ITO, Haridwar V. Shri Chandra Mani Nautiyal, Haridwar

ITA 7058/DEL/2014

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 4283 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 8 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-09-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 30-12-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUDHANSHU SHARMA
• Keywords: Tax effect
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES B : DELHI BEFORE SHRI AMIT SHUKLA, JUDICIAL MEMBER AND SHRI WASEEM AHMED, ACCOUNTANT MEMBER ITA.NO.7058/DEL/2014 ASSESSMENT YEAR 2008-09 ITO, VS. SHRI CHANDRA MANI NAUTIYAL WARD-1, PRO. M/S . DURGA GAYATRI RESTURANT, D-29 & 30, NEAR SHANTI KUNJ, BHOOPA TWALA INDUSTRIAL AREA, HARIDWAR HARIDWAR (PAN-AGDPN5042J) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI ANSHU PRAKASH, SR. DR. REVENUE BY : SHRI SUDHANSHU SHARMA, CA DATE OF HEARI NG : 25.09.2017 DATE OF ORDER : 25.09.2017 ORDER PER WASEEM AHMED, ACCOUNTANT MEMBER : THIS APPEAL BY THE REVENUE IS AGAINST ORDER OF COMM ISSIONER OF INCOME TAX (APPEALS)-I, DEHRADUN DATED 09.10.2014 . ASSESSMENT WAS FRAMED BY ITO WARD-1, HARIDWAR U/S 143(3) OF THE IN COME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) FOR ASSESSM ENT YEAR 2008-09. 2 ITA.NO. 7058/DEL/2014 ITO VS. SHRI CHANDRA MANI NAUTIYAL 2. SHRI SUDHANSHU SHARMA LD. AUTHORIZED REPRESENTAT IVE APPEARING ON BEHALF OF ASSESSEE AND SHRI ANSHU PRAKASH, LD. SR. DEPARTMENTAL REPRESENTATIVE APPEARING ON BEHALF OF REVENUE. 3. AT THE OUTSET IT WAS OBSERVED THAT OF LATE, T HE CBDT HAS ISSUED CIRCULAR NO. 21/2015, DATED 10TH DECEMBER, 2015, WH EREBY THE MONETARY LIMITS FOR FILING OF APPEALS BY THE DEPARTMENT BEFO RE INCOME TAX APPELLATE TRIBUNAL, HON'BLE HIGH COURTS AND SLP BEFORE HON'BL E SUPREME COURT HAVE BEEN INCREASED AS MEASURE FOR REDUCING LITIGATION. THE REVISED MONETARY LIMITS LAID DOWN IN PARA-3 OF THIS CIRCULAR AND THE MANNER OF COMPUTING TAX EFFECT AS LAID DOWN IN PARA-4 OF THIS CIRCULAR ARE AS FOLLOWS: 3. HENCEFORTH, APPEALS/ SLPS SHALL NOT BE FILED I N CASES WHERE THE TAX EFFECT DOES NOT EXCEED THE MONETARY LIMITS GIVEN HEREUNDER: - SL. NO. APPEALS IN INCOME-TAX MATTERS MONETARY LIMIT (IN RS) 1. BEFORE APPELLATE TRIBUNAL 10,00,000/- 2. BEFORE HIGH COURT 20,00,000/- 3. BEFORE SUPREME COURT 25,00,000/- IT IS CLARIFIED THAT AN APPEAL SHOULD NOT BE FILED MERELY BECAUSE THE TAX EFFECT IN A CASE EXCEEDS THE MONETARY LIMITS PRESCRIBED ABOVE. FILIN G OF APPEAL IN SUCH CASES IS TO BE DECIDED ON MERITS OF THE CASE. 4. FOR THIS PURPOSE, 'TAX EFFECT' MEANS THE DIFFERE NCE BETWEEN THE TAX ON THE TOTAL INCOME ASSESSED AND THE TAX THAT WOULD HAVE BEEN CH ARGEABLE HAD SUCH TOTAL INCOME BEEN REDUCED BY THE AMOUNT OF INCOME IN RESPECT OF THE ISSUES AGAINST WHICH APPEAL IS INTENDED TO BE FILED (HEREINAFTER REFERRED TO AS 'D ISPUTED ISSUES'). HOWEVER THE TAX WILL NOT INCLUDE ANY INTEREST THEREON, EXCEPT WHERE CHAR GEABILITY OF INTEREST ITSELF IS IN DISPUTE. IN CASE THE CHARGEABILITY OF INTEREST IS THE ISSUE UNDER DISPUTE, THE AMOUNT OF INTEREST SHALL BE THE TAX EFFECT. IN CASES WHERE RETURNED LO SS IS REDUCED OR ASSESSED AS INCOME, 3 ITA.NO. 7058/DEL/2014 ITO VS. SHRI CHANDRA MANI NAUTIYAL THE TAX EFFECT WOULD INCLUDE NOTIONAL TAX ON DISPUT ED ADDITIONS. IN CASE OF PENALTY ORDERS, THE TAX EFFECT WILL MEAN QUANTUM OF PENALTY DELETED OR REDUCED IN THE ORDER TO BE APPEALED AGAINST. 4. IN PARA-10 OF THE SAID CIRCULAR IT HAS BEEN FUR THER CLARIFIED THAT THE REVISED MONETARY LIMITS WILL APPLY RETROSPECTIVELY. THE RELEVANT PARA-10 OF THE CIRCULAR READS THUS: 10. THIS INSTRUCTION WILL APPLY RETROSPECTIVELY TO PENDING APPEALS AND APPEALS TO BE FILED HENCEFORTH IN HIGH COURTS/ TRIBUNALS. PENDING APPEA LS BELOW THE SPECIFIED TAX LIMITS IN PARA 3 ABOVE MAY BE WITHDRAWN/ NOT PRESSED. APPEALS BEFORE THE SUPREME COURT WILL BE GOVERNED BY THE INSTRUCTIONS ON THIS SUBJECT, OPERA TIVE AT THE TIME WHEN SUCH APPEAL WAS FILED. 4.1 IN THE PRESENT CASE, THE TAX EFFECT IN THIS APP EAL BY THE REVENUE IS LESS THAN RS.10 LACS. THOUGH THE APPEAL HAD BEEN FI LED BY THE REVENUE ON 30.12.2014 AND WAS WITHIN THE MONETARY LIMIT IN THE FORM OF TAX EFFECT FOR FILING APPEAL BEFORE TRIBUNAL, BUT IN VIEW OF PARA-10 OF THE CIRCULAR OF CBDT, EVEN SUCH APPEAL WILL BE GOVERNED BY THE NEW MONETARY LIMITS LAID DOWN IN THE CBDT CIRCULAR NO.21/2015 REFERRED TO AB OVE. IN THE PRESENT CASE THE ADDITION WAS MADE BY THE AO FOR RS. 90,42,555.00 ON ACCOUNT OF LONG TERM CAPITAL GAIN WHICH WAS TAXE D @ 20% ON SUCH AMOUNT. HOWEVER THE LD. CIT-A GRANTED THE RELIEF OF RS. 48,10,500 BY REDUCING THE LONG TERM CAPITAL GAIN INCOME TO RS. 4 2,32,044.00 VIDE ORDER DATED 9.10.2014. THUS THE DISPUTED AMOUNT OF TAX WO RKS AT RS. 9,62,100.00( 48,10,500.00 * 20%) ONLY WHICH IS LESS THAN THE LIMIT AS SPECIFIED IN THE CBDT CIRCULAR. 5. IT IS A SETTLED LAW THAT THE CIRCULARS ISSUED B Y CBDT ARE BINDING ON THE REVENUE. THIS POSITION WAS CONFIRMED BY THE APEX CO URT IN THE CASE OF COMMISSIONER OF CUSTOMS VS INDIAN OIL CORPORATION L TD. REPORTED IN 267 4 ITA.NO. 7058/DEL/2014 ITO VS. SHRI CHANDRA MANI NAUTIYAL ITR 272 WHEREIN THEIR LORDSHIPS EXAMINED THE EARLIE R DECISIONS OF THE APEX COURT WITH REGARD TO BINDING NATURE OF THE CIRCULAR AND LAID DOWN THAT WHEN A CIRCULAR IS ISSUED BY THE BOARD IT REMAINS I N OPERATION AND THE REVENUE IS BOUND BY IT. THEREFORE IT CANNOT BE ALLO WED TO PLEAD THAT IT IS NOT VALID OR THAT IT IS CONTRARY TO THE TERMS OF TH E STATUTE. THE APPEAL UNDER CONSIDERATION HAS CERTAINLY BEEN FILED CONTRARY TO THE CIRCULAR ISSUED BY THE CBDT CIRCULAR NO.21/2015. 6. IN VIEW OF THE ABOVE, WE HOLD THAT THE APPEAL FI LED BY THE DEPARTMENT, AGAINST THE IMPUGNED ORDER OF THE LD. C IT(A), ARE CONTRARY TO THE POLICY DECISION OF THE DEPARTMENT AND AS SUCH T HE APPEAL FILED BY THE DEPARTMENT IS DISMISSED IN LIMINE . 7. IN THE RESULT, APPEAL OF REVENUE IS DISMISSED IN LIMINE . ORDER PRONOUNCED IN THE OPEN COURT 25/ 09/2017 SD/- SD/- (AMIT SHUKLA) (WASEEM AHMED) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED :25.9.2017 VEENA COPY TO 1. THE APPELLANT 2. THE RESPONDENT 3. CIT(A) CONCERNED 4. CIT CONCERNED 5. D.R. ITAT B BENCH, DELHI 6. GUARD FILE.