ACIT, Circle- 18(2), New Delhi V. Noida Medicare Centre Ltd., New Delhi

ITA 6881/DEL/2017

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 8730 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 1 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-01-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Assessment Year: 2013-2014
• Appeal Filed On: 15-11-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: INDOR BHUSHAN PRASAD
• Keywords: Tax effect
• Section: 143(3); 37(1); 268A; 43; 22; 37

Judgement Text

PAGE | 1 INCOME TAX APPELLATE TRIBUNAL DELHI BENCH E: NEW DELHI BEFORE SHRI H.S.SIDHU, JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER (THROUGH VIDEO CONFERENCING) ITA NO. 6881 /DEL/2017 (ASSESSMENT YEAR: 2013 - 14) ACIT(E), CIRCLE - 18 ( 2 ), NEW DELHI VS. NOIDA MEDICARE CENTRE LTD, VIMHANS, 1, INSTITUTIONAL AREA, NEHRU NAGAR, NEW DELHI PAN: AAACN0980B (APPELLANT) (RESPONDENT) REVENUE BY : SHRI BHOPAL SINGH, SR. DR ASSESSEE BY: SHRI INDOR BHUSHAN PRASAD, ADV DATE OF HEARING 11/01/2020 DATE OF PRONOUNCEMENT 1 1 /01/2021 O R D E R PER PRASHANT MAHARISHI, A. M. 1. ITA NO. 6881/DEL/2017 FOR ASSESSMENT YEAR 2013 - 14 IS FILED BY THE LD ACIT, CIRCLE - 18(2), NEW DELHI AGAINST THE ORDER OF THE LD CIT(A) - 6, DELHI DATED 11.09.2017, WHEREIN, FOLLOWING GROUNDS OF APPEAL ARE RAISED: - 1. WHETHER ON FACTS AND IN CIRCUMSTANCES OF THE CASE, THE LD.CIT(A) IS LEGALLY JUSTIFIED IN DELETING DISALLOWANCE OF RS. 23,63,350/ - AND RS. 34,42,677/ - U/S 37 (1) OF THE ACT ON ACCOUNT OF ADVERTISEMENT & PUBLICITY EXPENSES' AND REPAIR & MAINTENANCE AND PRINTING & STATIONERY EXPENSES RESPECTIVELY BY IGNORING THE FACT THAT DURING ASSESSMENT PROCEEDING THE ASSESSEE COULD NOT DISCHARGE ITS INITIAL ONUS EVEN AFTER PROVIDING SUFFICIENT OPPORTUNITIES OF BEING HEARD BY NOT FURNISHING COMPLETE DETAIL AND DOCUMENTS TO PROVE THAT THE EXPENSES WERE INCURRED WHOLLY AND EXCLUSIVELY FOR BUSINESS PURPOSE OF THE ASSESSEE? 2. WHETHER ON FACTS AND IN CIRCUMSTANCES OF THE CASE, THE LD.CIT(A) IS LEGALLY JUSTIFIED IN ALLOWING RELIEF TO THE ASSESSEE U/S 37 (1) OF THE ACT ON THE BASIS OF ITS EARLIER ORDER IN THE ASSESSEE'S OWN CASE DESPITE THE FACT THAT PRINCIPLE OF RES - JUDICATA IS NOT APPLICABLE TO INCOME TAX PROCEEDINGS AS EACH ASSESSMENT YEAR IS A SEPARATE YEAR? 2. THE ASSESSEE IS A COMPA NY RUNNING A HOSPITAL. IT FILED ITS RETURN OF INCOME DECLARING INCOME OF RS. 3 , 38 , 43 , 817/ - ON 01.12.2013 WHICH WAS ASSESSED BY ORDER U/S 143(3) OF THE ACT BY THE ORDER DATED 28.03.2016, WHEREIN, THE TOTAL INCOME OF THE ASSESSEE WAS ASSE SSE D AT RS. 4 , 22 , 45 , 158/ - MAKING CERTAIN DISALLOWANCES. THE ASSESSEE PREFERRED APPEAL BEFORE THE LD CIT(A) WHICH WAS PARTLY ALLOWED AND PAGE | 2 THEREFORE, THE LD AO IS IN APPEAL BEFORE US CONTESTING THE DELETION OF DISALLOWANCES OF RS. 23 , 63 , 350/ - AND RS. 34 , 42 , 677/ - U/S 37(1) OF THE ACT. 3. AT THE TIME OF HEARING IT WAS SUBMITTED THAT THE ASSESSEE COMPANY HAS UNDERGONE THE PROCESS OF CORPORATE INSOLVENCY RESOLUTION PROCESS UNDER THE PROVISION OF INSOLVENCY AND BANKRUPTCY CODE 2016 AND THEREFORE, NO PROCEEDINGS UNDER THE COMPANIES ACT C AN CONTINUE TILL THE RESOLUTION PROCESS CONTINUES. 4. THE LD DR WAS ALSO QUESTIONED THAT THE TAX EFFECT IN THE ABOVE APPEAL IS ONLY RS. 4266410/ - AS MENTIONED IN PARA NO. 7 IN THE CAPTION OF THE ORDER OF THE LD CIT(A), THEREFORE, IT IS A LOW TAX EFFECT. 5. WE H AVE CAREFULLY CONSIDERED THE RIVAL CONTENTION AND FIND THAT THE APPEAL IS LOW TAX EFFECT. 6. WE FIND THAT THE CBDT VIDE CIRCULAR NO. 17/2019 DATED 08 TH AUGUST 2019 HAS ENHANCED THE MONETARY LIMIT FOR FILING THE APPEAL BY THE DEPARTMENT BEFORE INCOME TAX APPE LLATE TRIBUNAL, HONBLE HIGH COURTS AND HONBLE SUPREME COURT. THE RELEVANT PARA OF THE AFORESAID CIRCULAR IS REPRODUCED AS UNDER : - 2. AS A STEP TOWARDS FURTHER MANAGEMENT OF LITIGATION, IT HAS BEEN DECIDED BY THE BOARD THAT MONETARY LIMITS FOR FILIN G OF APPEALS IN INCOME - TAX CASES BE ENHANCED FURTHER THROUGH AMENDMENT IN PARA 3 OF THE CIRCULAR MENTIONED ABOVE AND ACCORDINGLY, THE TABLE FOR MONETARY LIMITS SPECIFIED IN PARA 3 OF THE CIRCULAR SHALL READ AS FOLLOWS: S.NO. APPEALS/SLPS IN INCOME - TAX MATTERS MONETARY LIMIT (RS.) 1. BEFORE APPELLATE TRIBUNAL 50.00,000 2. BEFORE HIGH COURT 1.00.00.000 3. BEFORE SUPREME COURT 2.00,00.000 3. FURTHER, WITH A VIEW TO PROVIDE PARITY IN FILING OF APPEALS IN SCENARIOS WHERE SEPARATE ORDER IS PASSED BY HIGHER APPELLATE AUTHORITIES FOR EACH ASSESSMENT YEAR VIS - A - VIS WHERE COMPOSITE ORDER FOR MORE THAN ONE ASSESSMENT YEARS IS PASSED, PARA 5 OF THE CIRCULAR IS SUBSTITUTED BY THE FOLLOWING PARA: '5. THE ASSESSING OFFICER SHALL CALCULATE THE TAX EFFECT SEPARA TELY FOR EVERY ASSESSMENT YEAR IN RESPECT OF THE DISPUTED ISSUES IN THE CASE OF EVERY ASSESSEE. IF, IN THE CASE OF AN ASSESSEE. THE DISPUTED ISSUES ARISE IN MORE THAN ONE ASSESSMENT YEAR, APPEAL CAN BE FILED IN RESPECT OF SUCH ASSESSMENT YEAR OR YEARS IN W HICH THE TAX EFFECT IN RESPECT OF THE DISPUTED ISSUES EXCEEDS THE MONETARY' LIMIT SPECIFIED IN PARA 3. NO APPEAL SHALL BE FILED IN RESPECT OF AN ASSESSMENT YEAR OR Y EARS IN WHICH THE TAX EFFECT IS LESS THAN THE MONETARY LIMIT SPECIFIED IN PARA 3. 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 YEAR OR YEARS IN WHICH THE T AX EFFECT IS LESS THAN THE MONETARY LIMIT SPECIFIED IN PARA 3. IN CASE WHERE A COMPOSITE ORDER/ JUDGEMENT INVOLVES MORE THAN ONE ASSESSEE. EACH ASSESSEE SHALL BE DEALT WITH SEPARATELY. PAGE | 3 4. THE SAID MODIFICATIONS SHALL COME INTO EFFECT FROM THE DATE OF ISSU E OF THIS CIRCULAR. 5. THE SAME MAY BE BROUGHT TO THE NOTICE OF ALL CONCERNED. 6. THIS ISSUES UNDER SECTION 268A OF THE INCOME - TAX ACT, 1961. 7. WE FIND THAT THE TAX EFFECT INVOLVES IN THE APPEAL OF THE REVENUE IS BELOW RS. 50 LAKHS. THERE IS NO DISPUTE THAT THE BOARDS INSTRUCTIONS OR DIRECTIONS ISSUED TO THE INCOME - TAX AUTHORITIES ARE BINDING ON THOSE AUTHORITIES, THEREFORE, THE DEPARTMENT SHOULD HAVE WITHDRAWN/NOT PRESSED THE PRESENT APPEAL IN VIEW OF THE AFORESAID INSTRUCTION SINCE THE TAX EFFECT IN T HE INSTANT APPEAL IS LESS THAN THE AMOUNT OF RS. 50 LAKHS. THE ISSUE OF APPLICABILITY OF THE ABOVE CIRCULAR TO PENDING APPEALS HAS BEEN DECIDED BY THE COORDINATE BENCH IN DINESH MADHAVLAL PATEL [TS - 469 - ITAT - 2019(AHD)] 2019 - TIOL - 1556 - ITAT - AHM DATED 14 TH AUGUST, 2019 . 8. IN VIEW OF THE ABOVE, CIRCULAR NO. 17/2019 DATED 08/08/2019 WILL APPLY TO ALL PENDING APPEALS. THEREFORE THE PRECEDENT, IT IS HELD THAT THE APPEAL IS NOT MAINTAINABLE IN THE INSTANT CASE AS THE TAX EFFECT IS LESS THAN RS. 50 LAKHS . ACCORDINGLY, IT IS HELD THAT APPEAL FILED BY THE REVENUE IS NOT MAINTAINABLE. WE ALSO HASTENED TO ADD THAT CERTAIN TIMES INSTANCES STATED IN PARA NO. 10 OF THE CBDT CIRCULAR NO. 3/2018 DATED 11.07.2018 IS NOT DISCERNABLE FROM THE ASSESSMENT AND APPELLATE ORDERS, THEREFORE, IN SUCH CASES, WE ALSO GIVE LIBERTY TO REVENUE THAT IF SUCH INSTANCES COMES TO THEIR NOTICE THAN, REVENUE MAY FILE MISCELLANEOUS APPLICATION WITH SUCH EVIDENCES. 9. IN THE RESULT, APPEAL FILED BY THE REVENUE IS DISMISSED. ORDER PRONOUNC ED IN THE OPEN COURT ON 1 1 /01/2021. - SD/ - - SD/ - (H.S.SIDHU) (PRASHANT MAHARISHI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 1 1 /01/2021 A K KEOT COPY FORWARDED TO 1. APPLICANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR:ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI