ITO, New Delhi V. M/s Chemex India Pvt. Ltd., New Delhi

ITA 5464/DEL/2010

• Counselvise Citation: [2015] 120 COUNSELVISE.COM (IT) 9948 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 4 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-04-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 01-04-2015
• Assessment Year: 2001-2002
• Appeal Filed On: 03-12-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PARWINDER KAUR
• Keywords: Retrospective amendment; Tax effect
• Section: 147; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH B , NEW DELHI) BEFORE SMT. DIVA SINGH, JUDICIAL MEMBER AND SHRI T.S. KAPOOR, ACCOUNTANT MEMBER I.T.A. NO.5464 /DEL/2010 ASSESSMENT YEAR : 2001-02 ITO, WARD 3(3), VS. M/S. CHEMEX INDIA PVT. LTD., NEW DELHI C-392, SECTOR 1, AVANTIKA, ROHINI, NEW DELHI. GIR / PAN: C.O.NO.32/DEL/2011 (ASSESSMENT YEAR 2001-02) M/S. CHEMEX INDIA PVT. LTD., VS. ITO, WARD 3(3), C-392, SECTOR 1, AVANTIKA, NEW DELHI ROHINI, NEW DELHI. (APPELLANT) (RESPONDENT) APPELLANT BY : SMT. PARWINDER KAUR, SR. DR RESPONDENT BY : SHRI VISHAL AGARWAL, SHRI DEEPAK OSTWAL, CA DATE OF HEARING : 01.04.2015 DATE OF PRONOUNCEMENT : 10.04.2015 ORDER PER T.S. KAPOOR, AM: THIS IS AN APPEAL FILED BY REVENUE AGAINST THE ORD ER OF LD. CIT(A) VI, NEW DELHI DATED 21.09.2010 FOR ASSESSMENT YEAR 2001 -02. THE REVENUE HAS RAISED FOLLOWING GROUNDS OF APPEAL: LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN DELETI NG ADDITION OF RS.10,00,000/- MADE BY THE A.O. U/S 68 OF THE I. T. ACT, 1961 IGNORING THE FACT THAT EVEN IF PAPER IDENTITY OF THE SHARE A PPLICANTS HAVE BEEN ESTABLISHED, YET FOR THE PURPOSE OF ACCEPTING THE G ENUINENESS OF FOUND U/S 68 OF THE I. T. ACT, 1961, THE PHYSICAL IDENTIT Y OF THE SHARE APPLICANTS HAS TO BE ESTABLISHED AND IN THE PRESENT CASE, THE SAME HAS ITA NO.5464/DEL/2010 2 NOT HAPPENED. RELIANCE IS PLACED ON THE RECENT DEC ISIONS OF HONBLE TRIBUNAL IN SEVERAL CASES NAMELY OMEGA BIOTECH LTD. IN I.T.A. NO. 2860/DEL/2009; OPTIBELT PT. LTD. IN I.T.A.NO. 1964/ DEL/2009; ARYAN MANAGEMENT SERVICES PVT .LTD. IN I.T.A. NO. 2986/DE L/2009; BEAUTEX IN I.T.A. NO. 217/DEL/2008. 2. THE ASSESSEE HAS ALSO FILED CROSS OBJECTIONS WHE REIN, IT HAS CHALLENGED THE LEGAL ISSUE OF REOPENING U/S 147 OF THE ACT. 3. DURING THE COURSE OF HEARING, THE LEARNED COUNSE L FOR THE ASSESSEE AT THE VERY OUTSET STATED THAT THE TAX EFF ECT IN THIS APPEAL IS LESS THAN RS.4,00,000/-, THEREFORE, THE DEPARTME NT OUGHT NOT TO HAVE FILED THIS APPEAL IN VIEW OF THE CIRCULAR ISSU ED BY THE CBDT AND THE PROVISIONS CONTAINED IN SECTION 268A OF THE INCOME TAX ACT, 1961 (HEREINAFTER TO BE REFERRED AS THE ACT). 4. ON THE OTHER HAND, THE LD. D.R., ALTHOUGH SUPPOR TED THE ORDER OF THE ASSESSING OFFICER, BUT COULD NOT CONTR OVERT THIS FACT THAT TAX EFFECT IN THIS APPEAL IS LESS THAN RS.4,00 ,000/-. HOWEVER, LD. D.R. SUBMITTED THAT THE INSTRUCTION NO .5 OF 2014 DATED 10.07.2014, BY WHICH THE CBDT HAS REVISED THE MONETARY LIMIT TO RS. 4,00,000/- FOR FILING THE APPEAL BEFO RE THE TRIBUNAL IS NOT RETROSPECTIVE AND WILL NOT APPLY ON EARLIER CASES. 5. LD. A.R. CONTROVERTING THE STAND OF LD. D.R. HAS SUBMITTED THAT IT IS NOTICED THAT SECTION 268A HAS BEEN INSER TED BY THE FINANCE ACT, 2008 WITH RETROSPECTIVE EFFECT FROM 01 /04/99. THE PROVISIONS CONTAINED IN SECTION 268A READ AS UNDER: 268A. (1) THE BOARD MAY, FROM TIME TO TIME, ISSUE ORDERS, INSTRUCTIONS OR DIRECTIONS TO OTHER INCOME- TAX AUTHORITIES, FIXING SUCH MONETARY LIMITS AS IT MAY DEEM FIT, FOR THE PURPOSE OF REGULATING FILING OF APPEAL OR APPLICATION FOR REFERENCE BY ANY INCOME-TAX AUTHORI TY UNDER THE PROVISIONS OF THIS CHAPTER. ITA NO.5464/DEL/2010 3 (2) WHERE, IN PURSUANCE OF THE ORDERS, INSTRUCTIONS OR DIRECTIONS ISSUED UNDER SUB-SECTION (1), AN INCOME- TAX AUTHORITY HAS NOT FILED ANY APPEAL OR APPLICATION F OR REFERENCE ON ANY ISSUE IN THE CASE OF AN ASSESSEE F OR ANY ASSESSMENT YEAR, IT SHALL NOT PRECLUDE SUCH AUTHORI TY FROM FILING AN APPEAL OR APPLICATION FOR REFERENCE ON TH E 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 ASSESSMENT YEAR. (3) NOTWITHSTANDING THAT NO APPEAL OR APPLICATION F OR REFERENCE HAS BEEN FILED BY AN INCOME-TAX AUTHORITY PURSUANT TO THE ORDERS OR INSTRUCTIONS OR DIRECTION S ISSUED UNDER SUB-SECTION (1), IT SHALL NOT BE LAWFU L FOR AN ASSESSEE, BEING A PARTY IN ANY APPEAL OR REFERENCE, TO CONTEND THAT THE INCOME-TAX AUTHORITY HAS ACQUIESCE D IN THE DECISION ON THE DISPUTED ISSUE BY NOT FILING AN APPEAL 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, INST RUCTIONS OR DIRECTIONS ISSUED UNDER SUB-SECTION (1) AND THE CIRCUMSTANCES UNDER WHICH SUCH APPEAL OR APPLICATIO N 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 FILI NG AN APPEAL OR APPLICATION FOR REFERENCE SHALL BE DEEMED TO HAVE BEEN ISSUED UNDER SUB-SECTION (1) AND THE PROV ISIONS OF SUB-SECTIONS (2), (3) AND (4) SHALL APPLY ACCORD INGLY.] 6. IT IS NOT IN DISPUTE THAT THE BOARDS INSTRUCTIO N OR DIRECTIONS ISSUED TO THE INCOME-TAX AUTHORITIES ARE BINDING O N THOSE AUTHORITIES, THEREFORE, THE DEPARTMENT OUGHT NOT TO HAVE FILED ITA NO.5464/DEL/2010 4 THE APPEAL IN VIEW OF THE ABOVE SAID PROVISIONS MEN TIONED IN SECTION 268A OF THE ACT SINCE THE TAX EFFECT IN THE INSTANT CASE IS LESS THAN THE AMOUNT PRESCRIBED FOR NOT FILING THE APPEAL. 7. IT IS NOTICED THAT THE CBDT HAS ISSUED INSTRUCTI ON NO.5 OF 2014 DATED 10.07.2014, BY WHICH THE CBDT HAS REVISE D THE MONETARY LIMIT TO RS. 4,00,000/- FOR FILING THE AP PEAL BEFORE THE TRIBUNAL, WHICH IS IMPLEMENTED WITH RETROSPECTIVE E FFECT. 8. KEEPING IN VIEW THE CBDT INSTRUCTION NO.5 OF 201 4 DATED 10.07.2014 AND ALSO THE PROVISIONS OF SECTION 268A OF INCOME TAX ACT, 1961, WE ARE OF THE VIEW THAT THE REVENUE SHOULD NOT HAVE FILED THE INSTANT APPEAL BEFORE THE TRIBUNAL. WHILE TAKING SUCH A VIEW, WE ARE FORTIFIED BY THE FOLLOWING DECI SIONS OF HON'BLE PUNJAB & HARYANA HIGH COURT:- 1. CIT V OSCAR LABORATORIES P. LTD (2010) 324 ITR 115 (P&H) 2. CIT V ABINASH GUPTA (2010) 327 ITR 619 (P&H) 3. CIT V VARINDERA CONSTRUCTION CO. (2011) 331 ITR 449 (P&H)(FB) 9. SIMILARLY THE HONBLE DELHI HIGH COURT IN THE CA SE OF CIT V. DELHI RACE CLUB LTD. IN ITA NO.128/2008, ORDER D ATED 03.03.2011 BY FOLLOWING THE EARLIER ORDER DATED 02.08.2010 IN ITA NO.179/1991 IN THE CASE OF CIT DELHI-III V. M/S. P.S. JAIN & CO. HELD THAT SUCH CIRCULAR WOULD ALSO BE APPLICABLE TO PENDING CASES. 10. FROM THE RATIO LAID DOWN BY THE HONBLE DELHI H IGH COURT, IT IS CLEAR THAT THE INSTRUCTIONS ISSUED IN THE CIR CULARS BY CBDT ARE APPLICABLE FOR PENDING CASES ALSO. THEREFORE, BY KEEPING IN VIEW THE RATIO LAID DOWN IN THE AFORESAID REFERRED TO CASES, WE ITA NO.5464/DEL/2010 5 ARE OF THE CONSIDERED VIEW THAT INSTRUCTION NO.5/14 DATED 10.07.2014 ISSUED BY THE CBDT ARE APPLICABLE FOR TH E PENDING CASES ALSO AND IN THE SAID INSTRUCTIONS, MONETARY T AX LIMIT FOR NOT FILING THE APPEAL BEFORE THE ITAT IS RS. 4.00 LAKHS . 11. IN VIEW OF THE ABOVE, WITHOUT GOING INTO MERITS OF THE CASE, WE DISMISS THE APPEAL FILED BY THE REVENUE. 12. SINCE WE HAVE DISMISSED THE APPEAL FILED BY REV ENUE, THE CROSS OBJECTION FILED BY ASSESSEE HAS BECOME INFRUCTUOUS AND ARE DISMISSED. 13. IN NUTSHELL APPEAL FILED BY REVENUE AND CROSS O BJECTIONS FILED BY ASSESSEE ARE DISMISSED. 14. ORDER PRONOUNCED IN THE OPEN COURT ON 10 TH APRIL, 2015. SD./- SD./- ( DIVA SINGH) (T.S. KAPOOR ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATE: 10.04.2015. SP COPY FORWARDED TO:- 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT (A)-, NEW DELHI. 5. THE DR, ITAT, LOKNAYAK BHAWAN, KHAN MARKET, NEW DEL HI. TRUE COPY. BY ORDER (ITAT, NEW DELHI). S.NO. DETAILS DATE INITIALS DESIGNATION 1 DRAFT DICTATED ON 1/4 SR. PS/PS 2 DRAFT PLACED BEFORE AUTHOR 1,8, SR. PS/PS 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER AM/AM 5 APPROVED DRAFT COMES TO THE SR. PS/PS SR. PS/PS 6 KEPT FOR PRONOUNCEMENT SR. PS/PS 7 FILE SENT TO BENCH CLERK SR. PS/PS 8 DATE ON WHICH THE FILE GOES TO HEAD CLERK 9 DATE ON WHICH FILE GOES TO A.R. 10 DATE OF DISPATCH OF ORDER ITA NO.5464/DEL/2010 6