Income Tax Officer, Nashik V. Shri Jagdishchandra G. Mittal, Akola

ITA 861/PUN/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 56579 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 5 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-11-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 21-11-2011
• Assessment Year: 2007-2008
• Appeal Filed On: 04-06-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MUKULESH DUBEK
• Keywords: Question of law; Tax effect

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B , PUNE BEFORE SHRI I.C. SUDHIR, JUDICIAL MEMBER AND SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER ITA NO. 861/PN/2010 (ASSTT. YEAR: 2007-08) INCOME TAX OFFICER , ... APPELLANT CENTRAL-2, NASHIK 3 RD FLOOR, KENDRIYA RAJASWA BHAVAN, RAM GANESH GADKARI CHOWK, OLD AGRA ROAD, NASHIK 422002 V. SHRI.JAGDISHCHANDRA G. MITTAL, RESPONDENT 380, RAMKRISHNA GANJ, INDORE RD, KHANDWA PAN ABHPA5088C ITA NO. 862/PN/2010 (ASSTT. YEAR: 2007-08) INCOME TAX OFFICER, ... APPELLANT CENTRAL-2, NASHIK 3 RD FLOOR, KENDRIYA RAJASWA BHAVAN, RAM GANESH GADKARI CHOWK, OLD AGRA ROAD, NASHIK 422002 V. SHRI. NARESHKUMAR G. MITTAL (HUF), RESPONDENT D-48, MIDC AREA, JALGAON PAN AADHN7544K APPELLANT BY : SHRI MUKULESH DUBEK RESPONDENT BY : SHRI NIKHIL PATHAK DATE OF HEARING 21.11.11 DATE OF PRONOUNCEMENT: .11.11 ORDER PER I.C. SUDHIR, JM THE REVENUE HAS QUESTIONED FIRST APPELLATE ORDER R AISING AN ISSUE AS TO WHETHER THE LD CIT(A) WAS JUSTIFIED IN DELETING THE ADDITION MADE AT RS. 6,58,021/- ITA . NOS. 861 & 862/PN/2010 SHRI JAGDISHCHANDRA G MITTAL ETC. PAGE OF 5 2 (ITA NO. 861/PN/2010) AND RS. 8,50,591/- (ITA NO. 8 62/PN/2010) WITHOUT TAKING INTO CONSIDERATION THE PROVISIONS OF SECTION 132(4A ). 2. AT THE OUTSET OF HEARING, THE LD. A.R. POINTED O UT THAT THE ABOVE APPEALS HAVING TAX EFFECT BELOW RS. 3 LAKH EACH HAVE BEEN P REFERRED BY THE REVENUE IN VIOLATION OF CBDT INSTRUCTION NO. 3 DATED 9.2.11 R. W.S. 268A OF THE I.T. ACT, HENCE THESE APPEALS ARE NOT MAINTAINABLE. IN OTHER WORDS, THE REVENUE SHALL NOT FILE THE APPEAL AGAINST FIRST APPELLATE ORDER HAVING TAX EFFECT UPTO RS. 3 LACS. THE LD. A.R. PLACED RELIANCE ON THE FOLLOWING DECI SIONS IN SUPPORT : 1. CIT V/S. MRS. P.S. JAIN & CO., ITR 179/1991, ORD ER DATED 2.8.2010 OF HONBLE BOMBAY HIGH COURT. 2. ITO V/S. SHRI ASHOK G. DHANDHARIAI, ITA NO. 2460/MUM/2010(A.Y. 2005-06), ORDER DATED 28 FEBRUAR Y 2011. 3. CIT V/S. DELHI RACE CLUB LTD., ITA NO. 128/2008, ORDER DATED 3.3.2011 (DELHI HIGH COURT). 3. THE LD. D.R. OPPOSED THE ABOVE SUBMISSION OF THE LD. A.R. ON THE BASIS THAT THE ABOVE INSTRUCTION DATED 9.2.2011 OF CBDT IS PROSPECTIVE IN EFFECT, HENCE NOT APPLICABLE IN THE PRESENT APPE AL. 4. IN REJOINDER,THE LD. A.R. CITED THE DECISION OF HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT V/S. MADHUKAR K. INAMDAR ( HUF),318 ITR 149 AND CIT V/S. PITHWA ENGINEERING WORKS, 276 ITR 519 (BOM.) WITH THIS SUBMISSION THAT IN THESE DECISIONS, THE HONBLE JUR ISDICTION HIGH COURT HAS BEEN PLEASED TO HOLD THAT THE TAX EFFECT AS PE R MONETARY LIMIT AS PER THE CBDT INSTRUCTIONS IS ALSO TO BE APPLIED IN PEN DING CASES FILED BEFORE THE PASSING OF SUCH INSTRUCTION. ITA . NOS. 861 & 862/PN/2010 SHRI JAGDISHCHANDRA G MITTAL ETC. PAGE OF 5 3 5. HAVING GONE THROUGH THE ABOVE CITED DECISIONS BY THE LD. A.R., WE FIND THAT IN THE CASE OF CIT V/S. DELHI RACE CLUB L TD. (SUPRA), THE HONBLE DELHI HIGH COURT AS PER THE RECENT GUIDELINES OF CB DT THAT APPEAL IN THOSE CASES BEFORE THE HIGH COURT WHERE THE TAX EFFECT IS LESS THAN RS.10 LAKHS ARE NOT TO BE ENTERTAINED HAS BEEN PLEASED TO DISM ISS THE APPEAL PREFERRED BY THE REVENUE HAVING TAX EFFECT BELOW RS . 10 LACS. THE HONBLE DELHI HIGH COURT FOLLOWING ITS EARLIER DECI SION IN THE CASE OF CIT V/S. M/S. P.S. JAIN & CO. (ITA NO. 179/1991 DECIDED ON 2 ND AUGUST 2010) HAS BEEN PLEASED TO HOLD THAT SUCH CIRCULAR WOULD A LSO APPLY TO PENDING CASES. HONBLE DELHI HIGH COURT IN THE CASE OF CIT V/S. M/S. P.S. JAIN & CO. (SUPRA) HAS BEEN PLEASED TO DISMISS THE REFEREN CE APPLICATION HAVING TAX IMPACT OF RS. 1,80,000/- FOLLOWING THE DECISIO N OF HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT V/S. PITHWA ENGINEERI NG WORKS (2005), 276 ITR 519 (BOM) AND HONBLE M.P. HIGH COURT IN THE CA SE OF CIT V/S. ASHOKKUMAR MANIBHAI PATEL & CO., 317 ITR 386 (M.P.) . THE HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT V/S. PITHWA EN GINEERING WORKS (SUPRA) IN PARA NO.6, HAS EXPRESSED FOLLOWING VIEW AT PAGE NO. 520 : THIS COURT CAN VERY WELL TAKE JUDICIAL NOTICE OF T HE FACT THAT BY PASSAGE OF TIME MONEY VALUE HAS GONE DOWN, THE COS T OF LITIGATION EXPENSES HAS GONE UP, THE ASSESSES ON THE FILE OF T HE DEPARTMENTS HAVE BEEN INCREASED CONSEQUENTLY, THE BURDEN ON THE DEPARTMENT HAS ALSO INCREASED TO A TREMENDOUS EXTENT. THE COR RIDORS OF THE SUPERIOR COURTS ARE CHOCKED WITH HUGE PENDENCY OF CASES. IN THIS VIEW OF THE MATTE, THE BOARD HAS RIGHTLY TAKEN A DE CISION NOT TO FILE REFERENCES IF THE TAX EFFECT LESS THAN RS.2 LAKHS.T HE SAME POLICY FOR OLD MATTERS NEED TO BE ADOPTED BY THE DEPARTMENT. I N OUR VIEW, THE BOARDS CIRCULAR DATED MARCH 27, 2000 IS VERY MUCH APPLICABLE EVEN TO THE OLD REFERENCES WHICH ARE STILL UNDECIDE D. THE DEPARTMENT IS NOT JUSTIFIED IN PROCEEDING WITH THE OLD REFERENCES WHEREIN THE TAX IMPACT IS MINIMAL. THUS, THERE IS N O JUSTIFICATION TO PROCEED WITH DECADES OLD REFERENCES HAVING NEGLIGIB LE TAX EFFECT. ITA . NOS. 861 & 862/PN/2010 SHRI JAGDISHCHANDRA G MITTAL ETC. PAGE OF 5 4 IN VIEW OF THESE DECISIONS, INCLUDING DECISION OF H ONBLE JURISDICTIONAL BOMBAY HIGH COURT, WE COME TO THE CONCLUSION THAT T HE CBDT GUIDELINES FOR THE REVENUE NOT TO PREFER APPEAL AGAINST FIRST APPELLATE ORDER BEFORE THE TRIBUNAL HAVING TAX EFFECT UPTO RS. 3 LACS IS V ERY MUCH APPLICABLE EVEN IN PENDING APPEALS. IN THE CASE OF CIT V/S. C IT V/S. MADHUKAR K. INAMDAR (HUF) (SUPRA, THE HONBLE JURISDICTIONAL HI GH COURT HAS BEEN PLEASED TO HOLD AGAIN THAT CBDT CIRCULAR DT.15 TH MAY 2008 WOULD BE VERY MUCH APPLICABLE TO THE PENDING CASES REQUIRING DEPA RTMENT TO WITHDRAW THE CASES WHEREIN TAX EFFECT IS LESS THAN THE PRESC RIBED MONETARY LIMITS. THE HONBLE HIGH COURT HAS BEEN FURTHER PLEASED TO HOLD THAT EVEN IF THE QUESTION OF LAW IS OF RECURRING NATURE, EVEN THEN T HE REVENUE IS NOT EXPECTED TO FILE APPEALS IN SUCH CASES, IF THE TAX IMPACT IS LESS THAN THE MONETARY LIMIT FIXED BY THE CBDT. WE, THUS, RESPECTFULLY FOLLOWING THESE DECISIONS IN CLUDING DECISIONS OF HONBLE BOMBAY HIGH COURT IN AFORESAID CASES HAVING BINDING EFFECT ON THE TRIBUNAL, HOLD THAT THESE APPEALS HAVING MONET ARY IMPACT BELOW RS. 3 LACS ARE NOT MAINTAINABLE AS THE APPEALS HAVE BEE N PREFERRED BY THE REVENUE IN VIOLATION OF THE ABOVE STATED GUIDELINES OF THE CBDT READ WITH SECTION 268A OF THE I.T. ACT. THE SAME ARE DISMIS SED AS SUCH. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 30TH NOVEMBER 2011. SD/- SD/- ( D. KARUNAKARA RAO ) ACCOUNTANT MEMBER (I.C. SUDHIR ) JUDICIAL MEMBER PUNE, DATED THE 30TH NOVEMBER, 2011 US COPY OF THE ORDER IS FORWARDED TO : ITA . NOS. 861 & 862/PN/2010 SHRI JAGDISHCHANDRA G MITTAL ETC. PAGE OF 5 5 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT (CENTRAL), NAGPUR 4. THE CIT(A)-I, NASHIK 4. THE D.R. B BENCH, PUNE 5. GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL PUNE