Asst. CIT, Central Circle-1, Nashik V. M/s. Ganesh Builders, Nashik

ITA 832/PUN/2013

• Counselvise Citation: 83224514 RSA 2013
• Duration Of Justice: 1 year(s) 10 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-02-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 12-11-2014
• Assessment Year: 2006-2007
• Appeal Filed On: 10-04-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: CHETAN KARIA; H A NASIKHAR
• Keywords: Question of law; Tax effect
• Section: 143(3); 260A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE BEFORE MS. SUSHMA CHOWLA, JUDICIAL MEMBER AND SHRI R.K. PANDA, ACCOUNTANT MEMBER ITA NOS.832 & 833/PN/2013 ASSESSMENT YEARS: 2006-07 & 2007-08 THE ASST. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 1, NASHIK . APPELLANT VS. M/S. GANESH BUILDERS, 6, VINAYAK, OM NAGAR COLONY, ADGAON NAKA, PANCHAWATI, NASHIK 422003 . RESPONDENT PAN: AAHFG1908J APPELLANT BY : RAJESH DAMOR RESPONDENT BY : CHETAN KARIA & H.A. NASIKHAR DATE OF HEARING : 24-02-2015 DATE OF PRONOUNCEMENT : 25-02-2015 ORDER PER SUSHMA CHOWLA, JM: BOTH THE APPEALS FILED BY THE REVENUE ARE AGAINST T HE CONSOLIDATED ORDER OF CIT(A)-I, NASHIK, DATED 23.01.2013 RELATING TO ASSE SSMENT YEARS 2006-07 AND 2007-08 AGAINST ORDER PASSED UNDER SECTION 143(3) R.W.S. 15 3C OF THE INCOME TAX ACT, 1961. 2. AT THE OUTSET OF HEARING, THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE POINTED OUT THAT THE APPEALS FILED BY THE REVENUE A RE NOT MAINTAINABLE AS THE TAX EFFECT IN BOTH THE APPEALS WAS LESS THAN RS.4 LAKHS. 3. ON THE PERUSAL OF THE RECORD, WE FIND THAT THE P RESENT APPEALS ARE FILED BY THE REVENUE AND THE TOTAL TAX EFFECT IN THE PRESENT APP EALS IS BELOW RS.4 LAKHS. THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE FAIRLY ADMITTED THAT THE TAX EFFECT IN THE PRESENT APPEALS WAS LESS THAN RS.4 LAKHS. ITA NOS.832 & 833/PN/2013 M/S. GANESH BUILDERS 2 4. WE FIND THAT THE ISSUE IN THE PRESENT APPEALS IS SQUARELY COVERED BY THE RATIO LAID DOWN BY THE HONBLE BOMBAY HIGH COURT IN THE CASE O F CIT VS. SMT. VIJAYA V. KAVEKAR REPORTED IN (2013) 350 ITR 237 (BOM) THAT THE PROPO SITION REGARDING THE CIRCULARS ISSUED BY THE CBDT ARE NOT ONLY APPLICABLE TO THE NEW CASE S BUT WOULD ALSO APPLICABLE TO THE PENDING APPEALS. 5. UNDER THE PROVISIONS OF SECTION 268(1) OF THE AC T, THE CBDT IS EMPOWERED TO ISSUE INSTRUCTIONS FIXING THE MONETARY LIMITS FOR T HE REVENUE TO FILE APPEALS BEFORE THE TRIBUNAL, ALL THE HIGH COURTS AND THE SUPREME COURT . THE CBDT FROM TIME TO TIME, ISSUES INSTRUCTIONS FIXING THE MONETARY LIMITS WITH THE OBJECT OF NOT BURDENING THE COURTS AND THE TRIBUNAL WITH MATTERS WHERE THE TAX EFFECT WAS ON A LOWER SIDE. THE CBDT VIDE INSTRUCTION NO.5 OF 2014 ISSUED ON 10.07.2014 HAD R EVISED THE EARLIER INSTRUCTION NO.3 OF 2011, DATED 09.02.2011 WHEREIN, THE MONETARY LIMITS AND OTHER CONDITIONS FOR FILING THE DEPARTMENTAL APPEALS IN INCOME TAX MATTERS BEFORE T HE APPELLATE TRIBUNALS, HIGH COURTS AND SUPREME COURT WERE SPECIFIED. THE INSTRUCTIONS ISSUED ON 10.07.2014 WERE IN SUPERSESSION OF THE EARLIER INSTRUCTIONS AND THE MO NETARY LIMITS HAVE BEEN ENHANCED BY THE PRESENT INSTRUCTION AND IT HAS BEEN PROVIDED TH AT THE APPEALS SHALL NOT BE FILED IN CASES WHERE THE TAX EFFECT DOES NOT EXCEED THE MONE TARY LIMITS GIVEN HEREUNDER:- S NO APPEALS IN INCOME-TAX MATTERS MONETARY LIMIT ( IN RS) 1. BEFORE APPELLATE TRIBUNAL 4,00,000/- 2. U/S 260A BEFORE HIGH COURT 10,00,000/- 3. BEFORE SUPREME COURT 25,00,000/- 6. THE REVISED MONETARY LIMIT FOR FILING THE APPEAL S BEFORE THE APPELLATE TRIBUNAL WAS FIXED AT IN EXCESS OF RS.4 LACS. FURTHER, UNDE R THE SAID INSTRUCTION, IT WAS ALSO DIRECTED THAT THE ASSESSING OFFICER SHALL CALCULATE THE TAX EFFECT SEPARATELY FOR EVERY ASSESSMENT YEAR IN RESPECT OF THE DISPUTED ISSUES. IN CASE OF EVERY ASSESSEE WHERE, THE DISPUTED ISSUE ARISES IN MORE THAN ONE ASSESSME NT YEAR, IT WAS DIRECTED THAT APPEAL COULD BE FILED IN RESPECT OF SUCH ASSESSMENT YEAR O R YEARS IN WHICH, THE TAX EFFECT IN RESPECT OF THE DISPUTED ISSUE EXCEEDED THE MONETARY LIMIT FIXED. IN OTHER WORDS AND HENCEFORTH, THE APPEALS CAN BE FILED ONLY WITH REFE RENCE TO THE TAX EFFECT IN THE RELEVANT ASSESSMENT YEAR. IN CASE OF COMPOSITE ORDER OF ANY HIGH COURT OR APPELLATE AUTHORITY, IT ITA NOS.832 & 833/PN/2013 M/S. GANESH BUILDERS 3 WAS FURTHER CLARIFIED THAT IF THE APPEAL IS TO BE F ILED IN RESPECT OF THE YEAR/S IN WHICH, TAX EFFECT EXCEEDS THE MONETARY LIMIT PRESCRIBED THEN, SUCH APPEALS COULD ALSO BE FILED IN RESPECT OF ALL SUCH ASSESSMENT YEARS EVEN IF THE TA X EFFECT IS LESS THAN PRESCRIBED MONETARY LIMITS. 7. IN THE FACTS OF THE PRESENT CASE, THE REVENUE HA D FILED THE APPEALS ON 10.04.2013. ADMITTEDLY, IN THE YEAR UNDER APPEAL, THE TAX EFFECT IS LESS THAN RS.4 LACS AS PRESCRIBED IN INSTRUCTION NO.5 OF 2014 ISSUED BY TH E CBDT. AT THE TIME OF HEARING OF THE APPEAL, THE MONETARY LIMITS PRESCRIBED BY THE CBDT STAND REVISED BY THE SAID INSTRUCTION NO.5 OF 2014, DATED 10.07.2014 UNDER WHICH, IT HAS BEEN PROVIDED THAT WHERE THE TAX EFFECT DOES NOT EXCEED RS.4 LACS IN ANY OF THE ASSE SSMENT YEAR THEN, NO APPEAL CAN BE FILED BEFORE THE APPELLATE TRIBUNAL. THE ISSUE ARI SING BEFORE US IS WHETHER THE SAID REVISED INSTRUCTIONS WHICH WERE ISSUED SUBSEQUENT T O THE FILING OF THE APPEAL BY THE REVENUE COULD BE APPLIED TO THE PENDING APPEAL OR A PPLICABLE ONLY TO THE NEW CASES TO BE FILED BY THE REVENUE AFTER THE DATE OF ISSUE OF THE INSTRUCTIONS. 8. WE FIND THAT THE SAID ISSUE HAS BEEN CONSIDERED BY THE HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. SMT. VIJAYA V. KAVEKAR (SUPRA). THE HONBLE HIGH COURT IN THE CASE OF CIT VS. SMT. VIJAYA V. KAVEKAR (SUPRA), HAD IN TURN FOLLOWED THE RATIO LAID DOWN BY ANOTHER DIVISION OF BOMBAY HIGH COURT IN TH E CASE OF CIT VS. POLYCOTT CORPORATION REPORTED IN (2009) 318 ITR 144 (BOM) WH EREIN, IT WAS HELD AS UNDER:- 8. IN CASE OF 'COMMISSIONER OF INCOME TAX V/S POLY COTT CORPORATION' REPORTED AT '(2009) 318 ITR 144 (BOM), A ANOTHER DI VISION BENCH OF THIS COURT CONSTRUED THE SAME INSTRUCTION NO. 2 OF 2005, DATED 24TH OCTOBER, 2005. THE DIVISION BENCH OBSERVED WHILE CONSTRUING THE PARAGR APH NO. 5 OF THE CIRCULAR, AS THUS : '9. HAVING CONSIDERED THE CONTENTIONS, IN OUR OPINI ON, THE INSTRUCTIONS CANNOT BE INTERPRETED AS A STATUTE THOUGH IT IS PUR SUANT TO THE POWER CONFERRED UNDER SECTION 268A OF THE IT ACT. WHAT TH E COURT HAS TO CONSIDER IS THE PLAIN LANGUAGE OF THE PARA AND THE OBJECT BEHIND THE SAID PROVISIONS. THE OBJECT APPEARS TO BE NOT TO BURDEN COURTS AND TRIBUNALS IN RESPECT OF MATTERS WHERE THE TAX EFFECT IS LESS THAN THE LIMIT PRESCRIBED. EVEN BEFORE THIS INSTRUCTION, CBDT HAS BEEN ISSUING INSTRUCTIONS, THE LAST ONE BEING ON 24TH OCT., 2005 WHERE THE MONETARY LIM IT HAS BEEN FIXED. IN THOSE INSTRUCTIONS THE ONLY EXCEPTION HAD BEEN THAT IN CASES INVOLVING, SUBSTANTIAL QUESTION OF LAW OF IMPORTANCE AS WELL A S IN CASES WHERE THE SAME QUESTION OF LAW WILL REPEATEDLY ARISE, EITHER IN THE CASE CONCERNED ITA NOS.832 & 833/PN/2013 M/S. GANESH BUILDERS 4 OR IN SIMILAR CASE, APPEAL SHOULD BE FILED WITHOUT BEING HINDERED BY THE MONETARY LIMITS. THE PRESENT INSTRUCTIONS SEEM EVEN TO LIMIT THE ISSUES INSOFAR AS THE SAME QUESTION OF LAW OR RECURRING IS SUE EXCEPT TO THE EXTENT PROVIDED IN PARA 5. ON A PROPER READING OF PARA 5 OF THE INSTRUCTIONS I T WOULD BE CLEAR THAT A DUTY IS CAST ON THE AO THAT EVEN IF THE DISPUTED QU ESTIONS ARISE FOR MORE THAN ONE ASSESSMENT YEAR THEN AN APPEAL SHOULD BE F ILED ONLY IN RESPECT OF THOSE YEARS WHERE THE MONETARY LIMIT AS SPECIFIE D IN PARA 3 OF THE INSTRUCTION. THE EXCEPTION, HOWEVER, IS CARVED OUT IN RESPECT OF A COMPOSITE ORDER OF THE HIGH COURT OR APPELLATE AUTH ORITY. IN OTHER WORDS WHERE THE HIGH COURT OR TRIBUNAL HAS PASSED A COMPO SITE ORDER IN RESPECT OF THE SAME ASSESSEE ON THE SAME QUESTION A ND/OR ON DIFFERENT QUESTION AND FOR ONE OF THE ASSESSMENT YEARS, THE T AX EFFECT IS MORE THAN THE MONETARY LIMIT THEN THE APPEAL SHALL ALSO BE FI LED IN RESPECT OF ALL THE ASSESSMENT YEARS. THE SUBMISSION ON BEHALF OF THE A SSESSEE IS THAT THE COMPOSITE ORDER MUST RELATE TO A COMMON ISSUE. WE B EG TO DISAGREE ON A PLAIN AND LITERAL CONSTRUCTION OF THE INSTRUCTION. THE EXPRESSION 'WHICH INVOLVES MORE THAN ONE YEAR' WOULD HAVE NO MEANING IF IT WAS RESTRICTED ONLY TO THE EXPRESSION 'COMMON ISSUES'. THE EXPRESS ION, THEREFORE, OF A COMPOSITE ORDER WILL HAVE TO BE READ TO MEAN AN ORD ER IN RESPECT OF THE SAME ASSESSEE FOR MORE THAN ONE YEAR. AN (ORDER) DI SPOSING OF SEVERAL APPEALS ON A COMMON QUESTION OF LAW BY APPELLATE AU THORITY, CANNOT BE SAID TO BE A COMPOSITE ORDER AS THE ORDER INVOLVES APPEALS BY DIFFERENT PERSONS, WHICH APPEALS FOR THE SAKE OF CONVENIENCE HAVE BEEN ONLY CLUBBED TOGETHER FOR THE PURPOSE OF DISPOSAL ON THA T ISSUE. IN OUR OPINION, THIS WOULD BE THE CORRECT READING OF PARA 5 OF THE INSTRUCTION.' 9. THE HONBLE BOMBAY HIGH COURT FURTHER HELD AS UN DER:- 15. THE POSITION OF LAW, THEREFORE, EMERGING FROM THE AFORESAID JUDGEMENTS, IS THAT THE CIRCULARS OR INSTRUCTIONS ISSUED UNDER SEC TION 268A OF THE INCOME TAX ACT BY THE CENTRAL BOARD OF DIRECT TAXES, ARE APPLI CABLE NOT ONLY TO NEW CASES BUT TO PENDING CASES AS WELL. SUCH CIRCULARS HAVE B EEN ISSUED UNDER SECTION 268A OF THE INCOME TAX ACT, WHICH IS AN EXCEPTION T O THE PROVISIONS OF SECTION 260 OF THE ACT. THE CBDT BEING MINDFUL OF THIS POSI TION HAS ISSUED THE AFORESAID INSTRUCTIONS. IN OUR OPINION, THEREFORE, THE INSTRU CTIONS WOULD BE APPLICABLE TO PENDING CASES AS WELL. WE HAVE ALREADY FOUND THAT T HE INSTRUCTION NO. 5 OF 2008 AND INSTRUCTION NO. 3 OF 2011 ARE PARA-MATERIA. THE INSTRUCTION NO. 5 OF 2008 HAS ALREADY BEEN INTERPRETED BY THIS COURT IN CIT V/S M ADHUKAR INAMDAR (SUPRA). IT IS NOT DISPUTED THAT THIS JUDGEMENT HAS NOT BEEN CHALL ENGED BY THE REVENUE AND THEREFORE STILL HOLDS THE FIELD. 10. FOLLOWING THE ABOVE SAID PROPOSITION LAID DOWN BY THE HONBLE HIGH COURT IN THE CASE OF CIT VS. SMT. VIJAYA V. KAVEKAR (SUPRA), WE HOLD THAT IN VIEW OF THE REVISED INSTRUCTION ISSUED BY THE CBDT UNDER WHICH, THE MON ETARY LIMIT FOR FILING THE APPEALS BEFORE THE APPELLATE AUTHORITIES, TRIBUNALS HAS BEE N REVISED AND FIXED AT RS.4 LACS I.E. ONLY APPEALS WITH TAX EFFECT EXCEEDING RS.4 LACS WE RE MAINTAINABLE. IN THE PRESENT APPEAL FILED BY THE REVENUE, THE MONETARY LIMIT ADM ITTEDLY, IS LESS THAN RS.4 LACS. IN VIEW OF INSTRUCTION NO.5 OF 2014 WHICH ARE APPLICAB LE NOT ONLY TO THE NEW APPEALS TO BE ITA NOS.832 & 833/PN/2013 M/S. GANESH BUILDERS 5 FILED BY THE REVENUE, BUT ALSO TO THE APPEALS PENDI NG BEFORE THE TRIBUNAL, WE DISMISS BOTH THE CAPTIONED APPEALS FILED BY THE REVENUE BEC AUSE OF SMALL TAX EFFECT. 11. IN THE RESULT, BOTH THE APPEALS FILED BY THE RE VENUE ARE DISMISSED. ORDER PRONOUNCED ON THIS 25 TH DAY OF FEBRUARY, 2015. SD/- SD/- (R.K. PANDA) (SUSHMA CHOWLA) ACCOUNTANT MEMBER JUDICIAL MEMBER PUNE, DATED: 25 TH FEBRUARY, 2015 GCVSR COPY OF THE ORDER IS FORWARDED TO: - 1) THE DEPARTMENT; 2) THE ASSESSEE; 3) THE CIT(A)-I, NASHIK; 4) THE CIT-I, NASHIK; 5) THE DR A BENCH, I.T.A.T., PUNE; 6) GUARD FILE. BY ORDER //TRUE COPY// ASSISTANT REGISTRAR I.T.A.T., PUNE