ACIT, New Delhi V. Smt. Devansh Jain, New Delhi

ITA 880/DEL/2017

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 3138 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 6 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-08-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2013-2014
• Appeal Filed On: 15-02-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V K JIWANI
• Assessee Lawyers: V K GARG
• Keywords: Audit objection; Tax effect
• Section: 115JB; 12AA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH B, NEW DELHI BEFORE SH. N. K. SAINI, AM AND MS. SUCHITRA KAMBLE, JM ITA NO. 880/DEL/2017 : ASSTT. YEAR : 2013-14 ASSTT. COMMISSIONER OF INCOME TAX, CIRCLE-52(1), ROOM NO. 1405, 14 TH FLOOR E-2 BLOCK, DR. S.P. MUKHERJEE CIVIC CENTER NEW DELHI VS DEVANSH JAIN 6 TH FLOOR, 612-618, NARAIN MANZIL, 23, BARAKHAMBA ROAD NEW DELHI (APPELLANT) (RESPONDENT) PAN NO. AFTPJ1036R ASSESSEE BY : SH. V.K. GARG, ADV. REVENUE BY : SH. V.K. JIWANI, SR. DR DATE OF HEARING : 23.08.2018 DATE OF PRONOUNCEMENT : 27 .08.2018 ORDER PER N. K. SAINI, AM: THIS IS AN APPEAL BY THE DEPARTMENT AGAINST THE ORD ER DATED 15.11.2016 OF LD. CIT(A)-18, NEW DELHI. 2. DURING THE COURSE OF HEARING, THE LEARNED COUNSE L FOR THE ASSESSEE AT THE VERY OUTSET STATED THAT THE TAX EFF ECT IN THIS APPEAL IS LESS THAN RS.20,00,000/-, THEREFORE, THE DEPARTMENT OUGHT NOT TO HAVE FILED THIS APPEAL IN VIEW OF THE CIRCULAR NO. 3/2018 ISSUED BY THE CBDT AND THE PROVISIONS CONTAINED IN SECTION 26 8A OF THE INCOME TAX ACT, 1961 (HEREINAFTER TO BE REFERRED AS THE ACT). ITA NO. 880/DEL/2017 DEVANSH JAIN 2 3. ON THE OTHER HAND, THE LD. SR. D.R., ALTHOUGH SU PPORTED THE ORDER OF THE ASSESSING OFFICER, BUT COULD NOT CONTR OVERT THIS FACT THAT TAX EFFECT IN THIS APPEAL IS LESS THAN RS.20,0 0,000/-. 4. AFTER CONSIDERING THE SUBMISSIONS OF BOTH THE PA RTIES AND THE MATERIAL AVAILABLE ON RECORD, IT IS NOTICED THAT SE CTION 268A HAS BEEN INSERTED BY THE FINANCE ACT, 2008 WITH RETROSP ECTIVE EFFECT FROM 01/04/99. THE SAID SECTION 268 OF THE ACT PROV IDES THAT THE BOARD MAY ISSUE INSTRUCTION OR DIRECTIONS TO THE OT HER INCOME-TAX AUTHORITIES FIXING MONETARY LIMITS FOR NOT FILING T HE APPEALS BEFORE THE APPELLATE TRIBUNAL OR THE COURTS, SAID INSTRUCT IONS/DIRECTIONS ARE BINDING ON THE INCOME TAX AUTHORITIES. 5. IT IS NOTICED THAT THE CBDT HAS ISSUED CIRCULAR NO. 3 OF 2018 DATED 11.07.2018, VIDE WHICH IT HAS REVISED THE MON ETARY LIMIT TO RS.20,00,000/- FOR NOT FILING THE APPEAL BEFORE TH E TRIBUNAL, THE SAID CIRCULAR READS AS UNDER: SUBJECT: REVISION OF MONETARY LIMITS FOR FILING OF APPEALS BY THE DEPARTMENT BEFORE INCOME TAX APPELLATE TRIBU NAL, HIGH COURTS AND SLPS/APPEALS BEFORE SUPREME COURT- MEASURES FOR REDUCING LITIGATION-REG. REFERENCE IS INVITED TO BOARDS CIRCULAR NO. 21 OF 2015 DATED 10.12.2015 WHEREIN MONETARY LIMITS AND OTHER CONDITIONS FOR FILING DEPARTMENTAL APPEALS (IN INCO ME-TAX MATTERS) BEFORE INCOME TAX APPELLATE TRIBUNAL, HIGH COURTS AND SLPS/ APPEALS BEFORE SUPREME COURT WERE SPECIFIED. 2. IN SUPERSESSION OF THE ABOVE CIRCULAR, IT HAS BE EN DECIDED BY THE BOARD THAT DEPARTMENTAL APPEALS MAY BE FILED ON MERITS BEFORE INCOME TAX APPELLATE TRIBUNA L AND HIGH COURTS AND SLPS/ APPEALS BEFORE SUPREME COURT ITA NO. 880/DEL/2017 DEVANSH JAIN 3 KEEPING IN VIEW THE MONETARY LIMITS AND CONDITIONS SPECIFIED BELOW. 3. HENCEFORTH, APPEALS/ SLPS SHALL NOT BE FILED IN CASES WHERE THE TAX EFFECT DOES NOT EXCEED THE MONETARY L IMITS GIVEN HEREUNDER: S NO APPEALS/SLPS IN INCOME-TAX MATTERS MONETARY LIMIT (IN RS) 1 BEFORE APPELLATE TRIBUNAL 20,00,000/- 2 BEFORE HIGH COURT 50,00,000/- 3 BEFORE SUPREME COURT 1,00,00,000/- IT IS CLARIFIED THAT AN APPEAL SHOULD NOT BE FILED MERELY BECAUSE THE TAX EFFECT IN A CASE EXCEEDS THE MONETA RY LIMITS PRESCRIBED ABOVE. FILING 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 TH E TAX THAT WOULD HAVE BEEN CHARGEABLE HAD SUCH TOTAL INCO ME BEEN REDUCED BY THE AMOUNT OF INCOME IN RESPECT OF THE ISSUES AGAINST WHICH APPEAL IS INTENDED TO BE FILED (HEREINAFTER REFERRED TO AS DISPUTED ISSUES). FURT HER, TAX EFFECT SHALL BE TAX INCLUDING APPLICABLE SURCHARGE AND CESS. HOWEVER, THE TAX WILL NOT INCLUDE ANY INTERES T THEREON, EXCEPT WHERE CHARGEABILITY OF INTEREST ITSELF IS IN DISPUTE. IN CASE THE CHARGEABILITY OF INTEREST IS THE ISSUE UND ER DISPUTE, THE AMOUNT OF INTEREST SHALL BE THE TAX EFFECT. IN CASES WHERE RETURNED LOSS IS REDUCED OR ASSESSED AS INCOM E, THE TAX EFFECT WOULD INCLUDE NOTIONAL TAX ON DISPUTED A DDITIONS. IN CASE OF PENALTY ORDERS, THE TAX EFFECT WILL MEAN QUANTUM OF PENALTY DELETED OR REDUCED IN THE ORDER TO BE AP PEALED AGAINST. 5. THE ASSESSING OFFICER SHALL CALCULATE THE TAX EF FECT SEPARATELY FOR EVERY ASSESSMENT YEAR IN RESPECT OF THE DISPUTED ISSUES IN THE CASE OF EVERY ASSESSEE. IF, IN THE CASE OF AN ASSESSEE, THE DISPUTED ISSUES ARISE IN MORE T HAN ONE ASSESSMENT YEAR, APPEAL CAN BE FILED IN RESPECT OF SUCH ITA NO. 880/DEL/2017 DEVANSH JAIN 4 ASSESSMENT YEAR OR YEARS IN WHICH THE TAX EFFECT IN RESPECT OF THE DISPUTED ISSUES EXCEEDS THE MONETARY LIMIT S PECIFIED IN PARA 3. NO APPEAL SHALL BE FILED IN RESPECT OF A N ASSESSMENT YEAR OR YEARS IN WHICH THE TAX EFFECT IS LESS THAN THE MONETARY LIMIT SPECIFIED IN PARA 3. IN OTHER WO RDS, HENCEFORTH, APPEALS CAN BE FILED ONLY WITH REFERENC E TO THE TAX EFFECT IN THE RELEVANT ASSESSMENT YEAR. HOWEVER , IN CASE OF A COMPOSITE ORDER OF ANY HIGH COURT OR APPELLATE AUTHORITY, WHICH INVOLVES MORE THAN ONE ASSESSMENT YEAR AND COMMON ISSUES IN MORE THAN ONE ASSESSMENT YEAR, APPEALS SHALL BE FILED IN RESPECT OF ALL SUCH ASSES SMENT YEARS EVEN IF THE TAX EFFECT IS LESS THAN THE PRESC RIBED MONETARY LIMITS IN ANY OF THE YEAR(S), IF IT IS DEC IDED TO FILE APPEAL IN RESPECT OF THE YEAR(S) IN WHICH TAX EFFEC T EXCEEDS THE MONETARY LIMIT PRESCRIBED. IN CASE WHERE A COMP OSITE ORDER/JUDGEMENT INVOLVES MORE THAN ONE ASSESSEE, EA CH ASSESSEE SHALL BE DEALT WITH SEPARATELY. 6. FURTHER, WHERE INCOME IS COMPUTED UNDER THE PROV ISIONS OF SECTION 115JB OR SECTION 115JC, FOR THE PURPOSES OF DETERMINATION OF TAX EFFECT, TAX ON THE TOTAL INC OME ASSESSED SHALL BE COMPUTED AS PER THE FOLLOWING FOR MULA- (A B) + (C D) WHERE, A = THE TOTAL INCOME ASSESSED AS PER THE PROVISIONS OTHER THAN THE PROVISIONS CONTAINED IN SECTION 115JB OR S ECTION 115JC (HEREIN CALLED GENERAL PROVISIONS); B = THE TOTAL INCOME THAT WOULD HAVE BEEN CHARGEABL E HAD THE TOTAL INCOME ASSESSED AS PER THE GENERAL PROVISIONS BEEN REDUCED BY THE AMOUNT OF THE DISPUT ED ISSUES UNDER GENERAL PROVISIONS; C = THE TOTAL INCOME ASSESSED AS PER THE PROVISIONS CONTAINED IN SECTION 115JB OR SECTION 115JC; D = THE TOTAL INCOME THAT WOULD HAVE BEEN CHARGEABL E HAD THE TOTAL INCOME ASSESSED AS PER THE PROVISIONS CONTAINED IN SECTION 115JB OR SECTION 1I5JCWAS REDU CED ITA NO. 880/DEL/2017 DEVANSH JAIN 5 BY THE AMOUNT OF DISPUTED ISSUES UNDER THE SAID PROVISIONS: HOWEVER, WHERE THE AMOUNT OF DISPUTED ISSUES IS CON SIDERED BOTH UNDER THE PROVISIONS CONTAINED IN SECTION 115J B OR SECTION 115JC AND UNDER GENERAL PROVISIONS, SUCH AM OUNT SHALL NOT BE REDUCED FROM TOTAL INCOME ASSESSED WHI LE DETERMINING THE AMOUNT UNDER ITEM D. 7. IN A CASE WHERE APPEAL BEFORE A TRIBUNAL OR A C OURT IS NOT FILED ONLY ON ACCOUNT OF THE TAX EFFECT BEING L ESS THAN THE MONETARY LIMIT SPECIFIED ABOVE, THE PR. COMMISS IONER OF INCOME-TAX/ COMMISSIONER OF INCOME TAX SHALL SPECIF ICALLY RECORD THAT EVEN THOUGH THE DECISION IS NOT ACCEPT ABLE, APPEAL IS NOT BEING FILED ONLY ON THE CONSIDERATION THAT THE TAX EFFECT IS LESS THAN THE MONETARY LIMIT SPECIFIE D IN THIS CIRCULAR. FURTHER, IN SUCH CASES, THERE WILL BE NO PRESUMPTION THAT THE INCOME-TAX DEPARTMENT HAS ACQUIESCED IN THE DECISION ON THE DISPUTED ISSUES. THE INCOME-TAX DEPARTMENT SHALL NOT BE PRECLUDED FROM F ILING AN APPEAL AGAINST THE DISPUTED ISSUES IN THE CASE O F THE SAME ASSESSEE FOR ANY OTHER ASSESSMENT YEAR, OR IN THE CASE OF ANY OTHER ASSESSEE FOR THE SAME OR ANY OTHER ASS ESSMENT YEAR, IF THE TAX EFFECT EXCEEDS THE SPECIFIED MONET ARY LIMITS. 8. IN THE PAST, A NUMBER OF INSTANCES HAVE COME TO THE NOTICE OF THE BOARD, WHEREBY AN ASSESSEE HAS CLAIME D RELIEF FROM THE TRIBUNAL OR THE COURT ONLY ON THE GROUND T HAT THE DEPARTMENT HAS IMPLICITLY ACCEPTED THE DECISION OF THE TRIBUNAL OR COURT IN THE CASE OF THE ASSESSEE FOR A NY OTHER ASSESSMENT YEAR OR IN THE CASE OF ANY OTHER ASSESSE E FOR THE SAME OR ANY OTHER ASSESSMENT YEAR, BY NOT FILING AN APPEAL ON THE SAME DISPUTED ISSUES. THE DEPARTMENTAL REPRESENTATIVES/COUNSELS MUST MAKE EVERY EFFORT TO BRING TO THE NOTICE OF THE TRIBUNAL OR THE COURT THAT THE AP PEAL IN SUCH CASES WAS NOT FILED OR NOT ADMITTED ONLY FOR T HE REASON OF THE TAX EFFECT BEING LESS THAN THE SPECIFIED MON ETARY LIMIT AND, THEREFORE, NO INFERENCE SHOULD BE DRAWN THAT T HE DECISIONS RENDERED THEREIN WERE ACCEPTABLE TO THE DEPARTMENT. ACCORDINGLY, THEY SHOULD IMPRESS UPON T HE ITA NO. 880/DEL/2017 DEVANSH JAIN 6 TRIBUNAL OR THE COURT THAT SUCH CASES DO NOT HAVE A NY PRECEDENT VALUE AND ALSO BRING TO THE NOTICE OF THE TRIBUNAL/ COURT THE PROVISIONS OF SUB SECTION (4) O F SECTION 268A OF THE INCOME-TAX ACT, 1961 WHICH READ AS UNDE R : (4) THE APPELLATE TRIBUNAL OR COURT, HEARING SUCH APPEAL OR REFERENCE, SHALL HAVE REGARD TO THE ORDER S, INSTRUCTIONS OR DIRECTIONS ISSUED UNDER SUB-SECTION (1) AND THE CIRCUMSTANCES UNDER WHICH SUCH APPEAL OR APPLICATION FOR REFERENCE WAS FILED OR NOT FILED IN RESPECT OF ANY CASE. 9. AS THE EVIDENCE OF NOT FILING APPEAL DUE TO THI S CIRCULAR MAY HAVE TO BE PRODUCED IN COURTS, THE JUDICIAL FOL DERS IN THE OFFICE OF PR. CSIT/CSIT MUST BE MAINTAINED IN A SYSTEMIC MANNER FOR EASY RETRIEVAL. 10. ADVERSE JUDGMENTS RELATING TO THE FOLLOWING ISS UES SHOULD BE CONTESTED ON MERITS NOTWITHSTANDING THAT THE TAX EFFECT ENTAILED IS LESS THAN THE MONETARY LIMITS SP ECIFIED IN PARA 3 ABOVE OR THERE IS NO TAX EFFECT: (A) WHERE THE CONSTITUTIONAL VALIDITY OF THE PROVIS IONS OF AN ACT OR RULE IS UNDER CHALLENGE, OR (B) WHERE BOARDS ORDER, NOTIFICATION, INSTRUCTION OR CIRCULAR HAS BEEN HELD TO BE ILLEGAL OR ULTRA FIRES , OR (C) WHERE REVENUE AUDIT OBJECTION IN THE CASE HAS B EEN ACCEPTED BY THE DEPARTMENT, OR (D) WHERE THE ADDITION RELATES TO UNDISCLOSED FOREI GN ASSETS/ BANK ACCOUNTS. 11. THE MONETARY LIMITS SPECIFIED IN PARA 3 ABOVE S HALL NOT APPLY TO WRIT MATTERS AND DIRECT TAX MATTERS OTHER THAN INCOME TAX. FILING OF APPEALS IN OTHER DIRECT TAX M ATTERS SHALL CONTINUE TO BE GOVERNED BY RELEVANT PROVISION S OF STATUTE AND RULES. FURTHER, IN CASES WHERE THE TAX EFFECT IS NOT QUANTIFIABLE OR NOT INVOLVED, SUCH AS THE CASE OF ITA NO. 880/DEL/2017 DEVANSH JAIN 7 REGISTRATION OF TRUSTS OR INSTITUTIONS UNDER SECTIO N 12A/ 12AA OF THE IT ACT, 1961 ETC., FILING OF APPEAL SHA LL NOT BE GOVERNED BY THE LIMITS SPECIFIED IN PARA 3 ABOVE AN D DECISION TO FILE APPEALS IN SUCH CASES MAY BE TAKEN ON MERITS OF A PARTICULAR CASE. 12. IT IS CLARIFIED THAT THE MONETARY LIMIT OF RS. 20 LAKHS FOR FILING APPEALS BEFORE THE ITAT WOULD APPLY EQUALLY TO CROSS OBJECTIONS UNDER SECTION 253(4) OF THE ACT. CROSS O BJECTIONS BELOW THIS MONETARY LIMIT, ALREADY FILED, SHOULD BE PURSUED FOR DISMISSAL AS WITHDRAWN/ NOT PRESSED. FILING OF CROSS OBJECTIONS BELOW THE MONETARY LIMIT MAY NOT BE CONS IDERED HENCEFORTH. SIMILARLY, REFERENCES TO HIGH COURTS AN D SLPS/ APPEALS BEFORE SUPREME COURT BELOW THE MONETARY LIM IT OF RS. 50 LAKHS AND RS. 1 CRORE RESPECTIVELY SHOULD BE PURSUED FOR DISMISSAL AS WITHDRAWN/ NOT PRESSED. REFERENCES BEFORE HIGH COURT AND SLPS/ APPEALS BELOW THESE LIMITS MAY NOT BE CONSIDERED HENCEFORTH. 13. THIS CIRCULAR WILL APPLY TO SLPS/ APPEALS/ CRO SS OBJECTIONS/ REFERENCES TO BE FILED HENCEFORTH IN SC/HCS/TRIBUNAL AND IT SHALL ALSO APPLY RETROSPECTI VELY TO PENDING SLPS/ APPEALS/ CROSS OBJECTIONS/REFERENCES. PENDING APPEALS BELOW THE SPECIFIED TAX LIMITS IN P ARE 3 ABOVE MAY BE WITHDRAWN/ NOT PRESSED. 14. THE ABOVE MAY BE BROUGHT TO THE NOTICE OF ALL CONCERNED. 15. THIS ISSUES UNDER SECTION 268A OF THE INCOME-TA X ACT 1961. 6. FROM CLAUSE 12 & 13 OF THE ABOVE SAID CIRCULAR I T IS CLEAR THAT THESE INSTRUCTIONS ARE APPLICABLE TO THE PENDING AP PEALS ALSO AND AS PER CLAUSE 13, THERE IS CLEAR CUT INSTRUCTION TO TH E DEPARTMENT TO WITHDRAW OR NOT TO PRESS THE APPEALS FILED BEFORE T HE ITAT WHEREIN TAX EFFECT IS LESS THAN RS.20,00,000/-. THESE INSTR UCTIONS ARE OPERATIVE RETROSPECTIVELY TO THE PENDING APPEALS. ITA NO. 880/DEL/2017 DEVANSH JAIN 8 7. KEEPING IN VIEW THE CBDT CIRCULAR NO. 3 OF 2018 DATED 11.07.2018 AND ALSO THE PROVISIONS OF SECTION 268A OF INCOME TAX ACT, 1961, WE ARE OF THE VIEW THAT THE REVENUE SHOU LD NOT HAVE FILED THE INSTANT APPEAL BEFORE THE TRIBUNAL. 8. IN THE RESULT, THE APPEAL OF THE DEPARTMENT IS D ISMISSED. (ORDER PRONOUNCED IN THE COURT ON 27/08/2018) SD/- SD/- (SUCHITRA KAMBLE) (N. K. SAINI) JUDICIAL MEMBER ACCOUNTANT M EMBER DATED: 27/08/2018 *BINITA* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITA NO. 880/DEL/2017 DEVANSH JAIN 9 DATE OF DICTATION 23.08.2018 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 23.08.2018 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE OTHER MEMBER 23.08.2018 DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. PS/PS 23.08.2018 DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT 27.08.2018 DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. PS/PS 27 .08.2018 DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WEBSITE OF ITAT 27 .08.2018 DATE ON WHICH THE FILE GOES TO THE BENCH CLERK .08.2018 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER DATE OF DISPATCH OF THE ORDER