Deputy Commissioner of Income-tax, Central Circle-1(3), Bengaluru V. M/s. Sraddha Builders, Bengaluru

ITA 899/BANG/2018

• Counselvise Citation: [2018] 122 COUNSELVISE.COM (IT) 2617 (ITAT-BANGALORE)
• Duration Of Justice: 6 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-10-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2014-2015
• Appeal Filed On: 22-03-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Tax effect

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, BANGALORE BENCH C BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI A.K GARODIA, ACCOUNTANT MEMBER ITA NO.899/BAN G/2018 (ASST. YEAR 2014-15) THE DY. COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE-1(3), BENGALURU . APPELLANT VS. M/S SRADDHA BUILDERS, NO.3092, OPP. ESI STAFF QTRS. 6 TH B MAIN, NEAR ESI HOSPITAL DOUBLE ROAD, HAL 2 ND STAGE, INDIRANAGAR, BENGALURU. . RESPONDENT PAN AAUFS4043D. CO NO.87/BANG/2018 (ASST. YEAR 2014-15) (BY ASSESSEE) APPELLANT BY : DR. P.V PRADEEP KUMAR, ADDL. CIT RESPONDENT BY : SHRI GAJENDRA RAO, ADVOCATE DATE OF HEARING : 24-09-2018 DATE OF PRONOUNCEMENT : 05-10-2018 O R D E R PER SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER : THIS APPEAL IS PREFERRED BY THE REVENUE AGAINST TH E ORDER OF THE CIT(A), INTER ALIA , ON FOLLOWING GROUNDS: ITA NO.899 & CO 87/B/18 2 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE, THE LD. CIT(A) ERRED IN DIRECTING THE ASSESSI NG OFFICER TO LEVY PENALTY AT THE RATE OF 10% ON UNDIS CLOSED INCOME ADMITTED U/S 271AAB(1)(A) INSTEAD OF AT THE RATE OF 30% OF UNDISCLOSED INCOME ADMITTED U/S 271AAB(1((C)? 2. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) ERRED IN NOT CONSIDERING THE F ACT THAT ASSESSEE FAILED TO FULFILL THE CUMULATIVE CONDITION S LAID DOWN IN VARIOUS SUB-CLAUSES OF CLAUSE (A) OF SUB-SE CTION (1) OF SECTION 271AAB? 3. ANY OTHER GROUNDS THAT MAY ARISE AT THE TIME OF HEARING. 2. AT THE OUTSET, IT IS OBSERVED THAT THE TAX EFFE CT INVOLVED IN THIS APPEAL IS BELOW RS.20 LAKHS. THE CBDT, WITH A VIEW TO REDUCE UNNECESSARY LITIGATION ON THEIR PART, HAS ISSUED A CIRCULAR NO. 3/2018 DATED 11 TH JULY, 2018, WHEREIN THEY HAVE REVISED THE MONETARY LIMITS FOR FILING OF APPEALS BY THE DEPARTMENT BEFORE THE INCO ME TAX APPELLATE TRIBUNAL, HIGH COURTS AND SUPREME COURT. INSOFAR A S THE TRIBUNAL IS CONCERNED, THE MONETARY LIMIT SPECIFIED THEREIN IS RS.20 LAKHS AND THE CONCERNED AUTHORITY HAS TO WITHDRAW ITS APPEAL OR I T NEED NOT PRESS THE SAME IF TAX EFFECT IS LESS THAN RS.20 LAKHS. IT IS FURTHER SPECIFIED THAT THE TAX EFFECT INDICATED THEREIN IS APPLICABLE TO ALL P ENDING APPEALS, THOUGH THEY ARE FILED BY THE REVENUE PRIOR TO THE ISSUANCE OF THE SAID CIRCULAR. IT WAS ALSO CLARIFIED THAT THE ASSESSING OFFICER HA S TO CALCULATE THE TAX EFFECT SEPARATELY FOR EVERY ASSESSMENT YEAR IN RESP ECT OF THE DISPUTED ISSUE/S IN THE CASE OF EVERY ASSESSEE. IF, IN THE CASE OF AN ASSESSEE, THE DISPUTED ISSUE ARISES IN MORE THAN ONE YEAR(S), APP EAL(S) CAN BE FILED IN ITA NO.899 & CO 87/B/18 3 RESPECT OF SUCH ASSESSMENT YEAR(S) IN WHICH TAX EFF ECT IN RESPECT OF THE DISPUTED ISSUE EXCEEDS THE MONETARY LIMIT SPECIFIED . IN OTHER WORDS, IF THERE ARE A NUMBER OF YEARS, IF THE TAX EFFECT IS L ESS THAN THE SPECIFIED LIMIT IN ONE YEAR, APPEAL CANNOT BE FILED OR THE SA ME HAS TO BE WITHDRAWN FOR THAT YEAR, FOR WANT OF TAX EFFECT. H OWEVER, AN EXCEPTION IS MADE TO THIS DIRECTION WITH REGARD TO A COMBINED ORDER PASSED BY THE FIRST APPELLATE AUTHORITY. IF IN ONE OF THE YEARS THE TAX EFFECT IS MORE THAN RS.20 LAKHS AND THE REVENUE DECIDES TO FILE AN APPEAL, IN RESPECT OF OTHER YEARS COVERED BY THE SAID ORDER ALSO, REVENUE IS ELIGIBLE TO FILE APPEAL, EVEN THOUGH THE TAX EFFECT IN EACH OF THOSE YEARS IS LESS THAN RS.20 LAKHS. IT WAS ALSO CLARIFIED THAT MERELY BEC AUSE THE APPEAL IS DISMISSED FOR WANT OF TAX EFFECT, IT DOES NOT COME IN THE WAY OF THE DEPARTMENT IN FILING APPEAL FOR OTHER YEARS(S), AND IT DOES NOT MEAN THAT THE DEPARTMENT HAS ACQUIESCED THE ISSUE. 3. THE ABOVE CIRCULAR WAS SPECIFICALLY MADE APPLICA BLE TO ALL PENDING APPEALS. IN THE PRESENT CASE, THE TAX EFFE CT ON THE ADDITION IN DISPUTE, WHICH WAS DELETED BY THE CIT(A) BY THE IMP UGNED ORDER IS INDISPUTABLY BELOW 20LAKHS. 4. THE LEGISLATURE IN ITS WISDOM HAS INTRODUCED SEC TION 268A OF THE INCOME TAX ACT, 1961, WHEREBY THE BOARD IS EMPOWERE D TO ISSUE ORDERS/INSTRUCTIONS/DIRECTIONS TO THE INCOME-TAX AU THORITIES, FIXING THE MONETARY LIMITS FOR THE PURPOSE OF REGULATING THE F ILING OF APPEALS. IN THE LIGHT OF THE CIRCULAR DATED 11.07.2018, ISSUED BY THE CBDT IN EXERCISE OF THE POWERS CONFERRED IN IT BY SUBSECTI ON (1) OF SECTION ITA NO.899 & CO 87/B/18 4 268A, WE ARE OF THE VIEW THAT THE APPEAL FILED HERE IN SHOULD NOT HAVE BEEN PRESSED BY THE REVENUE. THE LEARNED DEPARTMEN TAL REPRESENTATIVE FAIRLY ADMITTED THAT THE REVENUE EFF ECT IN THIS APPEAL IS LESS THAN THE PRESCRIBED LIMIT IN PARA-3 OF THE ABO VE CIRCULAR ISSUED BY THE CBDT. HAVING REGARD TO THE CIRCUMSTANCES OF TH E CASE, WE DISMISS THE APPEAL OF THE REVENUE. 5. HOWEVER, THE REVENUE IS AT LIBERTY TO MOVE APPRO PRIATE APPLICATION/PETITION IN CASE IT IS FOUND THAT THE C ASE IS COVERED BY ONE OF THE EXCEPTION(S) CARVED OUT IN THE SAID CIRCULAR. CROSS-OBJECTION 7. THE CROSS OBJECTION IS PREFERRED BY THE ASSESSEE . 8. DURING THE COURSE OF HEARING, THE LD COUNSEL FOR THE ASSESSEE HAS CANDIDLY ADMITTED THAT HE HAS GOT THE RELIEF FROM T HE CIT(A) AND SINCE THE APPEAL OF THE REVENUE IS DISMISSED ON ACCOUNT O F TAX EFFECT, THE CROSS-OBJECTION BECOMES INFRUCTUOUS. ACCORDINGLY, WE DISMISS THE CROSS-OBJECTION BEING INFRUCTUOUS. HENCE, APPEAL O F THE REVENUE AND CROSS- OBJECTION OF THE ASSESSEE ARE DISMISSED. 9. IN THE RESULT, THE APPEAL FILED BY THE REVENUE A ND THE CROSS- OBJECTION FILED BY THE ASSESSEE ARE DISMISSED. ITA NO.899 & CO 87/B/18 5 ORDER PRONOUNCED IN THE OPEN COURT ON 5 TH OCT, 2018 . SD/- SD/- (A.K GARODIA) (SUNI L KUMAR YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER BANGALORE DATED : 05/10/2018 VMS COPY TO :1. THE ASSESSEE 2. THE REVENUE 3.THE CIT CONCERNED. 4.THE CIT(A) CONCERNED. 5.DR 6.GF BY ORDER ASST. REG ISTRAR, ITAT, BANGALORE ITA NO.899 & CO 87/B/18 6 1. DATE OF DICTATION 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER . 3. DATE ON WHICH THE APPROVED DRAFT COMES TO SR. P. S ... 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER .. 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. P.S. .. 6. DATE OF UPLOADING THE ORDER ON WEBSITE .. 7. IF NOT UPLOADED, FURNISH THE REASON FOR DOING SO .. 8. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK .. 9. DATE ON WHICH ORDER GOES FOR XEROX & ENDORSEMENT.. 10. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 11. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER . 12. THE DATE ON WHICH THE FILE GOES TO DISPATCH SEC TION FOR DISPATCH OF THE TRIBUNAL ORDER . 13. DATE OF DESPATCH OF ORDER. ..