Income-tax Officer, Jalgaon V. Shri Mahendra Javerilal Jain, Jalgaon

ITA 646/PUN/2007

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 56518 (ITAT-PUNE)
• Duration Of Justice: 4 year(s) 4 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-10-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 16-09-2011
• Assessment Year: 2003-2004
• Appeal Filed On: 10-05-2007
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D R KOLI
• Keywords: Question of law; Tax effect
• Section: 133A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE SHRI I.C.SUDHIR, JUDICIAL MEMBER AND SHRI D.KARUNAKARA RAO, ACCOUNTANT MEMBER ITA NO.646/PN/2007 (ASSESSMENT YEAR: 2003-04) ITO, WD.2(4), JALGAON .. A PPELLANT VS. SHRI MAHENDRA JAVERILAL JAIN .. RESPONDENT MAIN ROAD, KAJGAON, TAL.BHADGAON, DIST JALGAON APPELLANT BY: SHRI D.R.KOLI, DR RESPONDENT BY: NONE ORDER PER D.KARUNAKARA RAO, AM : THIS APPEAL IS FILED BY THE REVENUE AGAINST THE ORD ER OF THE CIT(A) DATED 21-02-2007 FOR THE A.Y.2003-04. 2. THE GROUNDS OF APPEAL, AS RAISED BY THE REVENUE, RE AD AS UNDER: (1) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE CIT(A)-II, NASHIK HAS ERRED IN DELETING THE ADMITTED ADDITIONA L INCOME OF RS.5,00,000/- DURING THE COURSE OF ACTION U/S 133A OF THE I.T.ACT. (2) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE CIT(A)-II, NASHIK HAS ERRED IN ACCEPTING THE PLEASE OF THE ASS ESSEE THAT A LOAN RAISED OF RS.5 LACS ON 24-04-2002 AND IT WAS AVAILA BLE WITH THE ASSESSEE FROM 24-4-2002 TO THE DATE OF SURVEY. (3) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE CIT(A)-II, NASHIK HAS ERRED IN THE APPRECIATING THE FACT THAT EVERY ASSESSEE INCLUDING THE PRESENT ASSESSEE IS ALWAYS EXPECTED T O KNOW THEIR FINANCIAL STATE OF AFFAIRS AND ALSO THE FACT THAT T HEY HAVE BEEN EARNING THE INCOME WHICH HAVE NOT BEEN ENTERED INTO THE BOOKS OF ACCOUNTS. (4) THE CIT(A)-II, NASHIK HAS ERRED IN NOT APPRECIATING THE FACT THAT THE ADDITION OF THE SAID ADMITTED INCOME AMOUNTING TO R S.5 LACS HAD BEEN MADE ON THE GROUND THAT THE SOURCE OF THE SAID CASH WAS UNEXPLAINABLE AND UNACCOUNTED. THE SUBSEQUENT EXP LANATION WAS NOTHING BUT TO COLOUR THE UNTRUE PICTURE. (5) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE CIT(A)-II, NASHIK HAS ERRED IN ALLOWING THE ASSESSEE TO RETRA CT HIS STATEMENT MADE U/S. 133A OF THE I.T.ACT. ITA NO.646/PN/2007 (ASSESSMENT YEAR: 2003-04) SHRI MAHENDRA JAVERILAL JAIN, 3. AT THE TIME OF HEARING, THE LEARNED REPRESENTATI VE FOR THE RESPONDENT- ASSESSEE WAS NOT PRESENT. 4. WE ARE OF THE OPINION THAT INSTRUCTION NO. 3/20 11 DATED 09.02.2011 ISSUED BY THE CENTRAL BOARD OF DIRECT TAXES (CBDT) FIXING THE MONETARY LIMITS FOR FILING OF DEPARTMENTAL APPEALS BEFORE THE TRIBU NAL. IN TERMS OF THE SAID INSTRUCTION, MONETARY LIMIT FOR FILING DEPARTMENTAL APPEAL TO THE TRIBUNAL HAS BEEN FIXED AT RS 3 LAKHS. IN OTHER WORDS, IN CASES WHERE THE TAX EFFECT OF THE ADDITIONS DELETED BY THE COMMISSIONER OF INCOME-TAX (APPEALS) IS LESS THAN RS 3 LAKHS, NO APPEAL SHALL BE FILED BY THE DEPARTMENT IN SUCH CASES. ACCORDING TO THE LEARNED REPRESENTATIVE, THE TAX EFFECT WITH RES PECT TO THE RELIEF ALLOWED BY THE COMMISSIONER OF INCOME-TAX (APPEALS) IN THE CAP TIONED APPEALS IN EACH OF THE YEAR IS BELOW RS 3 LAKHS. SUCH FACTUAL MATRIX H AS NOT BEEN CONTESTED BY THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REV ENUE, THOUGH THE RELIEF ALLOWED BY THE COMMISSIONER OF INCOME-TAX (APPEALS) IS SOUGHT TO BE ASSAILED ON MERITS, BY RELYING ON THE JUDGMENT OF THE HONBL E DELHI HIGH COURT IN THE CASE OF LOGITRONICS P. LTD (SUPRA). 5. WE FURTHER RELIED UPON A RECENT DECISION OF THE MUMBAI BENCH OF THE TRIBUNAL IN THE CASE OF ITO V SHRI ASHOK G. DHANDHA RIAI, MUMBAI IN ITA NO2460/MUM/2010 DATED 28.2.2011 TO CANVASS THAT THE REVISED INSTRUCTIONS DATED 9.2.2011 (SUPRA) ARE APPLICABLE TO THE PRESEN T CASE ALSO, ALTHOUGH SUCH APPEALS HAVE BEEN FILED ON A PRIOR DATE. 6. IN VIEW OF THE PRECEDENT, THE CAPTIONED DEPARTME NTAL APPEALS ARE LIABLE TO BE CONSIDERED TO HAVE BEEN FILED CONTRARY TO THE CBDT INSTRUCTIONS DATED 9.2.2011 (SUPRA). THE TRIBUNAL FOLLOWING THE JUDGME NT OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT V MADHUKAR K. INAMDAR (HUF) 318 ITR 149 AND CIT V PITHWA ENGINEERING WORKS 276 ITR 519 (BOM) FO UND IT APPROPRIATE TO DISMISS THE DEPARTMENTAL APPEAL ON THE GROUND THAT TAX EFFECT IS LESS THAN RS 3 LAKHS, EVEN IN A CASE WHERE THE DEPARTMENTAL APPE ALS WAS FILED PRIOR TO THE DATE OF THE CBDT INSTRUCTION DATED 9.2.2011 (SUPRA) . THE FOLLOWING DISCUSSION IN THE ORDER IS WORTHY OF NOTICE: 5. WE HEARD BOTH THE PARTIES. THE CASE OF CIT VS. CHHAJER PACKAGING & PLASTICS PVT. LTD. 300 ITR RELIED ON BY THE DR IS D ISTINGUISHABLE FROM THE FACTS OF THE PRESENT CASE. AT PARA 12 PAGE 184 OF THE DEC ISION IN THE CASE OF CHHAJER PACKAGING & PLASTICS PVT. LTD. IT HAS BEEN HELD AS FOLLOWS: OTHERWISE ALSO, PARAGRAPH OF THIS CIRCULAR ITSELF SAVES CERTAIN APPEALS FROM BEING OBSTRUCTED DUE TO FINANCIAL LIMITS. PARAGRAPH 3 READS: ITA NO.646/PN/2007 (ASSESSMENT YEAR: 2003-04) SHRI MAHENDRA JAVERILAL JAIN, THE BOARD HAS ALSO DECIDED THAT IN CASES INVOLVING SUBSTANTIAL QUESTION OF LAW OF IMPORTANCE AS WELL AS IN CASES W HERE THE SAME QUESTION OF LAW WILL REPEATEDLY ARISE, EITHER IN TH E CASE CONCERNED OR IN SIMILAR CASES, SHOULD BE SEPARATELY CONSIDERED ON T HE MERITS WITHOUT BEING HINDERED BY THE MONETARY LIMITS. IT IS EVIDENT THAT, WHENEVER THERE IS A SUBSTANTIAL QUESTION OF LAW, OR QUESTION OF LAW WHICH IS LIKELY TO RECUR IN FUTURE, THE DEPARTMENT IS NOT PROHIBITED FROM FILING AND PURSUING APPEALS. WE BEL IEVE THAT THE SAVING CLAUSE SAVES THE PRESENT APPEAL SINCE IT INVOLVES A QUESTION OF LAW REGARDING INTERPRETATION OF SECTION 275(1)(C) OF TH E ACT, AND MORE PARTICULARLY THE ASPECT OF MANNER IN WHICH THE LIMI TATION SHOULD BE COMPUTED IN THE LIGHT OF THE SAID PROVISIONS. WE HA VE, THEREFORE, PROCEEDED TO HEAR THE ADVOCATES ON THE MERITS. IN OUR OPINION, THE CASE OF CIT V CHHAJER WAS WITH RESPECT OF INTERPRETATION OF 275(1)(C) OF THE ACT AND HENCE CA ME UNDER THE EXCEPTION CLAUSE UNDER THE CBDT CIRCULAR AND WAS NO T OBSTRUCTED BY THE MONETARY LIMIT OF RS 3 LAKHS PRESCRIBED BY THE CIRCULAR. THEREFORE THE CASE OF 300 ITR 180 IS INAPPLICABLE TO THE FACT S OF OUR CASE. FURTHER INSTRUCTION NO. 5 DT. 15.5.2008 FIXING THE MONETARY LIMIT AT RS 2 LAKHS IS SIMILAR TO THAT OF INSTRUCTION NO. 3 DAT ED 9.2.2011 WHICH THE ASSESSEE HAS BROUGHT TO OUR NOTICE IN SUPPORT OF HI S CONTENTION. SINCE BOTH THE INSTRUCTION NOS. 5 & 3 ARE IDENTICAL, THE RATIO OF THE DECISION IN THE CASE OF CIT V PITHWA ENGG. WORK WHICH DEALS WITH INSTRUCTION NO. 5 DT. 15.5.2008 SHALL EQUALLY APPLY TO THE PRES ENT CASE WHICH FALLS UNDER LNSTRUCTION NO. 3 DATED 9.2.2011. FOLLOWING THE RATIO OF THE DECISION IN THE CASE OF CIT V PITHWA ENGG. WORK WHE REIN IT HAS BEEN HELD THAT IN OUR VIEW, THE BOARDS CIRCULAR DT. 27 TH MARCH, 2000 IS VERY MUCH APPLICABLE EVEN TO THE OLD REFERENCES WHICH AR E STILL UNDECIDED, WE DISMISS THE DEPARTMENTAL APPEAL ON THE GROUND TH AT THE TAX EFFECT IS LESS THAN 3 LAKHS. 7. FOLLOWING THE AFORESAID PRECEDENT, THE CAPTIONED APPEALS FILED BY THE REVENUE ARE LIABLE TO BE DISMISSED IN VIEW OF CBDT INSTRUCTION NO. 3 DATED 9.2.2011 (SUPRA) AS THE TAX EFFECT WITH RESPECT TO THE QUANTUM OF RELIEF ALLOWED BY THE COMMISSIONER OF INCOME-TAX (APPEALS) IN EACH OF THE YEAR IS BELOW RS 3 LAKHS AND IT HAS NOT BEEN SHOWN THAT THE APPEALS FALL UNDER ANY OF THE EXCEPTIONS PROVIDED IN PARA 8 OF THE CBDT INSTR UCTION (SUPRA). WE ORDER ACCORDINGLY. 8. IN THE RESULT, APPEAL OF THE DEPARTMENT IS DI SMISSED. ORDER PRONOUNCED IN THE COURT ON 05-10 -2011. SD/- SD/- (I.C.SUDHIR) (D.KARUNAKARA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER PUNE, DATED: 05-10-2011 ITA NO.646/PN/2007 (ASSESSMENT YEAR: 2003-04) SHRI MAHENDRA JAVERILAL JAIN, COPY TO:- 1) ITO,WD 2(4), JALGAON 2) RESPONDENT 3) THE CIT(A)-II, NASHIK 4) THE CIT CONCERNED 5) THE DEPARTMENTAL REPRESENTATIVE, B BENCH, I.T .A.T., PUNE. BY ORDER //TRUE COPY// ASST. REGISTRAR, I.T.A.T., PUNE