ACIT 11(3), MUMBAI V. Y.P. TRIVEDI, MUMBAI

ITA 5883/MUM/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 54957 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 1 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-08-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Assessment Year: 2005-2006
• Appeal Filed On: 23-07-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A K NAYAK
• Assessee Lawyers: USHA DALAL
• Keywords: Tax effect

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH G MUMBAI BEFORE SHRI R.S. SYAL (AM) AND SMT. ASHA VIJAYARAGHAVAN (JM) ITA NO. 5883/MUM/2010 ASSESSMENT YEAR 2005-06 THE ACIT 11(3), AAYAKAR BHAVAN, MUMBAI-400 020 VS. SHRI Y.P. TRIVEDI, 23, ATLANTA, NARIMAN POINT, MUMBAI-400 021 PA N-AAAFPT 3468G (APPELLANT) (RESPONDENT) C.O. NO. 113/MUM/2011 (ARISING OUT OF ITA NO. 5883/MUM/2010) ASSESSMENT YEAR 2005-06 SHRI Y.P. TRIVEDI, 23, ATLANTA, NARIMAN POINT, MUMBAI-400 021 VS. THE ACIT 11(3), AAYAKAR BHAVAN, MUMBAI-400 020 ( CROSS OBJECTOR ) (RESPONDENT) DEPARTMENT BY: SHRI A.K. NAYAK ASSESSEE BY : SMT. USHA DALAL DATE OF HEARING : 18.8.2011 DATE OF PRONOUNCEMENT: O R D E R PER ASHA VIJAYARAGHAVAN (JM) THIS APPEAL PREFERRED BY THE REVENUE IS DIRECTED AG AINST THE ORDER DATED 5.5.2010 PASSED BY THE LD. CIT(A)-2 FOR THE A SSESSMENT YEAR 2005-06. 2. THE LD. COUNSEL FOR THE ASSESSEE MRS. USHA DALAL POINTED OUT BY INSTRUCTION NO. 3 DT. 9.2.2011, THE MONETARY LIMIT FOR FILING THE DEPARTMENTAL APPEAL BEFORE THE APPELLATE TRIBUNAL HAS BEEN FIXED AT RS. 3 LACS I.E. TO SAY THAT DEPARTMENT APPEALS S HALL NOT BE FILED IN ITA NO.5883/M/10 2 CASES WHERE THE TAX EFFECT DOES NOT EXCEED THE MONE TARY LIMIT OF 3 LAKHS. 3. THE LD. DR SHRI. OBJECTED TO THE LD. COUNSELS P LEA. THE LD. DR FURTHER ARGUED THAT THE BOARDS INSTRUCTION IS TO BE APPLIED PROSPECTIVELY AND THAT IT MAKES NO REFERENCE TO PE NDING MATTERS. HE PRODUCED INSTRUCTION NO. 3/2011 (F. NO. 279/MISC .142/2007-ITJ) DT. 9.2.2011 AND POINTED OUT AT CLAUSE 11 WHICH REA DS AS FOLLOWS: THIS INSTRUCTION WILL APPLY TO APPEALS FILED ON OR AFTER 9 TH FEBRUARY, 2011. HOWEVER, THE CASES WHERE APPEALS HAVE BEEN FILED BEFORE 9 TH FEBRUARY, 2011 WILL BE GOVERNED BY THE INSTRUCTIONS ON THIS SUBJECT, OPERA TIVE AT THE TIME WHEN SUCH APPEAL WAS FILED. 4. HOWEVER THE LD. DR CONCEDED THAT CBDTS INSTRUC TION NO. 2 OF 2005 DT. 24.10.2005 HAS INSTRUCTED ALL OFFICERS OF I.T DEPARTMENT NOT TO FILE APPEAL BEFORE THE TRIBUNAL WHERE THE TA X EFFECT INVOLVED IN APPEAL DOES NOT EXCEED RS. 2 LAKHS. IN THIS CAS E THE TOTAL AMOUNT OF TAX IS RS. 1,93,507/- AND THE PENALTY AMOUNT WIL L NOT EXCEED RS. 2 LAKHS HENCE THE REVENUES APPEAL IS NOT MAINTAINABL E. 4. THE LD. COUNSEL FOR THE ASSESSEE ON THE OTHER HA ND RELIED ON THE DECISION OF THE BOMBAY HIGH COURT IN THE CASE O F CIT VS. MADHUKAR K. INAMDAR (HUF) 318 ITR 149 AND CIT VS P ITHWA ENGG. WORKS 276 ITR 519 (BOM) AND THE ITAT MUMBAI I BE NCH IN THE CASE OF INDIA SAFETY VALUTS LTD. IN ITA NO. 648 TO 651/M/2010 AND ALSO IN THE DECISION OF ITAT MUMBAI A BENCH IN IT A NO. 2165/M/2010 FOR ASSESSMENT YEAR 2004-05 IN THE CASE OF M/S. LAXMI JEWEL PVT. LTD. . THE LD. COUNSEL FOR THE AS SESSEE FURTHER SUBMITTED THAT THE INSTRUCTION NO. 3/2011 CLEARLY S TATES THAT IN CASE OF PENALTY ORDERS, THE TAX EFFECT WILL MEAN QUANTUM OF PENALTY DELETED OR REDUCED IN THE ORDER TO BE APPEALED AGAI NST. HENCE THE INSTRUCTION IS APPLICABLE TO THE APPEAL OF THE DEPA RTMENT WITH RESPECT TO CANCELLATION OF PENALTY LEVIED U/S. 271( 1)(C). ITA NO.5883/M/10 3 5. WE HEARD BOTH PARTIES. THE ITAT MUMBAI A BENCH IN ITA NO. 2165/M/2010 FOR ASSESSMENT YEAR 2004-05 IN THE CASE OF M/S. LAXMI JEWEL PVT. LTD. HAS HELD AS FOLLOWS: WE HAVE CONSIDERED THE ISSUE. THERE IS NO DOUBT T HAT THE TAX EFFECT IN THIS CASE IF ONLY `. 2,07,512/-. AS PER INSTRUCTION NO. 3 OF 2011 DT. 9.2.2011 APPEAL BEFOR E APPELLATE TRIBUNAL CAN BE FILED WHERE THE TAX EFFECT EXCEEDS THE MONETARY LIMIT OF `. 3,00,000/-. HOWEVER, CONSIDER ING THE SIMILAR SITUATION WHERE TAX LIMITS WERE MODIFIED BY THE CBDT INSTRUCTION NO. 5 OF 2008 THE HONBLE JURISDICTIONA L HIGH COURT IN THE CASE OF CIT VS MADHUKAR K. INAMDAR (HUF) (SU PRA) HELD THAT THE CIRCULAR WILL BE APPLICABLE TO THE CASES P ENDING BEFORE THE COURT EITHER FOR ADMISSION OR FOR FINAL DISPOSA L. IN VIEW OF THE ORDER OF THE JURISDICTIONAL HIGH COURT WE HOLD THAT INSTRUCTION NO. 3 DT. 9.2.2011 IS APPLICABLE FOR TH E APPEAL PREFERRED BY THE REVENUE. THEREFORE, THE APPEAL IS DISMISSED ON THE ISSUE OF TAX EFFECT INVOLVED. EVEN OTHERWIS E THERE IS NO CASE FOR THE REVENUE ON MERITS AS THE ISSUE WAS HEL D IN AGAINST THE REVENUE BY THE ITAT ORDER IN THE CASE O F LIVING STORES JEWELLERY (P) LTD. VS. DCIT 31 SOT 323, WHIC H THE CIT(A) FOLLOWED. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. RESPECTFULLY FOLLOWING THE ABOVE DECISIONS, WE DIS MISS THE REVENUES APPEAL. 6. AS THE DEPARTMENTAL APPEAL HAS BEEN DISMISSED, T HE CROSS OBJECTION FILED BY THE ASSESSEE BECOME INFRUCTUOUS. 7. IN THE RESULT, THE APPEAL FILED BY THE REVENUE A ND THE C.O. FILED BY THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED ON THIS 26 TH DAY OF AUGUST, 2011 SD/- SD/- (R.S. SYAL) (ASHA VIJAYARAGHAVAN) ACCOUNTANT MEMBER JU DICIAL MEMBER MUMBAI, DATED 26 TH AUGUST, 2011 RJ ITA NO.5883/M/10 4 COPY TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT-CONCERNED 4. THE CIT(A)-CONCERNED 5. THE DR G BENCH TRUE COPY BY ORDER ASSTT. REGISTRAR, I.T.A.T, MUMBAI ITA NO.5883/M/10 5 DATE INITIALS 1. DRAFT DICTATED ON: 18 . 8 . 2011 SR. PS/PS 2. DRAFT PLACED BEFORE AUTHOR: 18.08.2011 SR. PS/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: SR. PS/PS 6. ORDER PRONOUNCED ON: SR. PS/PS 7. FILE SENT TO THE BENCH CLERK: 8. DATE ON WHICH FILE GOES TO THE HEAD CLERK: SR. PS/PS 9. DATE ON WHICH FILE GOES TO AR 10. DATE OF DISPATCH OF ORDER: