ITO, Ward - 40(1), Kolkata, Kolkata V. Amitava Kejriwal, Kolkata

ITA 669/KOL/2011

• Counselvise Citation: 66923514 RSA 2011
• Duration Of Justice: 3 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-08-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2005-2006
• Appeal Filed On: 02-05-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D J MEHTA
• Keywords: Audit objection; Tax effect

Judgement Text

, , , , , , ,, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : KOLKATA [ . . . . . . . . , ,, , , ,, , . . . . . .. . ! ! ! ! , ' ' ' ' ] [BEFORE HONBLE SHRI B. R. MITTAL, JM & HONBLE SHRI SHRI S.V. MEHROTRA, AM] #$ #$ #$ #$ / I.T.A. NO. 669/KOL/2011 %& '() %& '() %& '() %& '()/ // / ASSESSMENT YEAR : 2005-06 INCOME TAX OFFICER, WARD-40(1) -VS.- AMITAVA KEJRIWAL KOLKATA. KOLKATA. [PAN : AFOPK 9211 N] [ +, +, +, +, /APPELLANT] [ -.+, -.+, -.+, -.+,/ // / RESPONDENT] +, +, +, +, / FOR THE APPELLANT : / // / /SHRI D. J. MEHTA -.+, -.+, -.+, -.+, / FOR THE RESPONDENT : NONE 0 /O R D E R [ . . . . . .. . ! ! ! ! , ] PER S.V. MEHROTRA, AM THE DEPARTMENT HAS FILED THIS APPEAL FOR ASSESSMENT YEAR 2005-06 AGAINST ORDER OF CIT(A)- XXXII, KOLKATA DATED 25.10.2010. 3. ASSESSING OFFICER HAD IMPOSED PENALTY UNDER SECT ION 271B AMOUNTING TO RS.42,576/- WHICH WAS DELETED BY LD. CIT(A). THE DEPARTMENT IS IN APP EAL BEFORE US. AT THE TIME OF HEARING, IT WAS POINTED OUT BY THE ASSESSEE THAT THE TAX EFFECT IN THIS APPEAL IS LESS THAN RS.3.00 LAKHS, THEREFORE, IN VIEW OF DECISION OF C.B.D.T. THE DEPARTMENT SHOULD NOT HAVE BEEN FILED BY THE APPEAL. 2. THIS APPEAL HAS BEEN FILED BY THE DEPARTMENT ON 02.05.2011, THEREFORE, IT IS GOVERNED BY INSTRUCTION NO.3/2011 (F. NO.279/MISC.142/2007-ITJ] DATED 09.02.2011 ISSUED BY C.B.D.T. IN REGARD TO FILING OF APPEALS, INTER ALIA, BEFORE I.T .A.T. THE MONETARY LIMIT IN REGARD TO TAX EFFECT LA ID DOWN IN THE SAID INSTRUCTION FOR FILING APPEAL BEFO RE THE TRIBUNAL IS RS.3.00 LAKHS. ADMITTEDLY, TAX EFFECT IN THE PRESENT APPEAL IS LESS THAN RS.3.00 L AKHS. [ITA NO. 669/KOL/2011] 2 4. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE P ARTIES. WE FIND THAT IN INSTRUCTION NO.3/2011, IN PARA 8, EXCEPTIONS HAVE BEEN PROVIDED WHERE APPEAL CAN BE PREFERRED BY THE DEPARTMENT EVEN IF TAX EFFECT IS LESS THAN RS.3.00 LAKHS. THE SAID PARA READS AS UNDER :- 8. ADVERSE JUDGMENTS RELATING TO THE FOLLOWING ISSUES SHOULD BE CONTESTED ON MERITS NOTWITHSTANDING THAT THE TAX EFFECT ENTAILED IS LESS THAN THE MONET ARY LIMITS SPECIFIED IN PARA 3 ABOVE OR THERE IS NO TAX EFFECT. A. WHERE THE CONSTITUTIONAL VALIDITY OF THE PROVISIONS OF AN ACT OR RULE ARE UNDER CHALLENGE, OR B. WHERE BOARD'S ORDER, NOTIFICATION, INSTRUCTION OR C IRCULAR HAS BEEN HELD TO BE ILLEGAL OR ULTRA VIRES, OR C. WHERE REVENUE AUDIT OBJECTION IN THE CASE HAS BEEN ACCEPTED BY THE DEPARTMENT. ADMITTEDLY, THE PRESENT APPEAL DOES NOT FALL UNDER ANY OF THE ABOVE MENTIONED EXCEPTIONS. THEREFORE, THE APPEAL PREFERRED BY THE DEPARTMENT I S HIT BY INSTRUCTION NO.3/2011 DATED 09.02.2011. 5. IT IS SETTLED LAW THAT IN VIEW OF THE DECISION O F HONBLE APEX COURT IN THE CASE OF COMMISSIONER OF CUSTOMS VS. INDIAN OIL CORPORATION LTD. 267 ITR 272 (SC), THE DEPARTMENT CAN NOT BE PERMITTED TO TAKE A STAND CONTRARY TO THE IN STRUCTIONS ISSUED BY THE BOARD. 6. WE FIND THAT THE TRIBUNAL VIDE ITS ORDER DATED 1 1.04.2011 IN THE CASE OF ITO VS. SMT. NILIMA SINGH IN ITA NO.1629/KOL/2010 HAS, INTER ALIA, OBSE RVED AS UNDER :- 2 IT IS OBSERVED THAT THE TAX EFFECT IN THIS APPEA L IS LESS THAN RS.2 LAKHS. HENCE, THE LD. D.R. WAS ASKED AS TO WHETHER ANY OF THE EXC EPTIONS LAID DOWN IN PARA 8 OF CBDT CIRCULAR NO. 279/MISC.-64/05-ITJ DATED 24.10.0 5 READ WITH INSTRUCTION NO.5 OF 2008 DATED 15.05.2008 ARE APPLICABLE TO CON SIDER THIS APPEAL ON MERITS. THE DEPARTMENT IN ABOVE INSTRUCTION DATED 15.05.200 8 HAS SPECIFIED 3 GROUNDS IN PARA 8 STATING THAT THE APPEAL COULD BE FILED BEFOR E THE TRIBUNAL WHERE THE TAX EFFECT IS LESS THAN RS.2.00 LAKHS ONLY AND THE SAME ARE AS UNDER :- (A) WHERE THE CONSTITUTIONAL VALIDITY OF THE PROVIS IONS OF AN ACT OR RULE ARE UNDER CHALLENGE. (B) WHERE BOARDS ORDER, NOTIFICATION, INSTRUCTION OF CIRCULAR HAS BEEN HELD TO BE ILLEGAL OR ULTRA VIRES. (C) WHERE REVENUE AUDIT OBJECTION IN THE CASE HAS B EEN ACCEPTED BY THE DEPARTMENT. 3. LD. D.R. FAIRLY CONCEDED THAT NONE OF THE ABOVE CONDITIONS ARE APPLICABLE IN RESPECT OF THIS APPEAL. 4. THERE IS NO DISPUTE ON THE FACT THAT THE CBDT VI DE INSTRUCTION NO. 2/2005 DATED 24.10.2005, ISSUED GUIDELINES TO THE REVENUE AUTHORITIES WITH REGARD TO FILING OF APPEALS BEFORE THE TRIBUNAL, HIGH COURT AND THE SUPREME COURT. FROM THE SAID INSTRUCTIONS, IT IS EVIDENT THAT SINCE 1987, THE CB DT HAS BEEN INSTRUCTING ITS OFFICERS NOT TO FILE THE APPEAL WHERE THE TAX EFFEC T IS BELOW CERTAIN MONETARY LIMITS. VIDE INSTRUCTION NO. 1903 DATED 28.10.1992 THE MONE TARY LIMITS WAS REVISED [ITA NO. 669/KOL/2011] 3 UPWARD AND THE OFFICERS WERE DIRECTED NOT TO FILE A PPEAL BEFORE THE INCOME TAX APPELLATE TRIBUNAL WHERE THE TAX EFFECT WAS BELOW R S.25,000/-. THE ABOVE MONETARY LIMIT WAS FURTHER REVISED UPWARD BY INSTRU CTION NO.1979 DATED 27.3.2000 AND THE OFFICERS WERE DIRECTED NOT TO FIL E THE APPEAL TO ITAT WHERE THE TAX EFFECT IS BELOW RS. 1,00,000/-. THEREAFTER IN P ARTIAL MODIFICATION OF THE ABOVE INSTRUCTION, THE BOARD VIDE INSTRUCTION NO.2/2005 D ATED 24.10.2005 HAS FURTHER RAISED THE ABOVE MONETARY LIMIT TO RS.2,00,000/- WI TH THE SAME DIRECTIONS. THUS THE C.B.D.T SINCE 1987 HAS NOT ONLY TAKEN A CONSIST ENT APPROACH OF INSTRUCTING ITS OFFICERS FOR NOT FILING THE APPEAL WHERE THE TAX EF FECT IS BELOW THE MONETARY LIMIT, BUT SUCH MONETARY LIMIT IS ALSO REVISED UPWARD FROM TIME TO TIME. THE CIRCULAR UNDER INSTRUCTION NO.1979 DATED 27-3-2000 WAS CONSI DERED BY THE BOMBAY HIGH COURT IN THE CASE OF CAMCO COLOUR CO. 254 ITR 565 A ND THEIR LORDSHIPS HELD AT PAGE 568 AS UNDER :- IT APPEARS THAT DESPITE THE ABOVE CIRCULAR, THE RE VENUE HAS CHOSEN TO FILE THE PRESENT APPEAL KNOWINGLY FULLY WELL THAT THE CORRID ORS OF THE COURTS ARE FLOODED WITH PENDING LITIGATIONS. THE PRESENTATION OF THIS APPEAL IS QUITE CONTRARY TO THE INSTRUCTION ISSUED IN THE CIRCULAR, WHICH IS BINDIN G ON THE REVENUE. IN THE ABOVE VIEW OF THE MATTER, CONSIDERING THE IN STRUCTIONS ISSUED BY THE CENTRAL BOARD OF DIRECT TAXES, WE ARE SATISFIED THAT THE BO ARD HAS TAKEN A POLICY DECISION NOT TO FILE APPEAL IN A TYPE OF CASE IN HAND AND TH E SAME IS BINDING ON THE REVENUE (APPELLANT HEREIN). IN THE RESULT, WE DISMISS THIS APPEAL ON THIS COUNT IN LIMINE WITH NO ORDER AS TO COSTS. 5. WE FIND THAT RECENTLY THE APEX COURT HAS CONSID ERED THE EFFECT OF CIRCULAR ISSUED BY THE CBDT IN THE CASE OF COMMISSIONER OF C USTOMS VS. INDIAN OIL CORPORATION LTD. 267 ITR 272. THEIR LORDSHIPS EXAMI NED THE EARLIER DECISIONS OF THE APEX COURT WITH REGARD TO BINDING OF THE CIRCUL AR AND LAID DOWN THE FOLLOWING PRINCIPLES AT PAGE 277 OF THE REPORTS- THE PRINCIPALS LAID DOWN BY ALL THESE DECISIONS AR E- 1) ALTHOUGH A CIRCULAR IS NOT BINDING ON A COURT ON AN ASSESSEE, IT IS NOT OPEN TO THE REVENUE TO RAISE A CONTENTION THAT IS CONTRARY TO A BINDING CIRCULAR BY THE BOARD. WHEN A CIRCULAR REMAINS IN OPERATION, THE RE VENUE IS BOUND BY IT AND CANNOT BE ALLOWED TO PLEAD THAT IT IS NOT VALID NOR THAT IT IS CONTRARY TO THE TERMS OF THE STATUTE. 2) DESPITE THE DECISION OF THIS COURT, THE DEPARTME NT CANNOT BE PERMITTED TO TAKE A STAND CONTRARY TO THE INSTRUCTIONS ISSUED BY THE BO ARD. (3) A SHOW CAUSE NOTICE AND DEMAND CONTRARY TO EXI STING CIRCULARS OF THE BOARD ARE AB INITIO VOID. (4) IT IS NOT OPEN TO THE REVENUE TO ADVANCE AN ARG UMENT OR FILE AN APPEAL CONTRARY TO THE CIRCULARS. 6. IN VIEW OF THE ABOVE AND CONSIDERING THE CBDTS CIRCULAR F. NO. 279/MISC.-64/05-ITJ DATED 24 TH OCTOBER, 2005 READ WITH INSTRUCTION NO. 2/2005 DATED 24 TH OCTOBER, 2005 AND INSTRUCTION NO. 5/2008 DATED 15. 05.2008, WE HOLD THAT THE APPEAL FILED BY THE DEPARTMENT IS CONTRARY TO THE SAID CIRCULARS/ [ITA NO. 669/KOL/2011] 4 INSTRUCTIONS OF THE CBDT. ACCORDINGLY, THIS IS NOT ADMITTED AND IS BEING DISMISSED IN LIMINE. 9. IN VIEW OF INSTRUCTION DATED 09.02.2011, WE DISM ISS THE APPEAL OF THE DEPARTMENT. 0 0 0 0 '1 '1 '1 '1 2 22 2 1% 1% 1% 1% 3 3 3 3 4 4 4 4 5' 5' 5' 5' ORDER PRONOUNCED IN THE OPEN COURT ON 10. 08. 2011. SD/- SD/- [ . . , ] [ . . ! , ' ] [ B. R. MITTAL ] [ S.V. MEHROTRA ] JUDICIAL MEMBER ACCOUNTAN T MEMBER 5' / DATED : 10 TH AUGUST, 2011. 0 6 -7 87(9 - COPY OF THE ORDER FORWARDED TO: 1. ' /APPELLANT- INCOME TAX OFFICER/WARD-40(1), 4 TH FLOOR, PODDAR COURT, 18, RABINDRA SARAN I, KOLKATA-700 001. 2 -.+, / RESPONDENT : AMITAVA KEJRIWAL, P-312, CIT ROAD, S CHEME VI-M, KOLKATA-700 054. 3. 0% / CIT 4. 0% ( )/ CIT(A) 5. '3 -% / DR, KOLKATA BENCHES, KOLKATA [ .7 - / TRUE COPY] 0%1 / BY ORDER : / #; /DEPUTY/ASSTT. REGISTRAR . [KKC '<= %>; ?' /SR.PS]