DCIT, New Delhi V. M/s. Promed Exports Pvt. Ltd., New Delhi

ITA 5711/DEL/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 7225 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 8 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-06-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC 1
• Next Hearing Date: 27-06-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 21-10-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: ARUNAV KUMAR
• Keywords: Retrospective amendment; Tax effect
• Section: 115JB; 12A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH SMC-1, NEW DELHI BEFORE SH. N. K. SAINI, ACCOUNTANT MEMBER ITA NO. 5711/DEL/2014 : ASSTT. YEAR : 2010-11 DCIT CIRCLE 14(1) NEW DELHI VS PROMED EXPORTS PVT. LTD. 208, ASHIRVAD COMMERCIAL COMPLEX, D-1, GREEN PARK NEW DELHI (APPELLANT) (RESPONDENT) PAN NO. AAACP1612Q ASSESSEE BY : SH. ARUNAV KUMAR, ADV. REVENUE BY : SH. AMIT KATOCH, SR. DR DATE OF HEARING : 27.06.2016 DATE OF PRONOUNCEMENT : 27 .06.2016 ORDER THIS IS AN APPEAL BY THE DEPARTMENT AGAINST THE ORD ER DATED 04.07.2014 OF LD. CIT(A)-XVII, NEW DELHI. THE ONLY GROUND HAS BEEN RAISED IN THIS APPEAL READ S AS UNDER : ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD . CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 45 ,80,488/- MADE BY THE AO IGNORING THE FACT THAT THE PROVISION WAS CREATED TO MEET UNASCERTAINED LIABILITY AND HENCE R EQUIRED TO BE ADDED BACK WHILE CALCULATING BOOK PROFIT. 2. DURING THE COURSE OF HEARING, THE LEARNED COUNSE L FOR THE ASSESSEE AT THE VERY OUTSET STATED THAT THE RATE OF TAX FOR THE ITA NO. 5711/DEL/2014 PROMED EXPORTS PVT. LTD. 2 ASSESSMENT YEAR UNDER CONSIDERATION ON THE PROFIT U /S 115JB OF INCOME TAX ACT, 1961( HEREINAFTER REFERRED TO AS TH E ACT) WAS 15%, THEREFORE, TAX EFFECT IN THIS APPEAL IS LE SS THAN RS. 10,00,000/- AND THE DEPARTMENT OUGHT NOT TO HAV E FILED THE APPEAL IN VIEW OF THE CBDT CIRCULAR NO. 21 OF 2015 DATED 10.12.2015. 3. 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 .10,00,000/-. 4. AFTER CONSIDERING THE SUBMISSIONS OF BOTH THE PA RTIES AND THE MATERIAL AVAILABLE ON RECORD, IT IS NOTICED THA T SECTION 268A HAS BEEN INSERTED BY THE FINANCE ACT, 2008 WIT H RETROSPECTIVE EFFECT FROM 01/04/99. THE SAID SECTIO N 268 OF THE ACT PROVIDES THAT THE BOARD MAY ISSUE INSTRUCTION O R DIRECTIONS TO THE OTHER INCOME-TAX AUTHORITIES FIXING MONETARY LIMITS FOR NOT FILING THE APPEALS BEFORE THE APPELLATE TRIBUNA L OR THE COURTS, SAID INSTRUCTIONS/DIRECTIONS ARE BINDING ON THE INCOME TAX AUTHORITIES. ITA NO. 5711/DEL/2014 PROMED EXPORTS PVT. LTD. 3 5. IT IS NOTICED THAT THE CBDT HAS ISSUED CIRCULAR NO.21 OF 2015 DATED 10.12.2015, VIDE WHICH IT HAS REVISED TH E MONETARY LIMIT TO RS.10,00,000/- FOR NOT FILING THE APPEAL BEFORE THE TRIBUNAL. THE RELEVANT PORTION OF THE SAID CIRCULAR READS AS UNDER: .. ... 3. HENCEFORTH, APPEALS/ SLPS SHALL NOT BE FILED IN CASES WHERE THE TAX EFFECT DOES NOT EXCEED THE MONE TARY LIMITS GIVEN HEREUNDER: 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 MONETA RY LIMITS PRESCRIBED ABOVE. FILING OF APPEAL IN SUCH C ASES IS TO BE DECIDED ON MERITS OF THE CASE. 9. THE MONETARY LIMITS SPECIFIED IN PARA 3 ABOVE SH ALL NOT APPLY TO WRIT MATTERS AND DIRECT TAX MATTERS OT HER THAN INCOME TAX. FILING OF APPEALS IN OTHER DIRECT TAX MATTERS SHALL CONTINUE TO BE GOVERNED BY RELEVANT PROVISIONS OF STATUTE & RULES. FURTHER, FILING OF A PPEAL IN CASES OF INCOME TAX, WHERE THE TAX EFFECT IS NOT QUANTIFIABLE OR NOT INVOLVED, SUCH AS THE CASE OF ITA NO. 5711/DEL/2014 PROMED EXPORTS PVT. LTD. 4 REGISTRATION OF TRUSTS OR INSTITUTIONS UNDER SECTIO N 12A OF THE IT ACT, 1961, SHALL NOT BE GOVERNED BY THE LIMI TS SPECIFIED IN PARA 3 ABOVE AND DECISION TO FILE APP EAL IN SUCH CASES MAY BE TAKEN ON MERITS OF A PARTICULAR C ASE. 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 ABOVE MAY BE WITHDRA WN/ 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. 6. FROM CLAUSE 10 OF THE ABOVE SAID CIRCULAR IT IS CLEAR THAT THESE INSTRUCTIONS ARE APPLICABLE TO THE PENDING AP PEALS ALSO AND AS PER CLAUSE 3, 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.10,00,0 00/-. THESE INSTRUCTIONS ARE OPERATIVE RETROSPECTIVELY TO THE P ENDING APPEALS. 7. KEEPING IN VIEW THE CBDT CIRCULAR NO.21 OF 2015 DATED 10.12.2015 AND ALSO THE PROVISIONS OF SECTION 268A OF INCOME TAX ACT, 1961, I AM OF THE VIEW THAT THE REVENUE SH OULD NOT HAVE FILED THE INSTANT APPEAL BEFORE THE TRIBUNAL. ITA NO. 5711/DEL/2014 PROMED EXPORTS PVT. LTD. 5 8. IN VIEW OF THE ABOVE, WITHOUT GOING INTO MERITS OF THE CASE, I DISMISS THE APPEAL FILED BY THE DEPARTMENT. 9. IN THE RESULT, APPEAL OF THE DEPARTMENT IS DISMI SSED. (ORDER PRONOUNCED IN THE COURT ON 27/06/2016) SD/- (N. K. SAINI) ACCOUNTANT MEMBER DATED: 27/06/2016 *BINITA* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITA NO. 5711/DEL/2014 PROMED EXPORTS PVT. LTD. 6 DATE INITIAL 1. DRAFT DICTATED ON 27.06.2016 PS 2. DRAFT PLACED BEFORE AUTHOR 27.06.2016 PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS PS/PS 6. KEPT FOR PRONOUNCEMENT ON PS 7. FILE SENT TO THE BENCH CLERK PS 8. DATE ON WHICH FILE GOES TO THE AR 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 10. DATE OF DISPATCH OF ORDER.