The Asstt. Commr. Income Tax, Circle-5, RAJKOT-GUJARAT V. M/s Roto Screentech Pvt. Ltd., RAJKOT-GUJARAT

MA 01/RJT/2017

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 1128 (ITAT-RAJKOT)
• Duration Of Justice: 2 year(s) 9 month(s) 3 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 12-12-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2005-2006
• Appeal Filed On: 09-03-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Audit objection; Tax effect; TDS

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH, RAJKOT [ CONDUCTED THROUGH E-COURT AT AHMEDABAD ] BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI WASEEM AHMED, ACCOUNTANT MEMBER MA NO.1/RJT/2017 (IN I.T.A. NO.616/RJT/2014) (ASSESSMENT YEAR : 2005-06 ) THE ACIT CIRCLE-1(2) RAJKOT VS. M/S.ROTO SCREENTECH PVT.LTD. 301, SILVER CHAMBERS TAGORE ROAD RAJKOT [PAN NO.AABCR 3206 K] ( APPLICANT ) .. ( RESPONDENT ) APPLICANT BY : SHRI ANILKUMAR DAS, SR.DR RESPONDENT BY : SHRI KALPESH DOSHI, AR DATE OF HEARING 05/12/2019 DATE OF PRONOUNCEMENT 12/12 /2019 O R D E R PER WASEEM AHMED, ACCOUNTANT MEMBER: THE PRESENT MISCELLANEOUS APPLICATION IS DIRECTE D AT THE INSTANCE OF THE REVENUE POINTING OUT APPARENT ERROR IN THE ORDER OF THE TRIBUNAL DATED 15/04/2016 PASSED IN ITA NO.616/RJT/2014. 2. DURING THE COURSE OF HEARING, LD.COUNSEL FOR THE ASSESSEE SHRI KALPESH DOSHI ATTENDED. IT IS PLEADED IN THE APPLICATION THAT AS SESSEE HAS FILED ITS RETURN OF INCOME ON 25/10/2005 SHOWING TOTAL INCOME OF RS.63,52,120/ - FOR THE YEAR UNDER CONSIDERATION. THE CIT(A) HAS DELETED THE ENTIRE ADDITION MADE BY THE ASSESSING MA NO.1/RJT/2017 (IN ITA NO.616/RJT/2014) ACIT VS. M/S.ROTO SCREENTECH PVT.LTD. ASST.YEAR 2005-06 - 2 - OFFICER OF RS.27,69,103/- ON ACCOUNT OF DISALLOWANC E MADE U/S.40(A)(IA) OF THE ACT FOR NON-DEDUCTION OF TDS ON FREIGHT AND CLEARING & FORWARDING CHARGES. 3. DISSATISFIED WITH THE ORDER OF THE CIT(A), THE REVENUE CAME UP IN APPEAL BEFORE THE TRIBUNAL. THE TRIBUNAL DISMISSED THE APPEAL OF THE REVENUE VIDE ORDER DATED 03/12/2018. THE TRIBUNAL WAS OF THE VIEW THAT TAX EFFECT INVOLVED IN THIS CASE IS LESS THAN RS.20 LAKHS BECAUSE THE TAX RELIEF GRANTE D BY THE CIT(A) IS LESS THAN RS.20 LAKHS AND, THEREFORE, IN VIEW OF THE BOARD I NSTRUCTION BEARING NO.3 OF 2018 DATED 11/07/2018 SUCH APPEAL IS NOT MAINTAINABLE BE FORE THE TRIBUNAL. 4. IT HAS BEEN FURTHER PLEADED THAT INSTRUCTION NO. 3/2018 CONTAINS EXCEPTIONAL CLAUSE AT SL.NO.8 OF THE INSTRUCTION. ACCORDING TO SUB-CLAUSE (C) OF CLAUSE 8 IF A REVENUE AUDIT OBJECTION HAS BEEN ACCEPTED BY THE DE PARTMENT, THEN THE APPEALS OF SUCH ISSUES WOULD BE CONTESTED ON MERIT AND WILL NO T BE WITHDRAWN BY VIRTUE OF THESE INSTRUCTIONS. SINCE IT WAS A CASE, REOPENED ON AUDIT OBJECTION, THEREFORE IT FALLS WITHIN THE EXCEPTIONAL CLAUSE PROVIDED IN THE INSTRUCTION. 5. HOWEVER, DURING THE COURSE OF HEARING, WE HAVE C ONFRONTED THE LD.DR WITH THE CBDT INSTRUCTION BEARING NO.5/2017 DATED 23/01/ 2017. THESE INSTRUCTIONS PROVIDE THAT EVEN IF AN ASSESSMENT IS BEING REOPENE D ON ACCOUNT OF AUDIT OBJECTION BUT THE ADDITIONS ARE DELETED BY THE CIT(A) ON MERI T, THEN FOR THE PURPOSE OF CHALLENGING THE ORDER OF CIT(A) IN FURTHER APPEAL T HE CASE WOULD BE REQUIRED TO BE EXAMINED ON MERIT. SIMPLY THE APPEAL WOULD NOT BE FILED BECAUSE THE CASE FALLS WITHIN THE EXCEPTIONAL CLAUSE OF THE CBDT INSTRUCTI ON FOR NOT FILING THE APPEAL WHERE THE TAX EFFECT BY VIRTUE OF RELIEF GRANTED BY THE CIT(A) IS LESS THAN THE MA NO.1/RJT/2017 (IN ITA NO.616/RJT/2014) ACIT VS. M/S.ROTO SCREENTECH PVT.LTD. ASST.YEAR 2005-06 - 3 - MONETARY LIMIT FOR FILING SUCH APPEALS. IN OTHER W ORDS, THE DEPARTMENT HAS TO ASSESS THE MERITS OF THE DISPUTE INVOLVED AND THEY WILL NOT FILE FURTHER APPEAL AGAINST THE ORDER OF THE CIT(A) OR ITAT IN A MECHAN ICAL MANNER. THE RELEVANT PARA-3 OF CIRCULAR NO.17 READS AS UNDER:- 3. HOWEVER, IT HAS BEEN NOTICED THAT PARA 8(C) OF CIRCULAR NO.21/2015, REGARDING CASES WHERE ADDITION MADE ON ACCOUNT OF R EVENUE AUDIT OBJECTION IS DELETED, IS BEING ERRONEOUSLY INTERPRETED AND APPEA LS ARE BEING MECHANICALLY FILED BY THE DEPARTMENT WITHOUT PROPER EXAMINATION OF THE CASE ON MERITS. THIS IS CONTRARY TO THE INSTRUCTIONS CONTAINED IN CIRCULAR NO.21/2015 AND CIRCULAR NO.8/2016. IT IS THEREFORE, CLARIFIED THAT THE IMP ORT AND INTENT OF PARA 8 OF THE CIRCULAR NO.21/2015 IS THAT EVEN ON ISSUES MENTIONE D IN THE SAID PARA, APPEALS AGAINST THE ADVERSE JUDGMENT SHOULD ONLY BE FILED O N MERITS. 5.1. WE HAVE ALSO CONFRONTED WITH THE LD.DR WITH TH E JUDGEMENT OF HONBLE BOMBAY HIGH COURT IN THE CASE OF PR.CIT VS. NAWANY CONSTRUCTION CO. (P.) LTD. REPORTED IN 98 TAXMANN.COM 294 (BOMBAY). 5.2. THE HONBLE BOMBAY HIGH COURT HAS CONSIDERED T HIS CIRCULAR AND OBSERVED THAT MERE RAISING OF THIS AUDIT OBJECTION IS NOT SU FFICIENT FOR RECALL OF THE ORDER. THE RELEVANT PART OF THE DISCUSSION OF THE HONBLE BOMB AY HIGH COURT HAS HELD AS UNDER: 8. IT IS CONCEDED THAT WHILE SEEKING TO RESTORE I NCOME TAX APPEAL NO.254 OF 2013 ON THE FILE OF THIS COURT, NEITHER THE REVENUE S CIRCULAR DATED 11-7-2018 IS REFERRED NOR ANY CONDITION THEREIN. IF THE CONDITI ON NOW RELIED UPON IS WITH REGARD TO THE REVENUE AUDIT OBJECTION, THEN, MERE RAISING OF THIS OBJECTION IN TERMS OF THIS CIRCULAR IS NOT ENOUGH. THE REVENUE WILL HAVE TO POINT OUT THAT THIS AUDIT OBJECTION HAS BEEN ACCEPTED BY THE DEPARTMENT. WE HAVE NO SUCH RECORD BEFORE US. 9. IN THE CIRCUMSTANCES, WE FIND THAT THIS IS AN A TTEMPT TO GET OVER THE BINDING CIRCULARS AND IN ANY CASE WE SHALL NOT ALLOW THE RE VENUE TO GET OVER THEM IN THIS MANNER. THE CIRCULARS CONTINUE TO BIND THE REVENUE AND IF THEY CONTAIN ANY MA NO.1/RJT/2017 (IN ITA NO.616/RJT/2014) ACIT VS. M/S.ROTO SCREENTECH PVT.LTD. ASST.YEAR 2005-06 - 4 - CONDITIONS, WHETHER SUCH CONDITIONS ARE ATTRACTED O R NOT WOULD HAVE TO BE PROVED AND ESTABLISHED BY THE REVENUE. ONCE THERE IS NO S UCH RECORD BEFORE US, WE DO NOT COUNTENANCE THE ORAL REQUEST OF MR. PINTO. CONSEQU ENTLY, WE DO NOT SEE ANY REASON TO ENTERTAIN THIS APPEAL. IT IS DISMISSED. 6. THE LD.DR WAS UNABLE TO CONTROVERT THE ABOVE POS ITION. 7. ON DUE CONSIDERATION OF ALL THESE FACTS AND CIRC ULAR OF THE BOARD, I.E. CIRCULAR NO.5 OF 2017 IN THE LIGHT OF HONBLE BOMBA Y HIGH COURT DECISION, WE ARE OF THE VIEW THAT DEPARTMENT HAS NOT BROUGHT ANY SUB STANTIAL MATERIAL ON THE RECORD POINTING OUT THAT APPEAL WAS FILED AFTER EVALUATION OF MERIT ON THE ISSUES INVOLVED. IT SOUGHT TO RECALL THE ORDER OF THE TRIBUNAL MEREL Y ON THE BASIS OF AUDIT OBJECTION, WHICH IS NOT SUFFICIENT FOR RECALLING THE TRIBUNAL ORDER. THEREFORE, WE DO NOT FIND ANY ERROR IN THE ORDER OF THE TRIBUNAL AND THE MISC ELLANEOUS APPLICATION IS REJECTED. 7. IN THE RESULT, MISCELLANEOUS APPLICATION FILED B Y THE REVENUE IS DISMISSED. THIS ORDER PRONOUNCED IN OPEN COURT ON 12 / 12 /2019 SD/- SD/- ( RAJPAL YADAV ) ( WASEEM AHMED ) JUDICIAL MEMBER ACCOU NTANT MEMBER AHMEDABAD; DATED 12/ 12 /2019 .., .../ T.C. NAIR, SR. PS MA NO.1/RJT/2017 (IN ITA NO.616/RJT/2014) ACIT VS. M/S.ROTO SCREENTECH PVT.LTD. ASST.YEAR 2005-06 - 5 - / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ! ' #! / CONCERNED CIT 4. ' #! ( ) / THE CIT(A)-IV, RAJKOT 5. '() ! , , /DR,ITAT, RAJKOT 6. )45 67 / GUARD FILE. / BY ORDER, '! ! //TRUE COPY// / ( DY./ASSTT.REGISTRAR) !', / ITAT, RAJKOT 1. DATE OF DICTATION 06.12.2019 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 10.12.2019 3. OTHER MEMBER 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 5. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S.12.12.19 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 12.12.19 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 10. DATE OF DESPATCH OF THE ORDER