ACIT, Central Circle - 3(3), Kolkata , Kolkata V. M/s ELIN ELECTRONICS LTD., Kolkata

ITSSA 161/KOL/2017

• Counselvise Citation: [2018] 122 COUNSELVISE.COM (IT) 3671 (ITAT-KOLKATA)
• Duration Of Justice: 3 month(s) 7 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 14-03-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2012-2013
• Appeal Filed On: 07-12-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Tax effect
• Section: 14A; 12

Judgement Text

I.T. (S.S.) A. NO S . 16 1, 162 /KOL/2017 & ITA NO. 2424 / KOL ./20 1 7 ASSESSMENT YEAR S : 20 12 - 20 13, 2013 - 14 & 2014 - 2015 & C.O. NOS. 11, 12 & 13/KOL/2018 (IN I.T. (S.S.) A. NO S. 161, 162/KOL/2017 & ITA NO. 2424/KOL./2017) ASSESSMENT YEAR S : 2012 - 2013, 2013 - 14 & 2014 - 2015 PAGE 1 OF 4 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA D BENCH, KOLKATA BEFORE SHRI P.M. JAGTAP, ACCOUNTANT MEMBER AND SHRI S.S. VISWANETHRA RAVI , JUDICIAL MEMBER I.T (S.S.) .A. NO S . 161, 162 /KOL/2017 & I . T . A . NO. 2424 / KOL / 20 1 7 ASSESSMENT Y EAR S : 20 12 - 20 13, 201 3 - 2014 & 2014 - 2015 ASSISTANT COMMISSIONER OF INCOME TAX, ......... ... ... ...... . ........ . .APPELLANT CENTRAL CIRCLE - 3(3), KOLKATA, AAYAKAR BHAWAN POORVA, E.M. BYE - PASS, 110, SHANTI PALLY, 4 TH FLOOR, KOLKATA - 700 107 - VS. - M/S. ELIN ELECTRONICS LIMITED,..... ...................... .... .. .......... .....RESPONDENT 143/1/1, COTTON STREET, 3 RD FLOOR, KOLKATA - 700 007 [PAN: AAACE 6449 G] & C.O. NOS. 11, 12 & 13/KOL/2018 ( IN IT (SS) A NOS. 161, 162 /KOL/2017 & I . T . A . NO. 2424 / KOL / 20 17) ASSESSMENT Y EAR S : 2012 - 2013, 2013 - 2014 & 2014 - 2015 M/S. ELIN ELECTRONICS LIMITED,................................................CROSS OBJECTOR 143/1/1, COTTON STREET, 3 RD FLOOR, KOLKATA - 700 007 [PAN: AAACE 6449 G] - VS. - DEPUTY/ASSISTANT COMMISSIONER OF INCOME TAX, .....................RESPONDENT CENTRAL CIRCLE - 3(3), KOLKATA, AAYAKAR BHAWAN POORVA, E.M. BYE - PASS, 110, SHANTI PALLY, 4 TH FLOOR, KOLKATA - 700 107 APPEARANCES BY: SHRI SU NIL SURANA , ADVOCATE , FOR THE ASSESSEE SHRI A.K. TIWARI , CIT, D.R. . , FOR THE DEPARTMEN T D ATE OF CONCLUDING THE HEARING : FEBRUARY 1 5 , 2 01 8 DATE OF PRONOUNCING THE ORDER : MARCH 14 , 201 8 O R D E R PER SHRI P.M. JAGTAP, A.M. : - TH E S E THREE APPEAL S ARE PREFERRED BY THE REVENUE AGAINST THREE SEPARATE ORDERS ALL DATED 30.10.2017 PASSED BY T HE L D. COMMISSIONER OF INCOME TAX (APPEALS) - 21 , I.T. (S.S.) A. NO S . 16 1, 162 /KOL/2017 & ITA NO. 2424 / KOL ./20 1 7 ASSESSMENT YEAR S : 20 12 - 20 13, 2013 - 14 & 2014 - 2015 & C.O. NOS. 11, 12 & 13/KOL/2018 (IN I.T. (S.S.) A. NO S. 161, 162/KOL/2017 & ITA NO. 2424/KOL./2017) ASSESSMENT YEAR S : 2012 - 2013, 2013 - 14 & 2014 - 2015 PAGE 2 OF 4 KOLKATA AND SINCE COMMON ISSUE IS INVOLVED THEREIN, THE SAME HAVE BEEN HEARD TOGETHER AND ARE BEING DISPOSED OF BY A SINGLE CONSOLIDATED ORDER ALONG WITH THE CORRESPONDING CROSS OBJECTIONS FILED BY THE ASSESS EE FOR THE SAKE OF CONVENIENCE. 2. THE SOLITARY COMMON ISSUE INVOLVED IN THESE APPEALS RELATES TO THE DELETION BY THE LD. CIT(APPEALS) OF THE ADDITIONS OF RS.8,78,867/ - , RS.8,40,003/ - AND RS.6,77,497/ - MADE BY THE ASSESSING OFFICER BY WAY OF DISALLOWANCE U NDER SECTION 14A FOR A.Y. 2012 - 13, 2013 - 14 & 2014 - 15 RESPECTIVELY. 3. AT THE TIME OF HEARING BEFORE THE TRIBUNAL, THE LD. COUNSEL FOR THE ASSESSEE, AT THE OUTSET, HAS POINTED OUT THAT THE TAX EFFECT INVOLVED IN EACH OF THE THREE APPEALS FILED BY THE REVENU E IS LESS THAN THE MONETARY LIMIT OF RS.10 LAKHS FIXED BY THE CBDT FOR FILING THE APPEALS BEFORE THE TRIBUNAL AS PER CIRCULAR NO. 21/2015 DATED 10.12.2015 AND THE SAID APPEALS, THEREFORE, ARE NOT MAINTAINABLE. THE LD. D.R. HAS NOT DISPUTED THAT THE TAX EFF ECT INVOLVED IN THESE THREE APPEALS FILED BY THE REVENUE IS LESS THAN THE MONETARY LIMIT OF RS.10 LAKHS FIXED BY THE CBDT FOR FILING THE APPEAL BY THE REVENUE BEFORE THE TRIBUNAL. HE, HOWEVER, HAS INVITED OUR ATTENTION TO THE GROUNDS FILED BY THE ASSESSEE ALONG WITH THE PRESENT APPEALS WHEREIN THE REASON FOR FILING THESE APPEALS DESPITE LOW TAX EFFECT IS GIVEN AS VIOLATION OF CBDT CIRCULAR NO. 5 OF 2014 DATED 11.02.2014 BY THE LD. CIT(APPEALS). NO DOUBT, THERE ARE CERTAIN EXCEPTIONS GIVEN BY THE CBDT CIRCUL AR NO. 21/2015 (SUPRA), WHERE THE APPEALS ARE REQUIRED TO BE FILED BY THE REVENUE EVEN IF THE TAX EFFECT ENTAILED IS LESS THAN THE MONETARY LIMIT. HOWEVER, AS RIGHTLY POINTED OUT BY THE LD. COUNSEL FOR THE ASSESSEE, ONE OF THE EXCEPTIONS SO GIVEN IS WHERE BOARD S ORDER, NOTIFICATION, INSTRUCTION OF CIRCULAR HAS BEEN HELD TO BE ILLEGAL OR ULTRA VIRES IN THE IMPUGNED ORDERS. A PERUSAL OF THE IMPUGNED ORDERS OF THE LD. CIT(APPEALS) CLEARLY SHOWS THAT HE HAS NOT HELD ANY BOARDS ORDER, NOTIFICATION, INSTRUCTION OR CIRCULAR TO BE ILLEGAL OR ULTRA VIRES AND, THEREFORE, THESE APPEALS FILED BY THE REVENUE, IN OUR OPINION, ARE NOT COVERED BY ANY EXCEPTIONS GIVEN IN PARA NO. 8 OF THE CBDT CIRCULAR NO. 21/2015 (SUPRA). WE, THEREFORE, FIND MERIT IN THE CONTENTION OF THE LD. COUNSEL FOR THE ASSESSEE THAT THESE APPEALS FILED BY THE REVENUE INVOLVING TAX EFFECT OF LESS THAN THE MONETARY LIMIT OF RS.10 LAKHS FIXED BY THE CBDT ARE NOT MAINTAINABLE AND THE SAME ARE LIABLE TO BE DISMISSED. WE ORDER ACCORDINGLY. I.T. (S.S.) A. NO S . 16 1, 162 /KOL/2017 & ITA NO. 2424 / KOL ./20 1 7 ASSESSMENT YEAR S : 20 12 - 20 13, 2013 - 14 & 2014 - 2015 & C.O. NOS. 11, 12 & 13/KOL/2018 (IN I.T. (S.S.) A. NO S. 161, 162/KOL/2017 & ITA NO. 2424/KOL./2017) ASSESSMENT YEAR S : 2012 - 2013, 2013 - 14 & 2014 - 2015 PAGE 3 OF 4 4. IN THE CROSS OBJECTIONS, THE ASSESSEE, BESIDES SUPPORTING THE IMPUGNED ORDERS OF THE LD. CIT(APPEALS) IN DELETING THE DISALLOWANCE MADE BY THE ASSESSING OFFICER UNDER SECTION 14A, HAS ALSO CLAIMED COST OF APPEALS FROM THE DEPARTMENT. IN SUPPORT OF THIS CLAIM OF THE ASS ESSEE, THE LD. COUNSEL FOR THE ASSESSEE HAS RELIED ON THE DECISION OF THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF ACIT VS. - EPSON INDIA PVT. LIMITED (WRIT PETITION NO. 12913/2017 DATED 09.01.2018). 5. WE HAVE CAREFULLY GONE THROUGH THE JUDGMENT OF THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF EPSON INDIA PVT. LIMITED (SUPRA) AND FIND THAT THE FACTS INVOLVED IN THE SAID CASE ARE MATERIALLY DIFFERENT FROM THE FACTS INVOLVED IN THE PRESENT CASE. IN THE SAID CASE, A WRIT PETITION WAS FILED BY THE DEPARTM ENT CHALLENGING THE INTERIM STAY ORDER PASSED BY THE ITAT AND AFTER CONSIDERING ALL THE FACTS OF THE CASE, IT WAS FOUND BY THE HONBLE KARNATAKA HIGH COURT THAT THE ENTIRE DEMAND RAISED BY THE REVENUE AUTHORITIES PRIMA FACIE WAS NOT EVEN SUSTAINABLE AND TH E GRANT OF ABSOLUTE STAY AGAINST THE RECOVERY WOULD HAVE BEEN MORE APPROPRIATE, RATHER THAN THE ITAT CALLING UPON THE ASSESSEE TO DEPOSIT A FURTHER SUM OF RS.2,00,00,000/ - . THEIR LORDSHIPS FELT THAT ITAT PERHAPS TO SERVE THE INTEREST OF THE REVENUE LEANED TO SOME EXTENT IN FAVOUR OF THE REVENUE AND DESPITE THIS POSITION, THE REVENUE INSTEAD OF PURSUING HEARING OF THE APPEAL BEFORE THE ITAT, CHOSE TO FILE THE WRIT PETITION BEFORE THE HONBLE HIGH COURT, WHICH WAS ABSOLUTELY MISCONCEIVED REMEDY AVAILED BY THE M. HONBLE KARNATAKA HIGH COURT ALSO TOOK NOTE OF THE FACT THAT THE REVENUE HAD BEEN SEEKING ADJOURNMENT FROM THE ITAT ON THE DATES FIXED BY IT FOR HEARING THE APPEAL ITSELF , WHICH ACCORDING TO THEIR LORDSHIPS, ADDED INSULT TO THE INJURY. HONBLE KARNATAKA HIGH COURT CONSIDERED THIS APPROACH OF THE CONCERNED REVENUE AUTHORITIES IN DEALING WITH THE SERIOUS MATTERS LIKE INVOLV ING CONSTITUTIONAL REMEDY AS IRRESPONSIBLE RESULTING INTO WASTE OF PUBLIC MONEY AND COURTS TIME AND DEPRECA TING THE SAME, DISMISSED T HE WRIT PETITION FILED BY THE DEPARTMENT WITH EXEMPLARY COSTS ON THE OFFICIALS INVOLVED IN FILING THE SAID WRIT PETITION. IN OUR OPINION, THE FACTS INVOLVED IN THE PRESENT CASE ARE ENTIRELY DIFFERENT FROM THE FACTS INVOLVED IN THE CASE OF EPSON INDIA PVT. LIMITED (SUPRA), INASMUCH AS, THE PRESENT APPEALS INVOLVING THE LOW TAX EFFECT HAVE BEEN FILED BY THE REVENUE POINTING OUT SPECIFICALLY IN THE GROUNDS RAISED THEREIN THE FACT OF LOW TAX EFFECT AS WELL AS GIVING REASONS ALSO SPECIFICALLY FOR FILING THE SAI D APPEALS AS VIOLATION OF THE CBDT CIRCULAR. AT THE TIME OF HEARING , WHEN IT I.T. (S.S.) A. NO S . 16 1, 162 /KOL/2017 & ITA NO. 2424 / KOL ./20 1 7 ASSESSMENT YEAR S : 20 12 - 20 13, 2013 - 14 & 2014 - 2015 & C.O. NOS. 11, 12 & 13/KOL/2018 (IN I.T. (S.S.) A. NO S. 161, 162/KOL/2017 & ITA NO. 2424/KOL./2017) ASSESSMENT YEAR S : 2012 - 2013, 2013 - 14 & 2014 - 2015 PAGE 4 OF 4 WAS POINTED OUT TO THE LD. D.R. THAT THE EXCEPTIONS GIVEN IN THE CBDT CIRCULAR NO. 21/2015 DO NOT COVER VIOLATION OF BOARDS CIRCULAR , BUT IT COVERS ONLY THE ADVERSE JUDGMENT WHER E THE BOARDS CIRCULAR HAS BEEN HELD TO BE ILLEGAL OR ULTRA VIRES, HE HAS READILY ACCEPTED THIS POSITION AND HAS NOT PURSUED OR INSISTED FOR HEARING OF THESE APPEALS ON MERIT. HAVING REGARD TO ALL THESE FACTS OF THE CASE, WE ARE OF THE VIEW THAT IT IS NOT A FIT CASE TO IMPOSE ANY COST ON REVENUE OR ANY REVENUE AUTHORITIES AS SOUGHT BY THE ASSESSEE. WE ACCORDINGLY DISMISS THE CROSS OBJECTIONS FILED BY THE ASSESSEE. 6 . IN THE RESULT, THE APPEAL S OF THE REVENUE AND CROSS OBJECTIONS OF THE ASSESSEE ARE DISMISS ED . ORDER PRONOUNCED IN THE OPEN COURT ON 14 TH DAY OF MARCH , 201 8 . SD/ - SD/ - ( S.S. VISWANETHRA RAVI ) (P.M. JAGTAP) JUDICIAL MEMBER ACCOUNTANT MEMBER KOLKATA , THE 14 TH D AY OF MARCH , 201 8 COPIES TO : (1) ASSISTANT COMMISSI ONER OF INCOME TAX, CENTRAL CIRCLE - 3(3), KOLKATA, AAYAKAR BHAWAN POORVA, E.M. BYE - PASS, 110, SHANTI PALLY, 4 TH FLOOR, KOLKATA - 700 107 (2) M/S. ELIN ELECTRONICS LIMITED, 143/1/1, COTTON STREET, 3 RD FLOOR, KOLKATA - 700 007 (3) COMMISSIONER OF INCOME TA X (APPEALS ) - 21 , KOLKATA ; ( 4 ) COMMISSIONER OF INCOME TAX - , ( 5 ) THE DEPARTMENTAL REPRESENTATIVE ( 6 ) GUARD FILE BY ORDER SENIOR PRIVATE SECRETARY , HE AD OF OFFICE/DDO, INCOME TAX APPELLATE TRIBUNAL , KOLKATA B ENCHES, KOLKATA LAHA/SR. P.S .