ITO, , Nohar V. Shri Ashok Kumar Golyan, Hisar

ITA 565/JODH/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 6596 (ITAT-JODHPUR)
• Duration Of Justice: 4 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-04-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2011-2012
• Appeal Filed On: 18-12-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Audit objection; Tax effect
• Section: 115JB; 12AA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH, JODHPUR BEFORE SHRI N.K.SAINI, VICE PRESIDENT AND SHRI N.K. CHOUDHRY, JUDICIAL MEMBER ITA NOS. 564 & 565/JODH/2018 (ASSESSMENT YEARS -2010-11 & 2011-12) THE INCOME TAX OFFICER, NOHAR VS SH ASHOK KUMAR GOLYAN, C/O HOUSE NO. 746, SECTOR NO. 14, IST FLOOR, OPP. NEW GRAIN MARKET, HISAR (APPELLANT) (RESPONDENT) PAN: AAAHA9745C REVENUE BY SH. P.K. SINGI, DR ASSESSEE BY SHRI MAHESH GEHLOT, ADVOCATE DATE OF HEARING 30.04.2019 DATE OF PRONOUNCEMENT 30.04.2019 O R D E R PER BENCH: THESE APPEALS BY THE DEPARTMENT FOR THE ASSESSMENT YEARS 2010-11 & 2011-12 ARE DIRECTED AGAINST THE SEPARATE ORDERS DA TED 14.09.2018 AND 13.9.2018 RESPECTIVELY OF LD. COMMISSIONER OF INCOM E TAX (APPEALS), BIKANER. 2. DURING THE COURSE OF HEARING, LEARNED COUNSEL FO R THE ASSESSEE, AT THE VERY OUTSET, STATED THAT THE APPEALS FILED BY THE D EPARTMENT ARE NOT 2 MAINTAINABLE IN VIEW OF CIRCULAR NO.3/2018 DATED 11 .7.2018 ISSUED BY THE CBDT WHEREIN THE MONETARY LIMIT FOR TAX EFFECT FOR FILING THE APPEAL BEFORE THE ITAT HAS BEEN INCREASED TO RS.20 LAKHS. 3. THE LD. DR, SUBMITTED THAT CIRCULAR NO.3/2018 IS NOT A BLANKET BAR ON FILING OF APPEALS BEFORE ITAT AND PARA 10 DETAIL S THE EXCEPTIONS TO FILE THE APPEAL WHERE TAX EFFECT IS LESS THAN RS.20 LAKH S AND ALSO CLARIFIES THAT IN CASES WHERE TAX EFFECT IS LESS THAN RS.20 LAKHS OR WHERE TAX EFFECT CANNOT BE QUANTIFIED AS IN THE CASE OF REGISTRATION U/S 12AA, THE MONETARY LIMIT WOULD NOT BE APPLICABLE. IT WAS FURTHER SUBM ITTED THAT THE AFORESAID CIRCULAR NO.3/18 HAS BEEN AMENDED VIDE LETTER F.NO. 279/MISC.142/2007- ITJ(PT) DATED 20 TH JULY, 2018 AS UNDER:- (A) WHERE THE CONSTITUTIONAL VALIDITY OF THE PROVIS IONS OF AN ACT OR RULE IS 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 B EEN ACCEPTED BY THE DEPARTMENT, OR (D) WHERE ADDITION RELATES TO UNDISCLOSED FOREIGN INCOME/UNDISCLOSED FOREIGN ASSETS INCLUDING FINANCI AL ASSETS/UNDISCLOSED FOREIGN BANK ACCOUNT. (E) WHERE ADDITION IS BASED ON INFORMATION RECEIVE D FROM EXTERNAL SOURCES IN THE NATURE OF LAW ENFORCEMENT A GENCIES SUCH AS CBI/ED/DRI/SFIO/DIRECTORATE GENERAL OF GST INTEL LIGENCE (DGGI). (F) CASES WHERE PROSECUTION HAS BEEN FILED BY THE DEPARTMENT AND IS PENDING IN THE COURT. 4. AFTER CONSIDERING THE SUBMISSIONS OF BOTH THE PA RTIES AND THE MATERIAL ON RECORD. IN OUR OPINION, THE AMENDED CIRCULAR IS NOT APPLICABLE TO THE FACTS OF THE PRESENT CASE, RATHER IT IS COVERED BY THE OR IGINAL CIRCULAR NO.3/18 DATED 11.07.2018, VIDE WHICH THE CBDT HAS REVISED THE MON ETARY LIMIT TO 3 RS.20,00,000/- FOR NOT FILING THE APPEAL BEFORE TH E TRIBUNAL, THE SAID CIRCULAR READS AS UNDER: SUBJECT: REVISION OF MONETARY LIMITS FOR FILING OF APPEALS BY THE DEPARTMENT BEFORE INCOME TAX APPELLATE TRIBUNAL, HI GH COURTS AND SLPS/APPEALS BEFORE SUPREME COURT-MEASURES FOR REDUCING LITIGATION-REG. REFERENCE IS INVITED TO BOARDS CIRCULAR NO. 21 OF 2015 DATED 10.12.2015 WHEREIN MONETARY LIMITS AND OTHER CONDIT IONS FOR FILING DEPARTMENTAL APPEALS (IN INCOME-TAX MATTERS) BEFORE INCOME TAX APPELLATE TRIBUNAL, HIGH COURTS AND SLPS/ APPEALS B EFORE SUPREME COURT WERE SPECIFIED. 2. IN SUPERSESSION OF THE ABOVE CIRCULAR, IT HAS BE EN DECIDED BY THE BOARD THAT DEPARTMENTAL APPEALS MAY BE FILED ON MER ITS BEFORE INCOME TAX APPELLATE TRIBUNAL AND HIGH COURTS AND S LPS/ APPEALS BEFORE SUPREME COURT KEEPING IN VIEW THE MONETARY L IMITS 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: S NO APPEALS/SLPS IN INCOME-TAX MATTERS MONETARY LIMIT (IN RS) 1 BEFORE APPELLATE TRIBUNAL 20,00,000/- 2 BEFORE HIGH COURT 50,00,000/- 3 BEFORE SUPREME COURT 1,00,00,000/- IT IS CLARIFIED THAT AN APPEAL SHOULD NOT BE FILED MERELY BECAUSE THE TAX EFFECT IN A CASE EXCEEDS THE MONETARY LIMITS PR ESCRIBED 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 WOULD 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 ISSU ES). FURTHER, TAX EFFECT SHALL BE TAX INCLUDING APPLICABLE SURCHARGE AND CESS. HOWEVER, THE TAX WILL NOT INCLUDE ANY INTEREST THER EON, EXCEPT WHERE CHARGEABILITY OF INTEREST ITSELF IS IN DISPUTE. IN CASE THE CHARGEABILITY OF INTEREST IS THE ISSUE UNDER DISPUTE, THE AMOUNT OF INTEREST SHALL BE THE TAX EFFECT. IN CASES WHERE RETURNED LOSS IS RED UCED OR ASSESSED AS INCOME, THE TAX EFFECT WOULD INCLUDE NOTIONAL TAX O N DISPUTED ADDITIONS. IN CASE OF PENALTY ORDERS, THE TAX EFFEC T WILL MEAN 4 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 DISPUTED IS SUES 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 T HE TAX EFFECT IN RESPECT OF THE DISPUTED ISSUES EXCEEDS THE MONETARY LIMIT SPECIFIED IN PARA 3. NO APPEAL SHALL BE FILED IN RESPECT OF AN A SSESSMENT YEAR OR YEARS IN WHICH THE TAX EFFECT IS LESS THAN THE MONE TARY LIMIT SPECIFIED IN PARA 3. IN OTHER WORDS, HENCEFORTH, APPEALS CAN BE FILED ONLY WITH REFERENCE TO THE TAX EFFECT IN THE RELEVANT ASSESSM ENT YEAR. HOWEVER, IN CASE OF A COMPOSITE ORDER OF ANY HIGH COURT OR A PPELLATE AUTHORITY, WHICH INVOLVES MORE THAN ONE ASSESSMENT YEAR AND COMMON ISSUES IN MORE THAN ONE ASSESSMENT YEAR, APP EALS 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 WHER E A COMPOSITE ORDER/JUDGEMENT INVOLVES MORE THAN ONE ASSESSEE, EA CH ASSESSEE SHALL BE DEALT WITH SEPARATELY. 6. FURTHER, WHERE INCOME IS COMPUTED UNDER THE PROV ISIONS OF SECTION 115JB OR SECTION 115JC, FOR THE PURPOSES OF DETERMINATION OF TAX EFFECT, TAX ON THE TOTAL INCOME ASSESSED SHAL L BE COMPUTED AS PER THE FOLLOWING FORMULA- (A B) + (C D) WHERE, A = THE TOTAL INCOME ASSESSED AS PER THE PROVISIONS OTHER THAN THE PROVISIONS CONTAINED IN SECTION 115JB OR SECTION 11 5JC (HEREIN CALLED GENERAL PROVISIONS); B = THE TOTAL INCOME THAT WOULD HAVE BEEN CHARGEABL E HAD THE TOTAL INCOME ASSESSED AS PER THE GENERAL PROVISIONS BEEN REDUCED BY THE AMOUNT OF THE DISPUTED ISSUES UNDER GENERAL PROVISIONS; C = THE TOTAL INCOME ASSESSED AS PER THE PROVISIONS CONTAINED IN SECTION 115JB OR SECTION 115JC; D = THE TOTAL INCOME THAT WOULD HAVE BEEN CHARGEABL E HAD THE TOTAL INCOME ASSESSED AS PER THE PROVISIONS CONTAIN ED IN SECTION 115JB OR SECTION 1I5JCWAS REDUCED BY THE AMOUNT OF DISPUTED ISSUES UNDER THE SAID PROVISIONS: HOWEVER, WHERE THE AMOUNT OF DISPUTED ISSUES IS CON SIDERED BOTH UNDER THE PROVISIONS CONTAINED IN SECTION 115JB OR SECTION 115JC 5 AND UNDER GENERAL PROVISIONS, SUCH AMOUNT SHALL NOT BE REDUCED FROM TOTAL INCOME ASSESSED WHILE DETERMINING THE AM OUNT UNDER ITEM D. 7. IN A CASE WHERE APPEAL BEFORE A TRIBUNAL OR A C OURT IS NOT FILED ONLY ON ACCOUNT OF THE TAX EFFECT BEING LESS THAN T HE MONETARY LIMIT SPECIFIED ABOVE, THE PR. COMMISSIONER OF INCOME-TAX / COMMISSIONER OF INCOME TAX SHALL SPECIFICALLY RECORD THAT EVEN THOUGH THE DECISION IS NOT ACCEPTABLE, APPEAL IS NOT BEING FIL ED ONLY ON THE CONSIDERATION THAT THE TAX EFFECT IS LESS THAN THE MONETARY LIMIT SPECIFIED IN THIS CIRCULAR. FURTHER, IN SUCH CASES , THERE WILL BE NO PRESUMPTION THAT THE INCOME-TAX DEPARTMENT HAS ACQU IESCED IN THE DECISION ON THE DISPUTED ISSUES. THE INCOME-TAX DEP ARTMENT SHALL NOT BE PRECLUDED FROM FILING AN APPEAL AGAINST THE DISPUTED ISSUES IN THE CASE OF THE SAME ASSESSEE FOR ANY OTHER ASSESSM ENT YEAR, OR IN THE CASE OF ANY OTHER ASSESSEE FOR THE SAME OR ANY OTHER ASSESSMENT YEAR, IF THE TAX EFFECT EXCEEDS THE SPECIFIED MONET ARY LIMITS. 8. 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 HA S IMPLICITLY ACCEPTED THE DECISION OF THE TRIBUNAL OR COURT IN T HE CASE OF THE ASSESSEE FOR ANY OTHER ASSESSMENT YEAR OR IN THE CA SE OF ANY OTHER ASSESSEE FOR THE SAME OR ANY OTHER ASSESSMENT YEAR, BY NOT FILING AN APPEAL ON THE SAME DISPUTED ISSUES. THE DEPARTMENTA L REPRESENTATIVES/COUNSELS 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 TH E TAX EFFECT BEING LESS THAN THE SPECIFIED MONETARY LIMIT AND, THEREFO RE, NO INFERENCE SHOULD BE DRAWN THAT THE DECISIONS RENDERED THEREIN WERE ACCEPTABLE TO THE DEPARTMENT. ACCORDINGLY, THEY SHOULD IMPRESS UPON THE TRIBUNAL OR THE COURT THAT SUCH CASES DO NOT HAVE A NY PRECEDENT VALUE AND ALSO BRING TO THE NOTICE OF THE TRIBUNAL/ COURT THE PROVISIONS OF SUB SECTION (4) OF SECTION 268A OF TH E INCOME-TAX ACT, 1961 WHICH READ AS UNDER : (4) THE APPELLATE TRIBUNAL OR COURT, HEARING SUCH APPEAL 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 REFERENC E WAS FILED OR NOT FILED IN RESPECT OF ANY CASE. 9. AS THE EVIDENCE OF NOT FILING APPEAL DUE TO THI S CIRCULAR MAY HAVE TO BE PRODUCED IN COURTS, THE JUDICIAL FOLDERS IN T HE OFFICE OF PR. CSIT/CSIT MUST BE MAINTAINED IN A SYSTEMIC MANNER F OR EASY RETRIEVAL. 6 10. ADVERSE JUDGMENTS RELATING TO THE FOLLOWING ISS UES SHOULD BE CONTESTED ON MERITS NOTWITHSTANDING THAT THE TAX EF FECT 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 PROVIS IONS OF AN ACT OR RULE IS UNDER CHALLENGE, OR (B) WHERE BOARDS ORDER, NOTIFICATION, INSTRUCTION OR CIRCULAR HAS BEEN HELD TO BE ILLEGAL OR ULTRA FIRES, OR (C) WHERE REVENUE AUDIT OBJECTION IN THE CASE HAS B EEN ACCEPTED BY THE DEPARTMENT, OR (D) WHERE THE ADDITION RELATES TO UNDISCLOSED FOREI GN ASSETS/ BANK ACCOUNTS. 11. THE MONETARY LIMITS SPECIFIED IN PARA 3 ABOVE S HALL 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 AND RULES. FURTHER, IN CASES WHERE THE TAX EFFECT IS NOT QUANTIFIABLE OR NOT INVOLVED, SUC H AS THE CASE OF REGISTRATION OF TRUSTS OR INSTITUTIONS UNDER SECTIO N 12A/ 12AA OF THE IT ACT, 1961 ETC., FILING OF APPEAL SHALL NOT BE GO VERNED BY THE LIMITS SPECIFIED IN PARA 3 ABOVE AND DECISION TO FILE APPE ALS IN SUCH CASES MAY BE TAKEN ON MERITS OF A PARTICULAR CASE. 12. IT IS CLARIFIED THAT THE MONETARY LIMIT OF RS. 20 LAKHS FOR FILING APPEALS BEFORE THE ITAT WOULD APPLY EQUALLY TO CROS S OBJECTIONS UNDER SECTION 253(4) OF THE ACT. CROSS OBJECTIONS B ELOW THIS MONETARY LIMIT, ALREADY FILED, SHOULD BE PURSUED FO R DISMISSAL AS WITHDRAWN/ NOT PRESSED. FILING OF CROSS OBJECTIONS BELOW THE MONETARY LIMIT MAY NOT BE CONSIDERED HENCEFORTH. SI MILARLY, REFERENCES TO HIGH COURTS AND SLPS/ APPEALS BEFORE SUPREME COURT BELOW THE MONETARY LIMIT OF RS. 50 LAKHS AND RS. 1 CRORE RESPECTIVELY SHOULD BE PURSUED FOR DISMISSAL AS WIT HDRAWN/ NOT PRESSED. REFERENCES BEFORE HIGH COURT AND SLPS/ APP EALS BELOW THESE LIMITS MAY NOT BE CONSIDERED HENCEFORTH. 13. THIS CIRCULAR WILL APPLY TO SLPS/ APPEALS/ CRO SS OBJECTIONS/ REFERENCES TO BE FILED HENCEFORTH IN SC/HCS/TRIBUNA L AND IT SHALL ALSO APPLY RETROSPECTIVELY TO PENDING SLPS/ APPEALS / CROSS OBJECTIONS/REFERENCES. PENDING APPEALS BELOW THE SP ECIFIED TAX LIMITS IN PARE 3 ABOVE MAY BE WITHDRAWN/ NOT PRESSED. 14. THE ABOVE MAY BE BROUGHT TO THE NOTICE OF ALL C ONCERNED. 7 15. THIS ISSUES UNDER SECTION 268A OF THE INCOME-TA X ACT 1961. 5. FROM CLAUSE 12 & 13 OF THE ABOVE SAID CIRCULAR I T IS CLEAR THAT THESE INSTRUCTIONS ARE APPLICABLE TO THE PENDING APPEALS ALSO AND AS PER CLAUSE 13, THERE IS CLEAR CUT INSTRUCTION TO THE DEPARTMENT TO WITHDRAW OR NOT TO PRESS THE APPEALS FILED BEFORE THE ITAT WHEREIN TAX EFFECT IS LESS THAN RS.20,00,000/-. THESE INSTRUCTIONS ARE OPERATIVE RETROSPECTIVELY TO THE PENDING APPEALS. 6. KEEPING IN VIEW THE CBDT CIRCULAR NO. 3 OF 2018 DATED 11.07.2018, WE ARE OF THE VIEW THAT THE REVENUE SHOULD NOT HAVE FILED THE INSTANT APPEALS BEFORE THE TRIBUNAL. 7. IN THE RESULT, THE APPEALS OF THE DEPARTMENT ARE DISMISSED. (ORDER PRONOUNCED IN THE COURT ON 30.04.2019) SD/- SD/- (N.K. CHOUDHRY) (N.K. SAINI) JUDICIAL MEMBER VICE PRESIDENT DATED : 30.04.2019 . . / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. / CIT 4. ( )/ THE CIT(A) 5. , , # / DR, ITAT, JODHPUR 6. & / GUARD FILE / BY ORDER / ASSISTANT REGISTRAR