ACIT, Circle - 1, Hooghly, Hooghly V. The Tribeni Tissues Co-op. Credit Society Ltd., Hooghly

ITA 798/KOL/2011

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 48221 (ITAT-KOLKATA)
• Duration Of Justice: 1 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-07-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2006-2007
• Appeal Filed On: 25-05-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N DUTTA GUPTA
• Assessee Lawyers: S M SURANA; S K SEAL
• Keywords: Question of law; Tax effect
• Section: 6; 56

Judgement Text

, .. , , IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH SM C, KOLKATA /BEFORE . .. . . .. . . .. . , , , , /SHRI C.D.RAO, ACCOUNTANT MEMBER / ITA NO . 798/KOL/2011 !'# $%/ ASSESSMENT YEAR : 2006-07 (() / APPELLANT ) - ' - (,-()/ RESPONDENT ) A.C.I.T., CIRCLE-1, HOOGHLY - VERSUS- THE TRIBENI TISSUES COOPERATIVE CREDIT SOCIETY LTD.,KOLKATA (PAN: AAALT 0055G) () . / / FOR THE APPELLANT: SHRI N.DUTTA GUPTA ,-() . / / FOR THE RESPONDENT: SHRI S.M.SURANA & SHRI S.K. SEAL 0 / ORDER THIS APPEAL IS FILED BY THE REVENUE AGAINST THE OR DER DATED 08.03.2011 OF THE CIT(A)-XXXVI, KOLKATA PERTAINING TO A.YR. 2006-07. 2. IN THIS APPEAL THE REVENUE HAS TAKEN THE FOLLOWING GROUNDS OF APPEAL :- 1. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CAS E, THE CIT(A) HAD ERRED IN DELETING THE ADDITION OF RS.1,70,917/- CONSIDERING THE ORDER OF THE HONBLE SUPREME COURT SPC(C) NO.7572 OF 2009) IN THE CASE OF M/S. THE TOTGARS CO-OPERATIVE SALE SOCIETY LIMITED, WHEREIN IT WAS H ELD THAT INTEREST INCOME ARISING OUT OF THE INVESTMENT OF SURPLUS FUNDS (NOT REQUIRED FOR BUSINESS PURPOSE) IN SHORT-TERM DEPOSITS AND SECURITIES WOUL D PARTAKE THE CHARACTER OF INCOME FROM OTHER SOURCES AND HENCE TAXABLE U/S 5 6 OF THE I.T.ACT, 1961. SUBSTANTIAL QUESTION OF LAW IS THUS INVOLVED IN THI S CASE. 3. AT THE TIME OF HEARING THE LD. AR APPEARING ON BEHALF OF THE ASSESSEE SUBMITTED THAT IN THIS CASE THE TAX EFFECT IS BELOW RS. 2 LAK HS. THEREFORE, AS PER THE INSTRUCTION OF CBDT CIRCULAR THE REVENUE IS BARRED FROM FILING OF THE APPEAL BEFORE THIS TRIBUNAL. 4. THE LD. DR APPEARING ON BEHALF OF THE REVENUE D ID NOT RAISE ANY OBJECTION TO THE CONTENTION OF THE LD. AR OF THE ASSESSEE. 2 5. AFTER HEARING THE RIVAL SUBMISSIONS AND ON CAREF UL PERUSAL OF THE ASSESSMENT ORDER AS WELL AS THE IMPUGNED APPELLATE ORDER , IT IS OBSERVED THAT THE TAX EFFECT IN THIS CASE IS BELOW RS.2 LAKHS. 5.1. ADMITTEDLY THE TAX PAYABLE IN RESPECT OF GROUN DS OF APPEAL BY THE DEPARTMENT IS LESS THAN RS.2 LAKHS AND AS PER REVISED INSTRUCT ION OF THE CBDT NO. 279 DATED 24 TH OCTOBER, 2005 W.E.F. 31.10.2005 AND SINCE IN THE PR ESENT CASE, THE ABOVE REVISED INSTRUCTION OF CBDT IS WELL APPLICABLE AND THEREFOR E, IN OUR CONSIDERED OPINION, THE REVENUE SHOULD HAVE REFRAINED FROM FILING SECOND AP PEAL BEFORE THE TRIBUNAL. IT WOULD BE APT TO QUOTE THE OBSERVATION OF THE DELHI HIGH C OURT IN THE CASE OF CIT VS.- ITAT 232 ITR 207 AT PAGE 216 AS BELOW :- THE CENTRAL BOARD OF DIRECT TAXES INSTRUCTIONS ARE BINDING ON THE DEPARTMENT. IF THE CASE AT HAND IS C OVERED BY A POLICY LAID DOWN BY THE CENTRAL BOARD OF DIREC T TAXES IN THAT CASE NO FAULT CAN BE FOUND WITH THE ORDER O F THE TRIBUNAL REFUSING TO STATE THE CASE AND THERE IS NO REASON WHY THE HIGH COURT SHOULD INTERFERE WITH SUCH DISCR ETION OF THE TRIBUNAL AS HAS BEEN EXERCISED CONSISTENTLY WIT H THE UNIFORM POLICY LAID DOWN BY THE CENTRAL BOARD OF DI RECT TAXES WHICH BINDS ALL THE SUBORDINATE AUTHORITIES O F THE INCOME TAX DEPARTMENT. THE HIGH COURT WOULD NOT ORDINARILY ENCOURAGE BREACH OF POLICY DECISIONS AND THE DEPARTMENTAL INSTRUCTIONS WHICH HAVE A PUBLIC PURPO SE BEHIND THEM. VALUABLE TIME OF HIGH COURTS AND HIGHL Y PLACED TRIBUNALS IS NOT TO BE WASTED ON PETTY MATTE RS. 5.2. FURTHER, THE BOMBAY HIGH COURT HAS ALSO HELD I N THE CASE OF CIT VS.- CAMCO COLOUR LTD. (SUPRA) AND IN THE CASE OF PITHWA ENGIN EERING WORKS REPORTED IN 276 ITR 519 MUMBAI THAT THE CIRCULAR IS BINDING ON THE REVE NUE AND AN APPEAL OR REFERENCE CONTRARY TO THE INSTRUCTION ISSUED IN THE CIRCULAR WOULD NOT BE CONSIDERED BY THE COURT. 5.3. I FIND THAT IT IS A SETTLED LAW THAT THE CIRCU LARS ISSUED BY CBDT ARE BINDING ON THE REVENUE. THIS POSITION WAS CONFIRMED BY THE APE X COURT IN THE CASE OF COMMISSIONER OF CUSTOMS VS INDIAN OIL CORPORATION L TD. REPORTED IN 267 ITR 272 WHEREIN THEIR LORDSHIPS EXAMINED THE EARLIER DECISI ONS OF THE APEX COURT WITH REGARD TO BINDING NATURE OF THE CIRCULAR AND LAID DOWN THA T WHEN A CIRCULAR ISSUED BY THE BOARD REMAINS IN OPERATION THEN THE REVENUE IS BOUN D BY IT AND CANNOT BE ALLOWED TO PLEAD THAT IT IS NOT VALID OR THAT IT IS CONTRARY T O THE TERMS OF THE STATUTE. THE APPEAL 3 UNDER CONSIDERATION HAS CERTAINLY BEEN FILED CONTRA RY TO THE CIRCULAR ISSUED BY THE CBDT INSTRUCTION NO.5 OF 2008 DATED 15.5.2008. 5.4. IN VIEW OF THE ABOVE, I HOLD THAT THE APPEAL F ILED BY THE DEPARTMENT, AGAINST THE IMPUGNED ORDER OF THE LD. CIT(A), IS CONTRARY TO TH E POLICY DECISION OF THE DEPARTMENT AND AS SUCH THE APPEAL FILED BY THE DEPA RTMENT IS DISMISSED IN LIMINE . 6. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 04.07.2011. SD/- . .. . . .. . , , , , , C.D.RAO, ACCOUNTANT MEMBER ( (( ( ) )) ) DATE: 04.07.2011. R.G.(.P.S.) 0 . ,!!1 21$3- COPY OF THE ORDER FORWARDED TO: 1. THE TRIBENI TISSUES CO-OPERATIVE CREDIT SOCIETY LTD ., CHANDRAHATI, TRIBENI, HOOGHLY-712501. 2 THE ACIT, CIRCLE-I, HOOGHLY. 3. THE CIT, 4. THE CIT(A)-XXXVI, KOLKATA 5. DR, KOLKATA BENCHES, KOLKATA -1 ,!/ TRUE COPY, 0'8/ BY ORDER, DEPUTY /ASST. REGISTRAR , ITAT, KOLKATA BENCHES