DCIT, Bangalore V. M/s Divyasree Holdings Pvt. Ltd., Bangalore

ITA 626/BANG/2012

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 6107 (ITAT-BANGALORE)
• Duration Of Justice: 2 year(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-05-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 27-12-2016
• Assessment Year: 2002-2003
• Appeal Filed On: 07-05-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRISCILLA SINGSIT
• Assessee Lawyers: A SHANKAR
• Keywords: Search and seizure; Validity of assessment; Tax effect
• Section: 143(3); 153A; 260A

Judgement Text

ITA NOS.626 TO 702 GROUP CASES-DIVYASREE HOLDINGS, CORETECH, DIVYA MOORTHY, DIVYASSREE HOLDINGS, HI-TECH, RUKMIN I AND RUCHIKA DEVELOPERS BANGALORE PAGE 1 OF 11 IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE B BENCH, BANGALORE BEFORE SHRI GEORGE GEORGE K. JUDICIAL MEMBER AND SHRI JASON P. BOAZ, ACCOUNTANT MEMBER ITA NOS.626 & 629/BANG/2012 (ASSESSMENT YEARS: 2005-06 & 2006-07) ASSTT. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 2(3) BANGALORE VS. M/S DIVYASREE HOLDINGS PVT LTD DIVYASREE CHAMBERS, NO.11 O SHAUGNESSY ROAD, BANGALORE 500025 PAN: AAACD 7970 H (APPELLANT) (RESPONDENT) ITA NOS.633 & 634/BANG/2012 (ASSESSMENT YEARS: 2005-06 & 2006-07) ASSTT. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 2(3) BANGALORE VS. M/S DIVYASREE PROPERTIES PVT LTD. (FORMERLY PATHAPATHI FOUNDATIONS PVT LTD). DIVYASREE CHAMBERS, NO.11 O SHAUGNESSY ROAD, BANGALORE 500025 PAN: AAACP 8343 C (APPELLANT) (RESPONDENT) ITA NOS.635 & 636/BANG/2012 (ASSESSMENT YEARS: 2005-06 & 2006-07) ASSTT. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 2(3) BANGALORE VS. M/S CORETECH REALITY PVT. LTD. DIVYASREE CHAMBERS, NO.11 O SHAUGNESSY ROAD, BANGALORE 500025 PAN: AACCC 2764 Q (APPELLANT) (RESPONDENT) ITA NOS.626 TO 702 GROUP CASES-DIVYASREE HOLDINGS, CORETECH, DIVYA MOORTHY, DIVYASSREE HOLDINGS, HI-TECH, RUKMIN I AND RUCHIKA DEVELOPERS BANGALORE PAGE 2 OF 11 ITA NO.695/BANG/2012 (ASSESSMENT YEAR: 2002-03) D.C.I.T. CENTRAL CIRCLE 2(3) BANGALORE VS. M/S DIVYA MOORTHY DEVELOPERS, DIVYASREE CHAMBERS, NO.11 O SHAUGNESSY ROAD, BANGALORE 500025 PAN: AADFD 5840 H (APPELLANT) (RESPONDENT) ITA NO.697/BANG/2012 (ASSESSMENT YEAR: 2005-06) D.C.I.T. CENTRAL CIRCLE 2(3) BANGALORE VS. M/S METRO PROPERTY MANAGEMENT SERVICES PVT. LTD. DIVYASREE CHAMBERS, NO.11 O SHAUGNESSY ROAD, BANGALORE 500025 PAN: AACCM 6585 D (APPELLANT) (RESPONDENT) ITA NO.698/BANG/2012 (ASSESSMENT YEAR: 2005-06) D.C.I.T. CENTRAL CIRCLE 2(3) BANGALORE VS. M/S HIGHTECH REALTORS PVT. LTD. DIVYASREE CHAMBERS, NO.11 O SHAUGNESSY ROAD, BANGALORE 500025 PAN: AABCH 3793 D (APPELLANT) (RESPONDENT) ITA NOS.699 TO 702/BANG/2012 (ASSESSMENT YEARS: 2002-03 TO 2003-04 & 2005-06) D.C.I.T. CENTRAL CIRCLE 2(3) BANGALORE VS. M/S RUKMINI ENTERPRISES. DIVYASREE CHAMBERS, NO.11 O SHAUGNESSY ROAD, BANGALORE 500025 PAN: AAFFR 5890 J (APPELLANT) (RESPONDENT) ITA NOS.626 TO 702 GROUP CASES-DIVYASREE HOLDINGS, CORETECH, DIVYA MOORTHY, DIVYASSREE HOLDINGS, HI-TECH, RUKMIN I AND RUCHIKA DEVELOPERS BANGALORE PAGE 3 OF 11 ITA NOS.703 TO 707/BANG/2012 (ASSESSMENT YEARS: 2002-03 TO 2006-07) D.C.I.T. CENTRAL CIRCLE 2(3) BANGALORE VS. M/S RUCHIKA DEVELOPERS, . DIVYASREE CHAMBERS, NO.11 O SHAUGNESSY ROAD, BANGALORE 500025 PAN: AAGFR 0705 (APPELLANT) (RESPONDENT) DEPARTMENT BY: MS.PRISCILLA SINGSIT, CIT (DR) ASSESSEE BY: SHRI A. SHANKAR, ADVOCATE DATE OF HEARING: 06/05/2014 DATE OF PRONOUNCEMENT: 09/05/2014 O R D E R PER GEORGE GEORGE K. J.M. 1. THESE EIGHTEEN APPEALS, PREFERRED AT THE INSTANCE OF THE REVENUE, ARE DIRECTED AGAINST THE ORDERS OF THE CIT (A)-VI, BANGALORE, DATED 24.2.2012, 27.2.2012, 27.2.2012, 29.2.2012, 13.3.2012, 14.3.2012 & 15.3.2012 IN THE CASES OF (I) M/S. DIVYASREE HOLDINGS PVT. LTD, (II) M/S. DIVYASREE P ROPERTIES PVT. LTD, (III) M/S. CORETECH REALTY PVT. LTD., (IV ) RUKMINI ENTERPRISES, (V) M/S. DIVYA MOORTHY DEVELOPERS; (VI ) HI-TECH REALTORS PVT LTD, (VII) M/S. METRO PROPERTY MANAGEM ENT SERVICES PRIVATE LIMITED & (VIII) RUCHIKA DEVELOPER S RESPECTIVELY. THE RELEVANT ASSESSMENT YEARS ARE 2002-03 TO 2006-07 . I. ITA NOS.626 & 629/12 AYS 2002-03 & 2006-07 M/S. DIVYASREE HOLDINGS PVT. LTD: II. ITA NOS.633 & 634/12 AYS 2005-06 & 2006-07 M/S. DIVYASREE PROPERTIES PVT. LTD: ITA NOS.626 TO 702 GROUP CASES-DIVYASREE HOLDINGS, CORETECH, DIVYA MOORTHY, DIVYASSREE HOLDINGS, HI-TECH, RUKMIN I AND RUCHIKA DEVELOPERS BANGALORE PAGE 4 OF 11 III.ITA NOS.635 & 636/12 AYS 2005-06 & 2006-07 M/S. CORETECH REALTY PVT. LTD: IV.ITA NOS.695/12 AY 2002-03 M/S. DIVYA MOORTHY DEVELOPERS: V. ITA NO.697/12 AY. 2005-06 M/S. DIVYASSREE H OLDINGS PVT. LTD: VI.ITA NO.698/12 AY 2005-06 M/S. HI-TECH REALTO RS PVT. LTD: VII.ITA NOS.699 TO 702/12 AYS 2002-03, 2003-04, 2 005-06 & 2006-07 RUKMINI ENTERPRISES : & VIII. ITA NOS.703 TO 707/12 AYS 2002-03 & 2006-07 M/S. RUCHIKA DEVELOPERS: 2. THE REVENUE HAS, IN ITS MEMORANDUM OF APPEALS I N THE CASES OF ALL THE ASSESSEES (SUPRA), RAISED AN I DENTICAL SOLITARY ISSUE, NAMELY, THAT THE CIT (A) FAILED TO RECOGNIZE THAT THE VALIDITY OF ASSESSMENTS IS LEGALLY NOT CONNECTED WI TH THE ISSUE OF WARRANT WHICH WAS ISSUED IN JOINT NAMES. 3. AS THE ISSUE RAISED IN THESE APPEALS BEING IDEN TICAL AND PERTAINING TO THE SAME GROUP, FOR THE SAKE OF C ONVENIENCE AND BREVITY, THEY WERE HEARD AND DISPOSED OF IN THI S CONSOLIDATED ORDER. 4. BRIEFLY STATED, THE FACTS OF TH E CASES ARE AS UNDER: THERE WAS A SEARCH AND SEIZURE OPERATION IN THE PREMISES OF SHYAMRAJU GROUP ON 1.3.2007 AND ON SUBS EQUENT DATES. CONSEQUENTLY, IN COMPLIANCE TO THE NOTICES U/S 153A OF THE ACT, RETURNS OF INCOME WERE FURNISHED FOR THE R ELEVANT ITA NOS.626 TO 702 GROUP CASES-DIVYASREE HOLDINGS, CORETECH, DIVYA MOORTHY, DIVYASSREE HOLDINGS, HI-TECH, RUKMIN I AND RUCHIKA DEVELOPERS BANGALORE PAGE 5 OF 11 ASSESSMENT YEARS. THE AO HAD, FOR THE RELEVANT ASS ESSMENT YEARS UNDER DISPUTE, PASSED ORDERS U/S 143(3) R.W.S . S. 153C OF THE ACT DT 29.12.2009 BY MAKING CERTAIN ADDITIONS. AGGRIEVED, THE ASSESSEES PREFERRED APPEALS BEFORE THE CIT (A). IN THE MEANWHILE THE THEN CIT (A)-VI, BANGALORE HAD PASSED A COMMON ORDER DATED 11.2.2010 [IN ITA NOS.513, 514 & 515] I N THE ASSESSEES OWN GROUP OF CASES, NAMELY, (I) SRI P. S HYAMARAJU [ITA NOS. 513, 514 & 515 DT. 11.2.2010 FOR THE AYS 2004- 05 TO 2006- 07 (II) SRI BHASKAR N RAJU [ITA NOS. 499 & 501 DATE D 10.2.2010] (III) SRI UMESH RAJU (ITA NOS.492 & 494 DT. 11.02.2 010] AND (IV) SMT ARATHI B RAJU [ITA NOS. 506 & 508 DT.11.2.2010] AGGRIEVED, THOSE ASSESSEES HAVE APPROACHED THE EARL IER BENCH OF THIS TRIBUNAL. AFTER HAVING CONSIDERED THE ABOVE N AMED ASSESSEES CONTENTIONS, ESPECIALLY THE ISSUANCE OF A JOINT WARRANT AS WELL AS THE PERUSAL OF THE RELEVANT JO INT WARRANT, THE EARLIER BENCH, VIDE ITS ORDER DATED 6.1.2012, STRU CK DOWN THE ASSESSMENT ORDERS DATED 31.12.2008 FOR THE AYS 2004 -05 TO 2006-07 AS NOT MAINTAINABLE AND ALSO DISMISSED THE REVENUES APPEALS. IN THE LIGHT OF THE TRIBUNALS ORDER DATE D 6.1.2012 IN ITS OWN GROUP OF CASES, THE PRESENT ASSESSEES HAVE APPR OACHED THE PRESENT CIT (A) WITH THEIR APPEALS FOR ADJUDICATION . AFTER TAKING INTO ACCOUNT THE CONTENTIONS PUT-FORTH BY THE ASSES SEES AS WELL AS IN CONFORMITY WITH THE FINDINGS OF THE EARLIER B ENCH OF THIS TRIBUNAL IN RESPECT OF ISSUANCE OF JOINT WARRANT (SUPRA) AND THE JUDGMENT OF THE HONBLE JURISDICTIONAL HIGH COURT I N THE CASE OF CIT V. P.J. KUMAR, THE CIT (A) HAD ALLOWED THE ASSE SSEES APPEALS FOR THE FOLLOWING IDENTICAL REASONS: 8. IN THE PRESENT CASE, THE ASSESSMENTS IN THE GRO UP OF CASES ARE UNDER THE SAME GROUP (SHYMARAJU GROUP) HA S ITA NOS.626 TO 702 GROUP CASES-DIVYASREE HOLDINGS, CORETECH, DIVYA MOORTHY, DIVYASSREE HOLDINGS, HI-TECH, RUKMIN I AND RUCHIKA DEVELOPERS BANGALORE PAGE 6 OF 11 BEEN ANNULLED BY HONBLE ITAT AND THE LEGAL ISSUE S O FRAMED U/S 153A OF THE I.T. ACT HAS BEEN DECIDED IN FAVOUR OF THE ASSESSEES GROUP. THE PRESENT CASES BEFORE ME I.E., M/S. DIVYASREE HOLDINGS PVT LTD, AN ENTITY OF M/S. SHYAMARAJU GROUP SO FRAMED U/S 153C OF THE I.T ACT WHEREIN SUCH COMPANIES SEARCHED UNDE R THE WARRANT OF AUTHORIZATIONS WHICH WERE IN JOINT N AMES (AND ARE A PART OF THE SAME WARRANT ON WHICH THE ASSESSMENTS HAVE BEEN ANNULLED BY THE ITAT) AND THE LEGAL ISSUES RAISED ARE SIMILAR TO THE ISSUE BEFORE THE HONBLE ITAT IN THEIR OWN CASES. I AM BOUND RESPECTFULLY TO FOLLOW THE DECISION OF THE HONBLE ITAT IN THE ASSESSEES OWN GROUP OF CASES IN ITA NOS. 504, 505 AND 506 OF SRI P SHYAMARAJU FOR AYS 2004-05 TO 2006 - 07, ITA NOS. 507 & 508 OF SMT. ARATHI B RAJU, ITA N OS. 509 & 510 OF SRI BHJASKAR N RAJU AND ITA NOS. 511 & 512 OF SRI UMESH S RAJU FOR AYS 2004-05 & 2006-07 AND THE HONBLE JURISDICTIONAL HIGH COURT IN THE CA SE OF CIT V. P J KUMAR WHICH HAS BEEN FOLLOWED BY THE HONBLE ITAT, B BENCH, BANGALORE. AS HAS BEEN OPINED BY THE HONBLE SUPREME COURT OF INDIA AS REPORTED IN 154 ITR 172 IN THE CASE OF ASSISTANT COLLECTOR OF CENTRAL EXCISE V. DUNLOP IND IA LTD AND OTHERS AND IT IS PERTINENT TO NOTE THE EXCERPTS OF THE DECISION LAID DOWN BY THE HONBLE APEX COURT WHICH ARE AS UNDER: IN THE HIERARCHICAL SYSTEM OF COURTS WHICH EXISTS IN OUR COUNTRY, IT IS NECESSARY FOR EACH LOWER TIER, INCLUDING TH E HIGH COURT, TO ACCEPT LOYALLY THE DECISIONS OF THE HIGHER TIERS. IT IS INEVITABLE IN A HIERARCHICAL SYSTEM OF COURTS THAT THERE ARE DECI SIONS OF THE SUPREME APPELLATE TRIBUNAL WHICH DO NOT ATTRACT THE UNANIMOUS APPROVAL OF ALL MEMBERS OF THE JUDICIARYBUT THE JUDICIAL SYSTEM ONLY WORKS IF SOMEONE IS ALLOWED TO HAVE THE LAST WORD AND THAT LAST WORD, ONCE SPOKEN, IS LOYALLY ACCEPTE D. [SEE OBSERVATIONS OF LORD HILSHAM AND LORD DIPLOCK IN BR OOME V. CASSELL]. THE BETTER WISDOM OF THE COURT BELOW MUS T YIELD TO THE HIGHER WISDOM OF THE COURT ABOVE. THAT IS THE STRE NGTH OF THE HIERARCHICAL JUDICIAL SYSTEM. I HAVE PERUSED THE STATEMENT OF FACTS AND GROUNDS O F APPEAL STATED AND URGED BY THE ASSESSEE, FURTHER SUPPLEMENTED IN THE WRITTEN SUBMISSIONS SO FILED DU RING ITA NOS.626 TO 702 GROUP CASES-DIVYASREE HOLDINGS, CORETECH, DIVYA MOORTHY, DIVYASSREE HOLDINGS, HI-TECH, RUKMIN I AND RUCHIKA DEVELOPERS BANGALORE PAGE 7 OF 11 THE COURSE OF HEARING. THE IMPUGNED ASSESSMENTS SO AGITATED BY THE ASSESSEE IN APPEAL ARE FRAMED U/S 153C OF THE I T ACT AND THAT THE SEARCH ASSESSMENTS IN THE ASSESSEES OWN GROUP OF CASES WHICH HAS BEEN HE LD BY THE HONBLE ITAT IN THE CASES REFERRED TO ABOVE, SO FRAMED U/S 153A OF THE I T ACT HAVE BEEN HELD AS NO T MAINTAINABLE AND WERE ANNULLED BY THE ITAT IN THE AFORESAID CASES. I AM OF THE VIEW THAT THE TRIGGER ING AND ASSUMPTION OF JURISDICTION U/S 153C OF THE I T ACT ON THE ASSESSEE EMANATES OUT OF THE MAIN PROCEEDING S SO ASSUMED U/S 153A OF THE I T ACT. AS THE MAIN ASSESSMENTS U/S 153A OF THE I T ACT AS AFORESAID HA VE BEEN CANCELLED AND ANNULLED BY THE ITAT, THE IMPUGN ED ASSESSMENTS IN APPEAL U/S 153C OF THE I T ACT WHOLL Y AND SOLELY HINGES INVARIABLY ON THE PLANKS U/S 153A OF THE IT ACT WHICH HAS NOW BEEN HELD AS NOT MAINTAINA BLE IN THE ASSESSEES OWN GROUP OF CASES AND, ACCORDING LY, THE IMPUGNED ASSESSMENTS UNDER APPEAL U/S 153C OF THE I T ACT AUTOMATICALLY ARE TO BE HELD AS NOT MAINTAINABLE. FURTHER, I AM BOUND TO FOLLOW THE DECISIONS OF THE HONBLE JURISDICTIONAL HIGH COURT AND HONBLE ITAT, TO MAINTAIN THE JUDICIAL DISCIPLINE A S HAS ALSO BEEN LAID DOWN IN 28 STC 483 [KARNATAKA HIGH COURT] & 158 ITR 148 [KARNATAKA HIGH COURT]. THEREFORE, RESPECTFULLY FOLLOWING THE DECISIONS OF THE HONBLE JURISDICTIONAL HIGH COURT IN P J KUMAR V. A CIT AND JURISDICTIONAL ITAT IN THE ASSESSEES OWN CASE, THE CASES OF M/S DIVYASREE HOLDINGS PVT. LTD ARE ANNULL ED ON THE LEGAL ISSUE OF THE WARRANT BEING IN JOINT NA MES AND NOT INDIVIDUAL NAMES AS THE IMPUGNED ASSESSMENTS HINGES ON THE ASSESSMENTS FRAMED U/S 153A OF THE I T ACT IN RESPECT OF THE ASSESSEES GR OUP WHICH HAVE BEEN ANNULLED AND CONSEQUENTLY THE ASSESSMENTS SO FRAMED U/S 153C OF THE IT ACT ARE CONSEQUENTIAL AND, THUS, DOES NOT STAND THE TEST OF LAW. THEREFORE, NO FINDINGS ARE BEING GIVEN ON EITHER GR OUNDS OF APPEAL, AS RAISED BY THE ASSESSEE AND ALSO ON ME RITS OF THE CASE. 4.1. AGGRIEVED, THE REVENUE HAS COME UP BEFORE US WITH THE PRESENT APPEALS. DURING THE COURSE OF HEARING, THE LEARNED DR SUBMITTED THAT THE HONBLE EARLIER BENCH OF THIS TRIBUNAL HAD ITA NOS.626 TO 702 GROUP CASES-DIVYASREE HOLDINGS, CORETECH, DIVYA MOORTHY, DIVYASSREE HOLDINGS, HI-TECH, RUKMIN I AND RUCHIKA DEVELOPERS BANGALORE PAGE 8 OF 11 EARLIER ANNULLED THE ASSESSMENT ORDERS PASSED IN TH E SAME GROUP ON THE GROUND THAT THE WARRANT ISSUED IN JOINT NAME S WAS NOT LEGAL BY RELYING ON THE JUDGMENT OF THE HONBLE HIG H COURT OF ALLAHABAD IN THE CASE OF SMT VANDANA VERMA AND ALSO ON THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT I N THE CASE OF P.J. KUMAR ON THE ISSUE OF JOINT WARRANT. IT WAS, FURTHER, SUBMITTED THAT THE CIT (A), FOLLOWING THE FINDINGS OF THE HONBLE TRIBUNAL (SUPRA) ALSO ANNULLED THE ORDERS PASSED BY THE AO SOLELY ON THE GROUND THAT SEARCH CONDUCTED BASED ON JOINT WARRANT WAS ILLEGAL AND AS SUCH, ASSESSMENT ORDERS PASSED CONSEQUENT TO SEARCH WAS AB INITIO VOID. THE LEARN ED DR HAD, FURTHER, ARGUED THAT THE CIT (A) FAILED TO APPRECIA TE THAT THE ISSUE OF WARRANT IN FORM NO.45 IS PRESCRIBED BY I.T. RULE S AND IT IS ONLY A PROCEDURAL REQUIREMENT FOR CONDUCT OF SEARCH AND THAT THE PROVISIONS OF I.T. ACT PREVAIL OVER THE I.T. RULES. IT WAS SUBMITTED BY THE DR THAT BEING AGGRIEVED WITH THE FINDINGS OF THE HONBLE TRIBUNAL IN THE ABOVE MENTIONED CASES; THE DEPARTME NT HAS ALSO FILED APPEALS BEFORE THE HONBLE JURISDICTIONAL HIG H COURT WHICH ARE STILL PENDING. THE LEARNED DR HAD FURTHER SUBM ITTED THAT THE DEPARTMENT HAS ALSO FILED AN SLP BEFORE THE HONBLE SUPREME COURT IN THE CASE OF P.J. KUMAR AGAINST THE JUDGMEN T OF THE HONBLE JURISDICTIONAL HIGH COURT ON THE ISSUE OF J OINT WARRANT. IN CONCLUSION, IT WAS PLEADED THAT IN VIEW OF THE R ETROSPECTIVE EFFECT TO AMENDMENT TO SECTION 292CC OF THE ACT, TH E ISSUES RAISED BY THE DEPARTMENT REQUIRE TO BE DELIBERATED UPON AND DECIDED IN FAVOUR OF THE REVENUE. 4.2. ON THE OTHER HAND, THE LEARN ED AR SUPPORTED THE FINDINGS OF THE (I) THE CIT (A), (II) THE HONBLE E ARLIER BENCH OF THIS ITA NOS.626 TO 702 GROUP CASES-DIVYASREE HOLDINGS, CORETECH, DIVYA MOORTHY, DIVYASSREE HOLDINGS, HI-TECH, RUKMIN I AND RUCHIKA DEVELOPERS BANGALORE PAGE 9 OF 11 TRIBUNAL IN THE ASSESSEES GROUP OF CASES AND (III) THE JUDGMENT OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE O F P.J. KUMAR (SUPRA). IN VIEW OF THE ABOVE, IT WAS PLEADED THAT THE APPEALS PREFERRED BY THE REVENUE REQUIRE TO BE DISMISSED. 4.3. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIONS, PERUSED THE RELEVANT MATERIALS ON RECORD AND ALSO T HE FINDINGS OF THE CIT (A) ON THE ISSUE. 4.3.1. AT THE OUTSET, WE WOULD LIKE TO POIN T OUT AN APPEAL MAY BE PREFERRED BY THE REVENUE ON THE MERITS BEFOR E THE APPELLATE TRIBUNAL PROVIDED THE TAX EFFECT IS EXCEEDED THE MONETARY LIMIT OF RS. 3,00,000 /-. IN THIS CONNECTION, WE WOULD LIKE TO REFER TO THE CBDTS INSTRUCTION NO.3 OF 201 1, DATED 9 TH FEBRUARY, 2011, WHEREIN IT HAS BEEN CLARIFIED THAT 2. IN SUPERSESSION OF THE ABOVE INSTRUCTION, IT HA S BEEN DECIDED BY THE BOARD THAT DEPARTMENTAL APPEALS MAY BE FILED ON THE MERITS BEFORE APPELLATE TRIBUNAL, HIGH COURT S AND SUPREME COURT, KEEPING IN VIEW THE MONETARY LIMITS AND CONDITIONS SPECIFIED BELOW. 3. HENCEFORTH APPEALS SHALL NOT BE FILED IN CASES W HERE THE TAX EFFECT DOES NOT EXCEED THE MONETARY LIMITS GIVE N HEREUNDER: SL. NO APPEALS IN INCOME-TAX MATTERS MONETARY LIMIT (IN RS.) 1. 2. 3. APPEALS BEFORE APPELLATE TRIBUNAL APPEAL U/S 260A BEFORE HIGH COURT APPEAL BEFORE SUPREME COURT 3,00,000 10,00,000 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 CASES IS TO BE DECIDED ON MERITS OF THE CASE. ITA NOS.626 TO 702 GROUP CASES-DIVYASREE HOLDINGS, CORETECH, DIVYA MOORTHY, DIVYASSREE HOLDINGS, HI-TECH, RUKMIN I AND RUCHIKA DEVELOPERS BANGALORE PAGE 10 OF 11 4.3.2. FURTHER, THE HONBLE JURISDICTIONAL HIGH CO URT HAD, IN AN IDENTICAL ISSUE IN THE CASE OF CIT & AN R V. RANKA AND RANKA REPORTED IN (2013) 352 ITR 121 (KAR), HELD TH AT AS THE TAX EFFECT WAS LESS THAN RS.10 LAKHS, THE APPEAL WA S TO STAND DISMISSED ON THE GROUND OF MONETARY LIMIT. THE HON'BLE HIGH COURT HELD THAT INSTRUCTION NO.3 OF 2011 IS APPLICA BLE TO PENDING PROCEEDINGS. 4.3.3. INCIDENTALLY, IN THE PRESENT APPEALS , AS ADMITTED BY THE REVENUE [SOURCE: AOS LETTER DT 30.4.2004 TO D R - PLACED ON RECORD], THE TAX EFFECT WAS NOT EXCEEDED THE MONETA RY LIMITS IN ANY OF THE PRESENT ASSESSEES AS PER THE INSTRUCTION NO.3 OF 2011 OF THE CBDT (SUPRA). 4.3.4. TAKING INTO ACCOUNT THE ABOVE FACTS I NTO CONSIDERATION AND ALSO IN CONFORMITY WITH THE (I) BOARDS INSTRUC TION NO.3 DATED 9.2.2011; AND (II) IN PROPOSITION OF THE JUDGMENT O F THE HONBLE JURISDICTIONAL HIGH COURT (SUPRA), THE PRESENT APPE ALS FILED BY THE REVENUE ARE LIABLE TO BE DISMISSED ON THE GROUN D OF MONETARY LIMITS. IT IS ORDERED ACCORDINGLY. 4.3.5. AS PER THE PROVISIONS OF S. 2 68A OF THE ACT AND ALSO AS RULED BY THE HONBLE JURISDICTIONAL HIGH CO URT (SUPRA), THE DEPARTMENT IS, ALWAYS AT LIBERTY TO PROCEED AGA INST THE ASSESSEES ON OTHER CASES OF IDENTICAL ISSUE, IF TH EY ARE ABOVE THE MONETARY LIMIT PRESCRIBED. BEFORE PARTING, WE WOULD LIKE TO MENTION THAT THE REVENUE HAS NOT BROUGHT TO OUR NOT ICE ANY EXEMPTED SITUATION MENTIONED IN PARA 8 OF BOARD INS TRUCTION NO.3 OF 2011 DATED 9 TH FEBRUARY, 2011 WHEREBY APPEAL IS TO BE ITA NOS.626 TO 702 GROUP CASES-DIVYASREE HOLDINGS, CORETECH, DIVYA MOORTHY, DIVYASSREE HOLDINGS, HI-TECH, RUKMIN I AND RUCHIKA DEVELOPERS BANGALORE PAGE 11 OF 11 FILED DESPITE THE TAX EFFECT BEING BELOW THE PRESCR IBED MONETARY LIMIT. 5. IN THE RESULT , THE REVENUES EIGHTEEN APPEALS IN THE CASES OF (I) M/S. DIVYASREE HOLDINGS PVT. LTD, (II) M/S. DIVYASREE PROPERTIES PVT. LTD, (III) M/S. CORETECH REALTY PVT. LTD., (IV) RUKMINI ENTERPRISES, (V) M/S. DIVYA MOORTHY DE VELOPERS; (VI) HI-TECH REALTORS PVT LTD, (VII) M/S. METRO PROPERTY MANAGEMENT SERVICES PRIVATE LIMITED & (VIII) RUCHIKA DEVELOPER S ARE DISMISSED FOR THE REASONS INDICATED ABOVE. ORDER PRONOUNCED IN THE OPEN COURT ON 9 TH MAY, 2014. SD/- SD/- (JASON P. BOAZ) (GEORGE GEORGE K) ACCOUNTANT MEMBER JUDICIAL MEMBER BANGALORE DATED 9 TH MAY, 2014. VNODAN/SPS COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CONCERNED CIT(A) 4. THE CONCERNED CIT 5. THE DR, ITAT, BANGALORE 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL, BANGALORE BENCHES, BANGALORE