ACIT, V. M/s Shyam Bihari,

ITA 53/PAT/2013

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 7764 (ITAT-PATNA)
• Duration Of Justice: 4 year(s) 6 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-10-2017
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2008-2009
• Appeal Filed On: 30-03-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SANJAY MALLIK
• Assessee Lawyers: SANJEEV KR ANWAR
• Keywords: Audit objection; Tax effect

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PATNA BENCH: PATNA [BEFORE SHRI WSEEM AHMED , A M & SHRI K. NAR A SIMHA . CHARY ,J M ] ITA NO. 5 3 /PAT/201 3 ASSESSMENT YEARS: 200 8 - 09 ACIT VS. M/S SHYAM BIHARI , CIRCLE - 2 , BHAGWANPUR, MUZAFFARPUR. MUZAFFARPUR DEPARTMENT BY : SHRI SANJAY MALLIK , DR . ASSESSEE BY : SHRI SANJEEV KR. ANWAR . DATE OF HEARING: 2 2 . 1 1 .201 6 DATE OF PRONOUNCEMENT: 22 . 1 1 .201 6 ORDER PER BENCH TH IS APPEAL OF THE REVENUE IS AGAINST THE ORDER DATED 06 .12.2012 IN APPEAL NO.1 12 / MUZ/ 201 0 - 1 1 BY THE COMMISSIONER OF INCOME - TAX (APPEALS) DHANBAD CAMP OFFICE PATNA OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT). 2. AT THE OUTSET, LD. AR BROUGHT TO OUR NOTIC E THAT THE TAX EFFECT IN THIS MATTER IS ONLY RS.9 ,47 , 040 / - . I T IS SEEN THAT THE TAX EFFECT ON THE DISPUTED ADDITION BEFORE US IS LESS THAN RS. 10 LACS , AS PRESENTED IN THE CIRCULAR DT.10.12.2015, ISSUED BY THE CBDT, THE RELEVANT PORTIONS OF WHGICH IS AS F OLLOWS: 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 H IGH COURT 20,00,000/ - 3 BEFORE SUPREME COURT 25,00,000/ - 2 2 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 ME RITS OF THE CASE. 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 W HICH APPEAL 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 CHARGEABILITY OF INTEREST IS THE ISSUE U NDER 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 FI LED IN RESPECT OF AN ASSESSMENT 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, I N CASE OF A 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, 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 ASSE SSEE, 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 CONSTITUTIONAL 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. 3 3 10. THIS INSTRUCTION WILL APPLY RETROSPECTIVELY TO PENDING APPEALS AND APPEALS TO BE FILED HENCEFO RTH 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 WA S FILED. 4. WE FIND THAT INTENTION BEHIND THE CIRCULAR NO.21/2015 DATED 10 - 12 - 2015 NEEDS TO BE UNDERSTOOD IN THE FOLLOWING PERSPECTIVE: - BY PASSAGE OF TIME, THE MONEY VALUE HAS GONE DOWN, THE COST OF LITIGATION EXPENSES HAS GONE UP, NUMBER OF ASSESSES ON THE FILES OF THE DEPARTMENT HAVE BEEN INCREASED AND CONSEQUENTLY, THE BURDEN ON THE DEPARTMENT IS ALSO INCREASED TO A TREMENDOUS EXTENT. THE CORRIDORS OF THE SUPERIOR COURTS ARE CHOKED WITH HUGE PENDENCY OF CASES. IN THIS VIEW OF THE MATTER, THE CBDT HAS RIGHTLY TAKEN A DECISION TO REVISE THE MONETARY LIMITS IN TUNE WITH THE PRESENT VALUE OF MONEY AND WITH A VIEW TO REDUCE THE LITIGATION AND OFFERING RELIEF TO SMALL TAX PAYERS. THIS IS ALSO IN VIEW OF THE FACT THAT TIME AND ENERGY OF THE DEPARTMENT CO ULD BE USED MORE PRODUCTIVELY AND EFFICIENTLY TO CATCH HOLD OF BIG FISHES, WHO IN TURN WOULD CONTRIBUTE MORE TO THE DEVELOPMENT OF THE COUNTRY. 5. ON PERUSAL OF THE CIRCULAR NO. 21 / 2015 DATED 10.12.2015 AND THE MATERIALS AVAILABLE ON RECORD, WE COULD NOT SEE WHETHER THE IMPUGNED CASE FALLS UNDER ANY OF THE EXCEPTIONS CONTEMPLATED IN THE SAID CIRCULAR. WE ALSO FIND THAT THE CIRCULAR MAKES IT VERY CLEAR THAT THE REVISED MONETARY LIMITS SHALL APPLY RETROSPECTIVELY TO PENDING APPEALS ALSO. WE FIND THAT TH E CIRCULAR IS BINDING ON THE TAX AUTHORITIES. THIS POSITION HAS BEEN CONFIRMED BY THE HONBLE APEX COURT IN THE CASE OF COMMISSIONER OF CUSTOMS VS INDIAN OIL CORPORATION LTD REPORTED IN 267 ITR 272 (SC) WHEREIN THEIR LORDSHIPS EXAMINED THE EARLIER DECISION S OF THE APEX COURT WITH REGARD TO BINDING NATURE OF THE CIRCULARS AND LAID DOWN THAT WHEN A CIRCULAR ISSUED BY THE BOARD REMAINS 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, THESE BEING A LOW TAX EFFECT CASE, WE DISMISS ALL THE APPEALS OF REVENUE IN LIMINE, AS UNADMITTED, WITHOUT GOING INTO THE MERITS OF THE CASE. 4 4 6. SINCE REVENUE APPEAL IN ITA NO. 53 / PAT /201 3 IS DISMISSED AS UNADMITTED . HOWEVER, ASSESSEE CAN FILE APPEAL AGAINST THE RETAINED ADDITION AS PER THE PROVISIONS OF LAW. 7 . IN THE RESULT , THE APPEAL OF THE REVENUE IS DISMISSED . ORDER PRONOUNCED IN THE OPEN COURT ON 22 ND NOVEMBER, 2016 . SD/ - SD/ - ( K. NAR A SIMHA CHARY ) ( WASEEM AHMED ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 22 ND NOVEMBER , 201 6 S. SINHA, P.S COPY OF THE ORDER FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT(A) , PATNA 4. CIT , PATNA 5. DR, PATNA BENCHES, PATNA / TRUE COPY, BY ORDER, PRIVATE SECRETARY .