROM PARA 10 OF THE ABOVE CIRCULAR IT IS PALPABL E THAT THESE INSTRUCTIONS ARE APPLICABLE TO THE PENDING APPEALS ALSO AND THER E IS A CLEAR CUT INSTRUCTION TO THE DEPARTMENT TO WITHDRAW OR NOT PRESS SUCH APPEAL S FILED BEFORE THE ITAT WHEREIN TAX EFFECT IS LESS THAN RS.10,00,000/-. THE SE INSTRUCTIONS ARE OPERATIVE RETROSPECTIVELY TO THE PENDING APPEALS ALSO. 6. IT GOES WITHOUT SAYING THAT THE BOARDS INSTRUCT IONS OR DIRECTIONS ISSUED TO THE INCOME-TAX AUTHORITIES ARE BINDING ON THEM. GOI NG BY THE PRESCRIPTION OF THE AFORENOTED CIRCULAR, WE ARE OF THE VIEW THAT THE RE VENUE SHOULD HAVE EITHER NOT FILED THE INSTANT APPEALS BEFORE THE TRIBUNAL OR WI THDRAWN THE SAME AS THE TAX EFFECT IN EACH OF SUCH APPEALS IS LESS THAN THE PRE SCRIBED LIMIT FOR NOT FILING THE APPEALS. 7 7. KEEPING IN VIEW THE ABOVE CIRCULAR AND THE PROVI SIONS OF SECTION 268A OF INCOME-TAX ACT, 1961, AND WITHOUT GOING INTO MERITS OF THE CASES, WE DISMISS ALL THE APPEALS FILED BY THE REVENUE AS TAX EFFECT IN E ACH OF THESE APPEALS IS LESS THAN RS.10.00 LAC. HOWEVER, THE DEPARTMENT IS AT LI BERTY TO FILE THE MISCELLANEOUS APPLICATION, IF THE TAX EFFECT IS MOR E THAN THE PRESCRIBED LIMITED OF RS. 10 LACS, OR OTHERWISE. THE CROSS OBJECTION S FILED BY THE ASSESSEE, WHICH ARE IN SUPPORT OF THE RESPECTIVE IMPUGNED ORDERS, A RE ALSO DISMISSED AS INFRUCTUOUS. 8. IN THE RESULT, ALL APPEALS OF THE REVENUE AND CR OSS OBJECTIONS OF THE ASSESSEES STAND DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 01/02/2018. SD/- [H.S. SIDHU] JUDICIAL MEMBER DATED 01/02/2018. SRBHATNAGAR COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT AR, ITAT, NEW DELHI.