ACIT, CC-2(1), KOLKATA, Kolkata V. Shri Sunil Kumar Khemka, Patna

ITSSA 96/KOL/2016

• Counselvise Citation: [2017] 122 COUNSELVISE.COM (IT) 3347 (ITAT-KOLKATA)
• Duration Of Justice: 10 month(s) 5 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 25-07-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2010-2011
• Appeal Filed On: 19-09-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MD USMAN
• Assessee Lawyers: S JHAJHARIA
• Keywords: Tax effect
• Section: 143(3); 153A

Judgement Text

1 IT(SS)A NO.93-98/KOL/2014 & C.O. NOS. 55-60/KOL/201 7-SUNIL KUMAR KHEMKA A.Y.2007-08 TO 2012-13 IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH B KOL KATA [BEFORE HONBLE SHRI A.T. VARKEY, JM & SHRI M. BA LAGANESH, AM ] IT(SS)A NOS.93 TO 98/KOL/2016 ASSESSMENT YEARS : 2007-08 TO 2012-13 A.C.I.T., CIRCLE-2(1), -VERSUS- SHRI SUNI L KUMAR KHEMKA KOLKATA KOLKATA (PAN:ADGPK 7822 F) (APPELLANT) (RESPONDENT) C.O. NOS. 55 TO 60/KOL/2017 A/O IT(SS)A NOS.93 TO 98/KOL/2016 ASSESSMENT YEARS : 2007-08 TO 2012-13 SHRI SUNIL KUMAR KHEMKA -VERSUS- A.C.I.T., C IRCLE-2(1), KOLKATA KOLKATA (PAN:ADGPK 7822 F) (CROSS OBJECTOR) (RESPONDENT) FOR THE REVENUE: MD. USMAN, CIT DR FOR THE ASSESSEE: SHRI S. JHAJHARIA, FCA AND SHRI S UJOY SEN, ADVOCATE DATE OF HEARING : 25.07.2017. DATE OF PRONOUNCEMENT : 25.07.2017. ORDER PER BENCH: 1. THESE APPEALS BY THE REVENUE AND CROSS OBJECTIO NS FILED BY THE ASSESSEE ARISE OUT OF THE ORDERS OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) -20, KOLKATA [ IN SHORT THE LD CITA] IN APPEAL NOS. 30-35/CIT(A)-20/C C-2(1)/15-16 DATED 29.07.2016 AGAINST THE ORDERS PASSED BY THE DCIT, CIRCLE-2(1), KOLKATA [ IN SHORT THE LD AO] UNDER SECTION 143(3) R.W.S 153A OF THE INCOME TAX A CT, 1961 (IN SHORT THE ACT) DATED 26.03.2015 FOR THE ASSESSMENT YEARS 2007-08 T O 2012-13 RESPECTIVELY. 2 IT(SS)A NO.93-98/KOL/2014 & C.O. NOS. 55-60/KOL/201 7-SUNIL KUMAR KHEMKA A.Y.2007-08 TO 2012-13 REVENUE APPEALS 2. RECENTLY THE CBDT HAS ISSUED CIRCULAR NO. 2 1/2015, DATED 10TH DECEMBER, 2015, WHEREBY THE MONETARY LIMITS FOR FILING OF AP PEALS BY THE DEPARTMENT BEFORE INCOME TAX APPELLATE TRIBUNAL AND HIGH COURTS AND SLP BEFORE SUPREME COURT HAVE BEEN INCREASED AS MEASURE FOR REDUCING LITIGATION. THE REVISED MONETARY LIMITS LAID DOWN IN PARA-3 OF THIS CIRCULAR AND THE MANNER OF C OMPUTING TAX EFFECT AS LAID DOWN IN PARA-4 OF THIS CIRCULAR ARE AS FOLLOWS: 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 IN INCOME-TAX MATTERS MONETARY LIMIT (IN RS) 1. BEFORE APPELLATE TRIBUNAL 10,00,000/- 2. BEFORE HIGH COURT 20,00,000/- 3. BEFORE SUPREME COURT 25,00,000/- IT IS CLARIFIED THAT AN APPEAL SHOULD NOT BE FILED MERELY BECAUSE THE TAX EFFECT IN A CASE EXCEEDS THE MONETARY LIMITS PRESCRIBED ABOVE. FILIN G 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 RESPECT OF THE ISSUES AGAINST WHICH APPEAL IS INTENDED TO BE FILED (HEREINAFTER REFERRED TO AS 'D ISPUTED ISSUES'). HOWEVER THE TAX WILL NOT INCLUDE ANY INTEREST THEREON, EXCEPT WHERE CHARGEABILITY OF INTEREST ITSELF IS IN DISPUTE. IN CASE THE CHARGEABILITY OF INTEREST IS T HE ISSUE UNDER DISPUTE, THE AMOUNT OF INTEREST SHALL BE THE TAX EFFECT. IN CASES WHERE RE TURNED LOSS IS REDUCED OR ASSESSED AS INCOME, THE TAX EFFECT WOULD INCLUDE NOTIONAL TAX O N DISPUTED ADDITIONS. IN CASE OF PENALTY ORDERS, THE TAX EFFECT WILL MEAN QUANTUM OF PENALTY DELETED OR REDUCED IN THE ORDER TO BE APPEALED AGAINST. 3. IN PARA-10 OF THE SAID CIRCULAR IT HAS FURTHER BEEN CLARIFIED THAT THE REVISED MONETARY LIMITS WILL APPLY RETROSPECTIVELY. THE RE LEVANT PARA-10 OF THE CIRCULAR READS THUS: 10. THIS INSTRUCTION WILL APPLY RETROSPECTIVELY TO PENDING APPEALS AND APPEALS TO BE FILED HENCEFORTH IN HIGH COURTS/ TRIBUNALS. PENDING APPEALS BELOW THE SPECIFIED TAX LIMITS IN PARA 3 ABOVE MAY BE WITHDRAWN/ NOT PRESSE D. APPEALS BEFORE THE SUPREME 3 IT(SS)A NO.93-98/KOL/2014 & C.O. NOS. 55-60/KOL/201 7-SUNIL KUMAR KHEMKA A.Y.2007-08 TO 2012-13 COURT WILL BE GOVERNED BY THE INSTRUCTIONS ON THIS SUBJECT, OPERATIVE AT THE TIME WHEN SUCH APPEAL WAS FILED. 4. IN THE PRESENT CASES, THE TAX EFFECT IN THESE APPEALS BY THE REVENUE ARE LESS THAN RS.10,00,000/-. THOUGH THESE APPEALS HAD BEEN FILE D BY THE REVENUE ON 19.09.2016 WHICH WAS AFTER THE DATE OF ISSUANCE OF CBDT CIRCUL AR NO. 21/2015 PRESCRIBING THE REVISED MONETARY LIMITS. 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 DECISI ONS OF THE APEX COURT WITH REGARD TO BINDING NATURE OF THE CIRCULAR AND LAID DOWN THA T WHEN A CIRCULAR ISSUED BY THE BOARD REMAINS IN OPERATION THEN THE REVENUE IS BOUN D BY IT AND CANNOT BE ALLOWED TO PLEAD THAT IT IS NOT VALID OR THAT IT IS CONTRARY T O THE TERMS OF THE STATUTE. THE APPEALS UNDER CONSIDERATION HAVE CERTAINLY BEEN FILED CONTR ARY TO THE CIRCULAR ISSUED BY THE CBDT CIRCULAR NO.21 DATED 10.12.2015. 5.1. IN THE EVENT THE REVENUE FINDS AT A LATER POIN T OF TIME THAT THE TAX EFFECT IN THESE APPEALS ARE MORE THAN RS.10 LAKHS OR DESPITE LOW TA X EFFECT THE APPEAL OF THE REVENUE IS MAINTAINABLE, THE REVENUE IS AT LIBERTY TO MOVE THIS TRIBUNAL FOR RECALL OF THESE ORDERS. 6. IN VIEW OF THE ABOVE, WE HOLD THAT THE APPEALS F ILED BY THE DEPARTMENT, AGAINST THE IMPUGNED ORDERS OF THE LD. CIT(A), ARE CONTRARY TO THE POLICY DECISION OF THE DEPARTMENT AND AS SUCH THE APPEAL FILED BY THE DEPA RTMENT ARE DISMISSED IN LIMINE . 7. IN THE RESULT, THE APPEALS BY THE REVENUE ARE DISMISSED AS NOT MAINTAINABLE. 4 IT(SS)A NO.93-98/KOL/2014 & C.O. NOS. 55-60/KOL/201 7-SUNIL KUMAR KHEMKA A.Y.2007-08 TO 2012-13 8. IN VIEW OF THE REVENUES APPEALS BEING DISMISSED AS NOT MAINTAINABLE, THE CROSS OBJECTIONS PREFERRED BY THE ASSESSEE ARE DISMISSED AS INFRUCTUOUS. 9. IN THE RESULT, THE APPEALS OF THE REVENUE ARE DI SMISSED AND CROSS OBJECTIONS OF THE ASSESSEE ARE DISMISSED AS INFRUCTUOUS. O RDER PRONOUNCED IN THE OPEN COURT ON 25.07.2017. SD/- SD/- [A.T. VARKEY] [ M. BALAGANESH ] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 25.07.2017. SB, SR. PS. COPY OF THE ORDER FORWARDED TO: 1.ACIT, CC-2(1), KOLKATA 2.SHRI SUNIL KUMAR KHEMKA, 3. CIT(A)-XX, KOLKATA. 4. CIT-X, KOLKATA. 5. CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY BY ORDER, SENIOR PRIVATE SECRETARY HEAD OF OFFICE/D.D.O., ITAT, KOLKATA BENCHES