ACIT,Central Circle-2(4), Kolkata, Kolkata V. M/s. Asian Tea & Exports Pvt. Ltd, Kolkata

ITSSA 143/KOL/2017

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 0436 (ITAT-KOLKATA)
• Duration Of Justice: 11 month(s) 1 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 13-09-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2010-2011
• Appeal Filed On: 12-10-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A K TIWARI
• Assessee Lawyers: NIRMAL AGARWAL STA FF
• Keywords: Tax effect
• Section: 143(3); 153A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH : KOLKATA [BEFORE HONBLE SHRI M.BALAGANESH, AM & SHRI S.S . VISWANETHRA RAVI, JM ] I.T(SS).A NOS. 142,14 3&144/KOL/2017 ASSESSMENT YEARS: 2009-1 0, 2010-11 & 2011-12 ACIT, CC-2(1), KOLKATA -VS- M/S ASIAN TEA & EXPORTS PVT. LTD. [PAN: AACCA 4877 C ] (APPELLANT) (RESPONDENT) FOR THE APPELLANT : SHRI A.K. TIWARI, CIT( DR) FOR THE RESPONDENT : SHRI NIRMAL AGARWAL, STA FF DATE OF HEARING : 13.09.2018 DATE OF PRONOUNCEMENT : 13.09.2018 ORDER PER BENCH: 1. THESE APPEALS BY THE REVENUE ARISE OUT OF THE SEPARATE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS)-20, KOLKATA [IN SHORT THE LD CIT(A)] IN APPEAL NOS. 223,224&225/CIT(A)-20/CC-2(4)/16-17 DA TED 21.02.2017 AGAINST THE ORDER PASSED BY THE DCIT, CC-2(4), KOLKATA [ I N SHORT THE LD AO] UNDER SECTION 143(3) READ WITH SECTION 153A OF THE INCOM E TAX ACT, 1961 (IN SHORT THE ACT) DATED 31.03.2016 FOR THE ASSESSMENT YE ARS 2009-10, 2010-11 & 2011-12 RESPECTIVELY. 2. RECENTLY THE CBDT HAS ISSUED CIRCULAR NO. 3 /2018 DATED 11.07.2018, WHEREBY THE MONETARY LIMITS FOR FILING OF APPEALS BY THE DEPARTMENT BEFORE INCOME TAX APPELLATE TRIBUNAL AND HIGH COURTS AND SLP BEFORE SUPREME COURT 2 IT(SS)A NOS.142,143&144/KOL/2017 M/S ASISAN TEA & EXPORTS PVT. LTD. A.YRS.2009-10, 2010-11 & 2011-12 2 HAVE BEEN INCREASED AS MEASURE FOR REDUCING LITIGAT ION. THE REVISED MONETARY LIMITS LAID DOWN IN PARA-3 OF THIS CIRCULAR AND THE MANNER OF COMPUTING TAX EFFECT AS LAID DOWN IN PARA-4 OF THIS CIRCULAR ARE AS FOLL OWS: 3 . HENCEFORTH, APPEALS/ SLPS SHALL NOT BE FILED I N CASES WHERE THE TAX EFFECT DOES NOT EXCEED THE MONETARY LIMITS GIVEN HEREUNDER : SL. 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 MONETARY 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 THE TAX THAT WOULD HAVE BEEN CH ARGEABLE HAD SUCH TOTAL INCOME BEEN REDUCED BY THE AMOUNT OF INCOME IN RESP ECT OF THE ISSUES AGAINST WHICH APPEAL IS INTENDED TO BE FILED (HEREINAFTER R EFERRED TO AS 'DISPUTED ISSUES). FURTHER, 'TAX EFFECT' SHALL BE TAX INCLUDING APPLIC ABLE SURCHARGE AND CESS. HOWEVER, THE TAX WILL NOT INCLUDE ANY INTEREST THER EON, EXCEPT WHERE CHARGEABILITY OF INTEREST ITSELF IS IN DISPUTE. IN CASE THE CHARGEABILITY OF INTEREST IS THE ISSUE UNDER DISPUTE, THE AMOUNT OF INTEREST SHA LL 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 ADDITIONS. IN CASE OF PENALTY ORDERS, THE TAX EFFECT WILL MEAN QUANTUM OF PENALTY DELETED OR REDU CED IN THE ORDER TO BE APPEALED AGAINST. 3. IN PARA-13 OF THE SAID CIRCULAR IT HAS FURTHER BEEN CLARIFIED THAT THE REVISED MONETARY LIMITS WILL APPLY RETROSPECTIVELY. THE RE LEVANT PARA-13 OF THE CIRCULAR READS THUS: 13. THIS CIRCULAR WILL APPLY TO SLPS/APPEALS/CROSS OBJECTIONS/REFERENCES TO BE FILED HENCEFORTH IN SC/HCS/TRIBUNAL AND IT SHALL AL SO APPLY RETROSPECTIVELY TO PENDING SLPS/APPEALS/CROSS OBJECTIONS/REFERENCES. P ENDING APPEALS BELOW THE SPECIFIED TAX LIMITS IN PARA 3 ABOVE MAY BE WITHDRA WN/NOT PRESSED. 3 IT(SS)A NOS.142,143&144/KOL/2017 M/S ASISAN TEA & EXPORTS PVT. LTD. A.YRS.2009-10, 2010-11 & 2011-12 3 4. IN THE PRESENT CASE FOR ASSESSMENT YEAR 2009-1 0 THE DISPUTED ADDITION OF RS. 32,24,592/- AND TAX EFFECT THEREON IS RS. 9,96, 399/-, FOR ASSESSMENT YEAR 2010-11 THE DISPUTED ADDITION OF RS. 51,90,803/- AN D TAX EFFECT THEREON IS RS. 16,03,958/- AND FOR ASSESSMENT YEAR 2011-12 THE DIS PUTED ADDITION OF RS. 44,69,221/- AND TAX EFFECT THEREON IS 13,80,989/-. SO, THE TAX EFFECT IN THESE APPEALS BY THE REVENUE ARE LESS THAN RS.20,00,000/ -. THOUGH THESE APPEALS HAD BEEN FILED BY THE REVENUE ON 12.10.2017 AND WERE WITHIN THE MONETARY LIMIT IN THE FORM OF TAX EFFECT FOR FILING APPEALS BEFORE TR IBUNAL, IN VIEW OF PARA-13 OF THE CIRCULAR OF CBDT, EVEN SUCH APPEALS WILL BE GOVERNE D BY THE NEW MONETARY LIMITS LAID DOWN IN THE CBDT CIRCULAR NO.3/2018 REF ERRED TO ABOVE. 5. IT IS A SETTLED LAW THAT THE CIRCULARS ISSUED BY CBDT ARE BINDING ON THE REVENUE. THIS POSITION WAS CONFIRMED BY THE APEX CO URT IN THE CASE OF COMMISSIONER OF CUSTOMS VS INDIAN OIL CORPORATION L TD. REPORTED IN 267 ITR 272 WHEREIN THEIR LORDSHIPS EXAMINED THE EARLIER DE CISIONS OF THE APEX COURT WITH REGARD TO BINDING NATURE OF THE CIRCULAR AND L AID DOWN THAT WHEN A CIRCULAR ISSUED BY THE BOARD REMAINS IN OPERATION THEN THE R EVENUE IS BOUND BY IT AND CANNOT BE ALLOWED TO PLEAD THAT IT IS NOT VALID OR THAT IT IS CONTRARY TO THE TERMS OF THE STATUTE. THE APPEAL UNDER CONSIDERATION HAS CER TAINLY BEEN FILED CONTRARY TO THE CIRCULAR ISSUED BY THE CBDT CIRCULAR NO.3 DATED 11. 07.2018. 5.1. IN THE EVENT, THE REVENUE FINDS AT A LATER POI NT OF TIME THAT THE TAX EFFECT IN THESE APPEALS ARE MORE THAN RS.20 LAKHS OR DESPITE LOW TAX EFFECT THE APPEALS OF THE REVENUE ARE MAINTAINABLE, THE REVENUE IS AT LIB ERTY TO MOVE THIS TRIBUNAL FOR 4 IT(SS)A NOS.142,143&144/KOL/2017 M/S ASISAN TEA & EXPORTS PVT. LTD. A.YRS.2009-10, 2010-11 & 2011-12 4 RECALLING OF THIS ORDER. AN ADJOURNMENT PETITION FI LED BY THE ASSESSEE FOR THESE THREE ASSESSMENT YEARS ARE REJECTED AS THESE LOW TA X EFFECT. 6. IN VIEW OF THE ABOVE, WE HOLD THAT THE APPEALS F ILED BY THE DEPARTMENT, AGAINST THE IMPUGNED ORDER OF THE LD. CIT(A), IS CO NTRARY TO THE POLICY DECISION OF THE DEPARTMENT AND AS SUCH THE APPEALS FILED BY THE DEPARTMENT IS DISMISSED IN LIMINE . 7. IN THE RESULT, THE APPEALS BY THE REVENUE ARE DISMISSED. ORDER PRONOUNCED IN THE COURT ON 13 .09.2018 SD/- SD/- [S.S.VISWANETHRA RAVI] [ M.BALAGA NESH ] JUDICIAL MEMBER ACCOUNTANT ME MBER DATED : 13.09.2018 SB, SR. PS COPY OF THE ORDER FORWARDED TO: 1. PRADIP MAITRA, ROOM NO. 406, ACIT, CC-2(4), KOLK ATA, AAYAKAR BHAWAN POORVA, 110, SHANTIPALLY, KOLKATA-700107. 2. M/S ASIAN TEA & EXPORTS PVT. LTD., SIKKIM COMME RCE HOUSE, 4/1, MIDDLETON STREET, KOLKATA-700071. 3. C.I.T(A)- 4. C.I.T.- KOLKATA. 5. CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY BY ORDER SENIOR PRIVAT E SECRETARY HEAD OF OFFICE/D.D.O., ITAT, KOLKATA BENCHE S