Assistant Commissioner of Income Tax Circle 2(1), Jabalpur V. M/s Bhaskar Lubricant Private Limited, Jabalpur

MA 11/JAB/2019

• Counselvise Citation: [2022] 104 COUNSELVISE.COM (IT) 4452 (ITAT-JABALPUR)
• Duration Of Justice: 2 year(s) 8 month(s) 13 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 05-05-2022
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2007-2008
• Appeal Filed On: 22-08-2019
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: SACHIN BAJPAI
• Keywords: Tax effect
• Section: 154; 268A; 13

Judgement Text

1 | P a g e IN THE INCOME TAX APPELLATE TRIBUNAL JABALPUR BENCH, JABALPUR (Through web-based video conferencing platform) BEFORE SHRI SANJAY ARORA, HON‟BLE ACCOUNTANT MEMBER & SHRI MANOMOHAN DAS, HON'BLE JUDICIAL MEMBER M.A.No. 11/JAB/2019 (Arising out of I.T.A. No. 200/JAB/2018) (Asst. Year : 2007-08) Applicant by : Shri S.K. Halder, Sr.DR Respondent by : Shri Sachin Bajpai, Advocate Date of hearing : 25/03/2022 Date of pronouncement : 06/05/2022 O R D E R Per Manomohan Das, JM This is a Miscellaneous Application (MA) preferred by the Revenue against the order dated 05-04-2019 passed by the Tribunal on the captioned appeal (No. ITA No.200/Jab/ 2018), passed under section 254(1) of the Income Tax Act, 1961 („the Act‟, hereinafter). 2. The facts of the case are that the Revenue preferred the captioned appeal No. ITA No.200/Jab/2018 against the order of the Ld. Commissioner of Income Tax (Appeals) (“CIT(A)”) dated 09 th July, 2018 on the following grounds of appeal : Dy. CIT, Circle-2(1), Jabalpur. vs. Bhaskar Lubricant Pvt. Ltd., 581, South Civil Lines, Jabalpur. [PAN : AACCB 5446 N] (Applicant) (Respondent) MA No. 11/JAB/2019 (A.Y. 2007-08) Dy CIT vs. M/s. Bhaskar Lubricant P. Ltd. 2 | P a g e “1. On the facts and in the circumstances of the case, the ld. CIT(A) was not justified in deleting the addition of Rs. 14,48,712/- made by the Assessing Officer on account of under valuation of closing stock by inclusion of VAT as per AS 2 vide order under section 154 of the Act. 2. On the facts and in the circumstances of the case, the ld. CIT(A) erred in holding the duties and taxes which are reimbursed subsequently are not to be included as input VAT paid on purchases is eligible for set off without VAT liability, input VAT is not to be included in valuation of inventory as per AS 2. 3. The appellant reserves right to add, alter or modify any grounds at the time of hearing of appeal.” 3.1 During the hearing of the captioned appeal, the ld. counsel for the assessee had invited the attention of the Tribunal that tax effect involved in the appeal is less than Rs. 20,00,000/-, therefore, in view of the Board‟s Circular No. 3/2018 issued by the CBDT and the provisions contained in section 268A of the Act, the Department‟s appeal is bound to be withdrawn by it. 3.2 Against the said submission of the ld. counsel for the assessee, the ld. D.R. could not controvert the fact that the tax effect in the appeal is less than Rs.20,00,000/-. 3.3 The Tribunal, after hearing of both the parties, noticed that Section 268A has been inserted by Finance Act, 2008 with retrospective effect from 01-04-1999. Section 268A of the Act empowered the Board to issue instructions/directions to the other income tax authorities fixing monetary limit for regulating the filing of appeals by the Department before the Appellate Tribunals or Courts. The instructions/directions issued by the Board are binding on the income tax authorities. 3.4 It was also noticed by the Tribunal that the CBDT has issued Circular No. 3 of 2018, dated 11-07-2018, vide which it has revised the monetary limit to Rs.20,00,000/- for not filing the appeal before the Tribunal. The said Circular is MA No. 11/JAB/2019 (A.Y. 2007-08) Dy CIT vs. M/s. Bhaskar Lubricant P. Ltd. 3 | P a g e clear that instructions are applicable for the pending appeals also. As per Clause 13 of the Circular there was clear cut instruction to the Department to withdraw or not to press the appeals filed before the Income Tax Appellate Tribunal wherein tax effect was less than Rs.20,00,000/- and the instructions of the CBDT are operative retrospectively. 3.5 The Tribunal, with the afore-noted observations, was pleased to dismiss the captioned appeal of the Revenue vide order dated 05-04-2019, 4. Being aggrieved by the order of the Tribunal dated 05-04-2019, the Revenue preferred the above Miscellaneous Application (M.A.) No. 11/JAB/2019 before the Tribunal raising the following issue: “Whether on the facts and circumstances of the case, the Hon‟ble ITAT was justified in dismissing the appeal of the Revenue, without considering the fact that the appeal was not withdrawn by the department as the same falls under exceptional conditions specified in para 10(c) of the Board‟s Circular, which was specifically mentioned in the Authorisation issued u/s 253(2) for filing appeal before the Hon‟ble ITAT.” 5. We have heard both of the parties, and perused the material on record. 5.1 The authorisation u/s. 253(2), filed along with memorandum of appeal is already on record which clarifies at para 2 thereof that the appeal, though below the monetary limit u/s. 268A, is being filed under para 10(c) of the Board‟s Instruction No. 03/2018, dated 11/07/2018. The order u/s. 253(2) is a statutory document, forming part of the memorandum of appeal before the Tribunal (Form 36). It signifies the competence to file the appeal under reference and, accordingly, correctly mentions about the eligibility of the Revenue to file the same under law, i.e., sec. 268A read with the extant Board instruction/direction. The Tribunal while passing the impugned order dismissing the Revenue‟s appeal, has clearly failed to take note of the same, forming part of its‟ record. Reference herein may also drawn to sec. 268A(4), which reads as under:- MA No. 11/JAB/2019 (A.Y. 2007-08) Dy CIT vs. M/s. Bhaskar Lubricant P. Ltd. 4 | P a g e “Filing of appeal or application for reference by income-tax authority. 268A(4) The Appellate Tribunal or Court, hearing such appeal or reference, shall have regard to the orders, instructions or directions issued under sub-section (1) and the circumstances under which such appeal or application for reference was filed or not filed in respect of any case.” 5.2 The Tribunal‟s finding as to the Revenue‟s appeal being covered u/s. 268A read with Board Instruction No. 3/2018, of which it was to have regard, without considering the exceptional clause thereof under which the same is stated to be filed, of which it was put to notice, is clearly a mistake apparent from record. As explained in Honda Siel Power Products Ltd. Vs CIT [(2007) 295 ITR 466 (SC), if prejudice has resulted to the party, which prejudice is attributable to the Tribunal’s mistake, error or omission, and which error is a manifest error, then the Tribunal would be justified in rectifying its mistake. 6. For the reasons afore-stated, we, accepting the Revenue‟s instant miscellaneous application, recall its‟ captioned appeal for being heard and a decision on merits. We decide accordingly. 7. In the result, the Revenues‟ captioned MA is allowed. Order Pronounced in open Court on May 06, 2022 Sd/- Sd/- (Sanjay Arora) (Manomohan Das) Accountant Member Judicial Member Dated: 06/05/2022 vr/- MA No. 11/JAB/2019 (A.Y. 2007-08) Dy CIT vs. M/s. Bhaskar Lubricant P. Ltd. 5 | P a g e Copy to: 1. The Applicant - Dy. CIT, Circle-2(1), Jabalpur 2. The Respondent – M/s. Bhaskar Lubricant Pvt. Ltd., 581, South Civil Lines, Jabalpur 3. The Principal CI T-2, Jabalpur (MP) 4. The CI T( A)-1, Jabalpur. 5. The Sr .D.R., ITAT, Jablapur 6. Guard file. By order (VUKKEM RAMBABU) Sr. Private Secretary, ITAT, Jabalpur.