Income Tax Officer, Ward-2, Valsad, Valsad V. M/s Hardik Corporation, Valsad

ITA 78/SRT/2017

• Counselvise Citation: [2018] 118 COUNSELVISE.COM (IT) 2053 (ITAT-SURAT)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-11-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2010-2011
• Appeal Filed On: 31-08-2017
• Court: TRIBUNAL

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL, SURAT BENCH, SURAT BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER ./ ITA NO.78/SRT/2017 [ [ / ASSTT. YEAR:2010-2011 THE INCOME TAX OFFICER, WARD-2, VALSAD. VS. M/S HARDIK CORPORATION , 18, GIRDHAR CHAMBERS, KACHERI ROAD, VALSAD. PAN: AACFH7680R (APPLICANT) (RESPONENT) REVENUE BY : SMT. SMITHA V. NAIR, SR. DR ASSESSEE BY : NONE / DATE OF HEARING : 14/11/2018 / DATE OF PRONOUNCEMENT: 15/11/2018 / O R D E R PER AMARJIT SINGH, ACCOUNTANT MEMBER: THIS REVENUES APPEAL FOR A.Y. 2010-11, ARISES FROM ORDER OF THE LD.CIT(A), VALSAD, DATED 08/06/2017, IN PROCEEDINGS UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT. 2. THE SOLITARY GRIEVANCE OF THE REVENUE IS THAT THE LD. CIT(A) IS RIGHT IN QUASHING THE ASSESSMENT ON THE BASIS THAT THE ISSUE OF UNDERVALUATION OF STOCK ITA NO.78/SRT/2017 A.Y.2010-2011 2 IS CHANGE OF OPINION EVEN AND NOT ADJUDICATED THE CASE ON MERITS EVEN THOUGH THE AO HAS EXPLICITLY STATED IN THE ASSESSMENT ORDER PASSED U/S.147 OF THE I.T ACT, 1961 THAT THE ASSESSEE HAS NOT PROVIDED ANY DOCUMENTARY EVIDENCE OF EXPENDITURE OF RS.41,83,105/- 3. AT THE OUTSET, AFTER GOING THROUGH THE GROUNDS OF APPEAL AND THE IMPUGNED ORDERS OF THE REVENUE AUTHORITIES BELOW, A QUERY WAS RAISED BY THE BENCH AS TO APPLICABILITY AND MAINTAINABILITY OF THE APPEAL FILED BY THE REVENUE IN VIEW OF RECENT CBDT CIRCULAR NO.3/2018 DATED 11.7.2018 RESTRICTING THE FILLING OF THE APPEAL BY THE REVENUE WHERE THE TAX EFFECT IS BELOW RS.20 LAKHS, THE LD. DR DID NOT DISPUTE THE SAME AND SUBMITTED THAT THE ISSUE IS LEFT TO THE TRIBUNAL TO BE DECIDED IN ACCORDANCE WITH LAW. 4. WE FIND THAT THE APPEAL OF THE REVENUE IS PRESENTED ON 31/08/2017. ON 11/07/2018 THE CBDT HAS ISSUED INSTRUCTIONS BEARING NO. 3 OF 2018 UNDER FILE NO.F.NO.279/MISC.142/2007-ITJ(PT) PROHIBITING ITS SUBORDINATE AUTHORITIES FROM FILING OF THE APPEAL TO THE TRIBUNAL AGAINST THE ORDER OF THE CIT(A) WHERE THE TAX EFFECT BY VIRTUE OF THE RELIEF GIVEN BY THE CIT(A) IS LESS THAN RS.20 LAKHS. THE INSTRUCTIONS HAVE BEEN MADE APPLICABLE WITH RETROSPECTIVE EFFECT, MEANING THEREBY, THESE INSTRUCTIONS ARE APPLICABLE ON PENDING APPEALS ALSO. IN THE PRESENT CASE, TAX EFFECT ON THE TOTAL INCOME ASSESSED MINUS THE TAX THAT WOULD HAVE BEEN CHARGEABLE HAD SUCH TOTAL INCOME BEEN REDUCED BY THE AMOUNT OF INCOME IN RESPECT OF THE ISSUE AGAINST WHICH APPEAL IS FILED, IS LESS THAN RS.20 LAKHS. FURTHER, THE CASE OF THE REVENUE DOES NOT FALL WITHIN THE AMBIT OF EXCEPTIONS PROVIDED IN THE CIRCULAR. THUS, KEEPING IN VIEW THE ABOVE CBDT CIRCULAR AND PROVISIONS OF SECTION 268A OF THE INCOME TAX ACT, WE ARE OF THE VIEW THAT THE PRESENT APPEAL OF THE REVENUE DESERVES TO BE DISMISSED. IT IS ACCORDINGLY DISMISSED. HOWEVER, IT IS OBSERVED THAT IN CASE ON RE-VERIFICATION AT THE END OF THE AO IT COMES TO THE NOTICE THAT THE TAX EFFECT IS MORE OR REVENUES CASE FALLS WITHIN THE AMBIT OF EXCEPTIONS PROVIDED IN THE CIRCULAR, THEN THE DEPARTMENT WILL BE AT LIBERTY TO APPROACH THE TRIBUNAL FOR RECALL OF THIS ORDER. ITA NO.78/SRT/2017 A.Y.2010-2011 3 SUCH APPLICATION SHOULD BE FILED WITHIN THE TIME PERIOD PRESCRIBED IN THE ACT. IN VIEW OF THE ABOVE, THE APPEAL OF THE REVENUE IS DISMISSED DUE TO LOW TAX EFFECT. 5. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE COURT ON 15/11/2018 AT SURAT. -SD- -SD- ( RAJPAL YADAV ) JUDICIAL MEMBER ( AMARJIT SINGH ) ACCOUNTANT MEMBER TRUE COPY SURAT; DATED 15/11/2018 MANISH / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / CONCERNED CIT 4. () / THE CIT(A) 5. , / DR, ITAT, 6. [ / GUARD FILE. / BY ORDER, ( ASSTT.REGISTRAR) , / ITAT, SURAT