ITO Ward-3(2), Jaipur, Jaipur V. Shri Kedar Jahalani Prop. M/s. K.J. Gems, B-3, Lal Ji Ka Bagh, Moti Lal Atal Road, Jaipur, Jaipur

ITA 650/JPR/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 3152 (ITAT-JAIPUR)
• Duration Of Justice: 10 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-03-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2007-2008
• Appeal Filed On: 03-05-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K C GUPTA
• Assessee Lawyers: R A KHANDELWAL
• Keywords: Audit objection; Tax effect
• Section: 148

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S,B JAIPUR JH FOT; IKY JKO] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS[KK LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM & SHRI VIKRAM SINGH YADAV, AM VK;DJ VIHY LA-@ ITA. NO. 650/JP/2019 FU/KZKJ.K O'K Z@ ASSESSMENT YEARS : 2007-08 THE ITO, WARD-3(2), JAIPUR. CUKE VS. SHRI KEDAR JHALANI PROP. M/S K.J. GEMS, B-3, LAL JI BAGH, MOTI LAL ATAL ROAD, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: ABTPJ 9772 G VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT JKTLO DH VKSJ LS @ REVENUE BY : SHRI K.C. GUPTA (JCIT) FU/KZKFJRH DH VKSJ L S@ ASSESSEE BY : SHRI R.A. KHANDELWAL (C.A.) LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 12/03/2020 MN?KKS'K.KK DH RKJH[ K@ DATE OF PRONOUNCEMENT : 12/03/2020 VKNS'K@ ORDER PER: VIKRAM SINGH YADAV, A.M. THIS APPEAL BY THE DEPARTMENT IS DIRECTED AGAINST T HE ORDER DATED 18.02.2019 OF LD. CIT(A)-I, JAIPUR FOR THE ASSESSME NT YEAR 2007-08. AS PER THE GROUNDS OF APPEAL, THE TAX EFFECT CALCULATE D BY THE AO IN RESPECT OF THE RELIEF GRANTED BY THE LD. CIT (APPEA LS) WHICH HAS BEEN CHALLENGED IN THE PRESENT APPEAL IS RS. 3,47,763/-. ITA NO. 650/JP/2019 ITO VS. SHRI KEDAR JHALANI 2 2. WE HAVE HEARD THE LD. D/R AND CONSIDERED THE RE LEVANT MATERIAL ON RECORD. AT THE OUTSET, WE NOTE THAT THE TAX EFFE CT IN THIS APPEAL IS NOT EXCEEDING THE MONETARY LIMIT AS REVISED BY THE CBDT VIDE CIRCULAR DATED 08.08.2019 FOR THE PURPOSE OF FILING OF APPEAL BY T HE DEPARTMENT BEFORE THE INCOME TAX APPELLATE TRIBUNAL FROM RS. 20,00,00 0/- TO RS. 50,00,000/-. FOR READY REFERENCE, WE REPRODUCE THE CBDT CIRCULAR NO. 17 OF 2019 DATED 08.08.2019 AS UNDER :- FURTHER ENHANCEMENT OF MONETARY LIMITS FOR FILING O F APPEALS BY THE DEPARTMENT BEFORE INCOME TAX APPELLATE TRIBUNAL , HIGH COURTS AND SLPS/APPEALS BEFORE SUPREME COURT - AMEN DMENT TO CIRCULAR 3 OF 2018 - MEASURES FOR REDUCING LITIGATI ON. CIRCULAR NO. 3/2018 DATED 11TH JULY 2018 HAS BEEN R EPLACED BY CIRCULAR NO. 17/2019 DATED 8TH AUGUST 2019 TO ENHAN CE MONETARY LIMITS FOR FILING OF APPEALS BY THE DEPARTMENT BEFO RE INCOME TAX APPELLATE TRIBUNAL, HIGH COURTS AND SLPS/APPEALS BE FORE SUPREME COURT FOR REDUCING LITIGATION. APPEALS/SLPS IN INCOME- TAX MATTERS MONETARY LIMIT (RS.) (PREVIOUS LIMIT) MONETARY LIMIT (RS.) (REVISED LIMIT) BEFORE APPELLATE TRIBUNAL 20,00,000 50,00,000 BEFORE HIGH COURT 50,00,000 1,00,00,000 BEFORE SUPREME COURT 1,00,00,000 2,00,00,000 THE ASSESSING OFFICER SHALL CALCULATE THE TAX EFFEC T SEPARATELY FOR EVERY ASSESSMENT YEAR IN RESPECT OF THE DISPUTED IS SUES IN THE CASE OF EVERY ASSESSEE. IF, IN THE CASE OF AN ASSES SEE, THE DISPUTED ISSUES ARISE IN MORE THAN ONE ASSESSMENT Y EAR, APPEAL CAN BE FILED IN RESPECT OF SUCH ASSESSMENT YEAR OR YEARS IN WHICH ITA NO. 650/JP/2019 ITO VS. SHRI KEDAR JHALANI 3 THE TAX EFFECT IN RESPECT OF THE DISPUTED ISSUES EX CEEDS THE MONETARY LIMIT. NO APPEAL SHALL BE FILED IN RESPECT OF AN ASSESSMENT YEAR OR YEARS IN WHICH THE TAX EFFECT IS LESS THAN THE MONETARY LIMIT. FURTHER, EVEN IN THE CASE OF COMPOSITE ORDER OF ANY HIGH COURT OR APPELLATE AUTHORITY WHICH INVOLVES MORE THAN ONE ASSESSMENT YEAR AND COMMON ISSUES IN MORE THAN ONE ASSESSMENT YEAR, NO APPEAL SHALL BE FILED IN RESPECT OF AN ASSESSMENT Y EAR OR YEARS IN WHICH THE TAX EFFECT IS LESS THAN THE MONETARY LIMI T. IN CASE WHERE A COMPOSITE ORDER/ JUDGMENT INVOLVES MORE THAN ONE ASSESSEE, EACH ASSESSEE SHALL BE DEALT WITH SEPARATELY. ACCORDINGLY, THE APPEAL OF THE DEPARTMENT IS NOT MA INTAINABLE BEING MONETARY LIMIT IS LESS THAN/NOT EXCEEDING RS. 50,00 ,000/-. 3. THE LD DR HAS HOWEVER SUBMITTED THAT THE CASE FA LLS UNDER EXCEPTION AS PER CLAUSE 10(E) OF CIRCULAR NO. 03 OF 2018 DATED 20-08.2018 AS THE CASE WAS REOPENED U/S 148 BASIS I NFORMATION RECEIVED FROM INVESTIGATION WING, MUMBAI AND THEREF ORE, THE PRESENT APPEAL HAS BEEN PREFERRED BY THE REVENUE AND THE SA ME SHOULD THEREFORE BE HEARD ON MERITS AND NOT DISMISSED ON A CCOUNT OF LOW TAX EFFECT. 4. IN THIS REGARD, WE REFER TO THE CBDT DIRECTIVE D ATED 20TH AUGUST 2018 BY WHICH IT HAS CARVED OUT SEVERAL EXCEPTIONS TO ITS CIRCULAR NO. 3 OF 2018 DATED 11TH JULY 2018 RELATING TO THE WITHDR AWAL/ NON-FILING OF APPEAL BY THE DEPARTMENT IN LOW-TAX EFFECT APPEALS. THE CBDT HAS SPECIFIED SEVERAL INSTANCES WHERE APPEALS HAVE TO B E FILED AND PROSECUTED DESPITE THEIR LOW-TAX EFFECT. THE CONTEN TS THEREOF READ AS UNDER: ITA NO. 650/JP/2019 ITO VS. SHRI KEDAR JHALANI 4 ALL THE PRINCIPAL CHIEF COMMISSIONERS OF INCOME TA X SUBJECT: AMENDMENT TO PARA 10 OF THE CIRCULAR NO. 3 OF 2018 DATED 11.07.2018-REG: MADAM/SIR, KINDLY REFER TO THE ABOVE. 2. THE MONETARY LIMITS FOR FILING OF APPEALS BY THE DEPARTMENT BEFORE INCOME TAX APPELLATE TRIBUNAL, HIGH COURTS A ND SLPS/ APPEALS BEFORE SUPREME COURT HAVE BEEN REVISED BY B OARDS CIRCULAR NO. 3 OF 2018 DATED 11.07.2018. 3. PARA 10 OF THE SAID CIRCULAR PROVIDES THAT ADVER SE JUDGMENTS RELATING TO THE ISSUES ENUMERATED IN THE SAID PARA SHOULD BE CONTESTED ON MERITS NOTWITHSTANDING THAT THE TAX EF FECT ENTAILED IS LESS THAN THE MONETARY LIMITS SPECIFIED IN PARA 3 T HEREOF OR THERE IS NO TAX EFFECT. PARA 10 OF THE CIRCULAR NO. 3 OF 2018 DATED 11.07.2018 IS HEREBY AMENDED AS UNDER: 10. ADVERSE JUDGMENTS RELATING TO THE FOLLOWING IS SUES 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 VIRES, OR (C) WHERE REVENUE AUDIT OBJECTION IN THE CASE HAS B EEN ACCEPTED BY THE DEPARTMENT, OR ITA NO. 650/JP/2019 ITO VS. SHRI KEDAR JHALANI 5 (D) WHERE ADDITION RELATES TO UNDISCLOSED FOREIGN I NCOME/ UNDISCLOSED FOREIGN ASSETS (INCLUDING FINANCIAL ASS ETS)/ UNDISCLOSED FOREIGN BANK ACCOUNT. (E) WHERE ADDITION IS BASED ON INFORMATION RECEIVED FRO M EXTERNAL SOURCES IN THE NATURE OF LAW ENFORCEMENT AGENCIES SUCH AS CBI/ ED/ DRI/ SFIO/ DIRECTORATE GENERAL OF GST INTELLIGENCE (DGGI). (F) CASES WHERE PROSECUTION HAS BEEN FILED BY THE D EPARTMENT AND IS PENDING IN THE COURT. 4. THE SAID MODIFICATION SHALL COME INTO EFFECT FRO M THE DATE OF ISSUE OF THIS LETTER. 5. THE SAME MAY BE BROUGHT TO THE KNOWLEDGE OF ALL OFFICERS WORKING IN YOUR REGION. 6. THIS ISSUES WITH THE APPROVAL OF THE HONBLE FIN ANCE MINISTER. 5. THE EXCEPTION 10(E) WHICH HAS BEEN REFERRED BY T HE LD DR RELATES TO CASES WHERE ADDITION IS BASED ON INFORMATION REC EIVED FROM EXTERNAL SOURCES IN THE NATURE OF LAW ENFORCEMENT AGENCIES S UCH AS CBI/ ED/ DRI/ SFIO/ DIRECTORATE GENERAL OF GST INTELLIGENCE (DGGI). BOTH ADMINISTRATIVELY AND FUNCTIONALLY, THERE CANNOT BE ANY DISPUTE THAT THE INVESTIGATION WING OF INCOME TAX DEPARTMENT IS PART OF INCOME TAX DEPARTMENT AND IS THEREFORE CLEARLY NOT AN EXTERNAL LAW ENFORCEMENT AGENCY AND THAT TOO, AS SPECIFIED IN THE AFORESAID EXCEPTION. THEREFORE, IN THE INSTANT CASE, WHERE THE MATTER HAS BEEN REOP ENED BASED ON INFORMATION RECEIVED FROM INVESTIGATION WING AND TH E ASSESSMENT HAS BEEN COMPLETED BY THE ASSESSING OFFICER WHERE THE M ATTER UNDER APPEAL HAS TAX EFFECT LESS THAN THE PRESCRIBED LIMIT, IT W ILL CONTINUE TO BE ITA NO. 650/JP/2019 ITO VS. SHRI KEDAR JHALANI 6 GOVERNED BY LOW TAX EFFECT CIRCULAR ISSUED BY THE C BDT WHICH IS BINDING ON THE REVENUE. 6. IN LIGHT OF THE SAME, THE PRESENT APPEAL FILED B Y THE DEPARTMENT IS DISMISSED ON ACCOUNT OF LOW TAX EFFECT GIVEN THE MATTER NOT COVERED BY ANY EXCEPTIONS SO SPECIFIED. IN THE RESULT, APPEAL OF THE DEPARTMENT IS DISMISS ED. ORDER PRONOUNCED IN THE OPEN COURT ON 12/03/2020. SD/- SD/- FOT; IKY JKO FOE FLAG ;KNO (VIJAY PAL RAO) (VIKRAM SINGH YADAV) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 12/03/2020. * SANTOSH VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- ITO, WARD-3(2), JAIPUR. 2. IZR;FKHZ@ THE RESPONDENT- SHRI KEDAR JHALANI, JAIPUR. 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDR@ CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR. 6. XKMZ QKBZY@ GUARD FILE { ITA NO. 650/JP/2019} VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR