The ITO, Ward-1(3)(3), Surat V. Shri Mangaldas Narayanbhai Patel, Surat

MA 134/AHD/2017

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 2452 (ITAT-SURAT)
• Duration Of Justice: 3 year(s) 7 month(s) 3 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 01-12-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2004-2005
• Appeal Filed On: 28-04-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RECALLING OF
• Keywords: Audit objection; Tax effect
• Section: 254(2)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, SURAT BENCH, SURAT BEFORE SHRI PAWAN SINGH, JUDICIAL MEMBER AND DR. ARJUN LAL SAINI, ACCOUNTANT MEMBER MA NO. 134/AHD/2017 [ARISING OUT OF ITA NO. 2134/AHD/2013 FOR AY.2004-05] ( VIRTUAL HEARING) ITO, WARD-3(1) SURAT. VS VS SH. MANGALDAS NARAYANDASS PATEL, A/501, PINK CITY APARTMENT, NEAR WATER TANK, BEHIND, KHARWAR NAGAR, SURAT- PAN : AKXPP 1538 M APPELLANT RESPONDEDNT REVENUE BY MISS ANUPMA SINGHLA SR. DR ASSESSEE BY NONE DATE OF HEARING 27.11.2020 DATE OF PRONOUNCEMENT 01/12/2020 ORDER UNDER SECTION 254(2) OF INCOME TAX ACT PER PAWAN SINGH, JUDICIAL MEMBER : 1. THIS MISCELLANEOUS APPLICATION (MA) IS FILED BY THE REVENUE FOR RECALLING OF THE ORDER DATED 04.04.2016. IN THE APPLICATION, THE APPLICANT/REVENUE AS CONTENDED THAT THIS APPEAL WAS DISMISSED BY TRIBUNAL VIDE ORDER DATED 04.04.2016 ON ACCOUNT OF TAX EFFECT OF LESS THAN RS.10.00 LAKHS, BEING LOWER THAN THE MONETARY TAX LIMIT PRESCRIBED IN CBDTS CIRCULAR NO. 21 OF 2015. THE REVENUE FURTHER STATED THAT CASE OF ASSESSEE WAS REOPENED ON THE BASIS OF AUDIT OBJECTIONS AND THAT PRESENT APPEAL IS MA NO. 134/SRT/2017 IN ITA 2134/AHD/2013 MANGALDAS NARAYANDASS PATEL , (AY 2004-05) 2 COVERED BY EXCEPTION CLAUSE (C) IN PARA 8 OF CBDT INSTRUCTION NO. 5/2014 DATED 10.07.2014. 2. THE LD. DEPARTMENTAL REPRESENTATIVE (DR) FOR THE REVENUE MADE HER SUBMISSION ON SIMILAR LINES. THE LD. DR SUBMITS THAT PRESENT APPEAL WAS CLEARLY COVERED BY PARA 8 (C) OF CBDTS CIRCULAR NO. 5 OF 2014 AND WAS NOT LIABLE TO BE DISMISSED DUE TO LOW TAX EFFECT. THE LD. DR FOR THE REVENUE FURTHER SUBMITS THAT EXCEPTION CONTAINED IN CIRCULAR NO.5/2014 WAS RETREATED IN AMENDED CBDT CIRCULAR DATED 20.08.2018, CLARIFYING CIRCULAR NO. 3 OF 2018. THE LD. DR FOR THE REVENUE ALSO FILED HER WRITTEN SUBMISSION ON RECORD AND THE COPIES OF THE CBDT CIRCULAR DATED 21.02.2015 AND 20.08.2018. IT WAS SUBMITTED BEFORE US THAT THE AUDIT OBJECTION WAS ACCEPTED BY THE REVENUE AND THE APPEAL FILED BY THE REVENUE SHOULD HAVE BEEN ADJUDICATED ON MERIT. THE LD. SR DR PRAYED FOR RECALLING THE ORDER DATED 24.07.2017. 3. NONE APPEARED ON BEHALF OF THE ASSESSEE DESPITE THE SERVICE OF NOTICE OF THIS MA. 4. WE HAVE CONSIDERED THE SUBMISSIONS OF LD. SR DR FOR THE REVENUE AND PERUSED THE ORDERS OF THE LOWER AUTHORITIES. THE TRIBUNAL DISMISSED THE APPEAL OF THE REVENUE VIDE ORDER DATED 04.04.2016 DUE TO LOW TAX EFFECT IN VIEW OF CBDT CIRCULAR NO. 21 OF 2015 DATED 10.12.2015. NOW, THE REVENUE HAS COME WITH THE PLEA THAT THE ORDER IS LIABLE TO BE RE-CALLED AS THE INTEREST OF REVENUE IS PROTECTED BY CLAUSE (C) OF PARA-8 OF CBDT MA NO. 134/SRT/2017 IN ITA 2134/AHD/2013 MANGALDAS NARAYANDASS PATEL , (AY 2004-05) 3 CIRCULAR 5/2014 DATED 10.07.2014. WE MAY NOTE THAT CBDT IN ITS CIRCULAR NO. 5 OF 2017 DATED 23.01.2017, HAVE CLARIFIED ABOUT PARA 8 C OF CIRCULAR NO. 5 OF 2014 AND CLARIFIED THAT PARA 8 (C) OF THE SAID CIRCULAR IS BEING ERRONEOUSLY INTERPRETED AND APPEALS ARE BEING FILED MECHANICALLY BY THE DEPARTMENT WITHOUT PROPER EXAMINATION OF THE CASE ON MERIT AND CLARIFIED THAT ERROR AND CONTENT OF PARA 8 (C) OF CIRCULAR NO. 21 OF 2015 IS THAT EVEN ON ISSUES MENTIONED IN THE SAID PARA, APPEALS AGAINST THE ADVERSE JUDGMENT SHOULD ONLY BE FILED ON MERITS. IN PARA 4 OF THE SAID CIRCULAR, IT WAS DIRECTED THAT IF APPEAL MAY HAVE BEEN FILED IN VIOLATION OF THIS INSTRUCTION, MAY BE WITHDRAWN. WE HAVE FURTHER NOTED THAT COORDINATE BENCH OF AHMEDABAD TRIBUNAL IN DCIT VS MALAY JAYENDRABHAI PATEL MA 363/AHD/2019 IN ITA NO.324/AHD/2019, AY- 2011-12 DATED 20.01.2020, WHILE CONSIDERING SIMILAR CONTENTION OF THE REVENUE ON SIMILAR MA FOR RECALLING OF THE ORDER OF TRIBUNAL ON THE GROUND THAT CASE IS COVERED BY THE EXCEPTION CLAUSE IN PARA 8( C) OF CBDT CIRCULAR DATED 10.12.2015. THE CO-ORDINATE BENCH AFTER RELYING ON THE DECISION OF HONBLE BOMBAY HIGH COURT IN PCIT VS NAWANY CONSTRUCTION CO P LTD (2018) 98 TAXMANN.COM 294 (BOMBAY), PASSED FOLLOWING ORDER; 5. THE HONBLE BOMBAY HIGH COURT HAS CONSIDERED THIS CIRCULAR AND OBSERVED THAT MERE RAISING AN AUDIT OBJECTION IS NOT SUFFICIENT FOR RECALL MA NO. 134/SRT/2017 IN ITA 2134/AHD/2013 MANGALDAS NARAYANDASS PATEL , (AY 2004-05) 4 OF THE ORDER. THE RELEVANT PART OF THE DISCUSSION OF THE HONBLE BOMBAY HIGH COURT HAS HELD AS UNDER: 8. IT IS CONCEDED THAT WHILE SEEKING TO RESTORE INCOME TAX APPEAL NO.254 OF 2013 ON THE FILE OF THIS COURT, NEITHER THE REVENUES CIRCULAR DATED 11-7-2018 IS REFERRED NOR ANY CONDITION THEREIN. IF THE CONDITION 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 ATTEMPT TO GET OVER THE BINDING CIRCULARS AND IN ANY CASE WE SHALL NOT ALLOW THE REVENUE TO GET OVER THEM IN THIS MANNER. THE CIRCULARS CONTINUE TO BIND THE REVENUE AND IF THEY CONTAIN ANY CONDITIONS, WHETHER SUCH CONDITIONS ARE ATTRACTED OR NOT WOULD HAVE TO BE PROVED AND ESTABLISHED BY THE REVENUE. ONCE THERE IS NO SUCH RECORD BEFORE US, WE DO NOT COUNTENANCE THE ORAL REQUEST OF MR. PINTO. CONSEQUENTLY, WE DO NOT SEE ANY REASON TO ENTERTAIN THIS APPEAL. IT IS DISMISSED. 6. THE LD. DR WAS UNABLE TO CONTROVERT THE ABOVE POSITION. 7. ON DUE CONSIDERATION OF ALL THESE FACTS, CIRCULARS OF THE BOARD, AS ALSO IN THE LIGHT OF HONBLE BOMBAY HIGH COURT DECISION ALL CITED (SUPRA), WE ARE OF THE VIEW THAT DEPARTMENT HAS NOT BROUGHT ANY SUBSTANTIAL MATERIAL ON THE RECORD POINTING OUT THAT APPEAL WAS FILED AFTER MA NO.363/AHD/2019 4 EVALUATION OF MERIT ON THE ISSUES INVOLVED. IT SOUGHT TO RECALL ORDER OF THE TRIBUNAL MERELY 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 MISCELLANEOUS APPLICATION IS REJECTED. MA NO. 134/SRT/2017 IN ITA 2134/AHD/2013 MANGALDAS NARAYANDASS PATEL , (AY 2004-05) 5 5. THE LD. CIT(A) DR FOR THE REVENUE AT THE TIME OF HEARING COULD NOT BRING ANY MATERIAL TO OUR NOTICE TO DEMONSTRATE THAT THE APPEAL WAS FILED AFTER EVALUATION OF CASE ON MERIT ON THE ISSUES INVOLVED IN THE APPEAL. CONSIDERING THE AFORESAID FACTUAL AND LEGAL DISCUSSION, AND RESPECTFULLY FOLLOWING THE SAME, WE DO NOT FIND ANY MERIT IN THE MA FILED BY THE REVENUE. NO CONTRARY DECISION IS BROUGHT TO OUR NOTICE. HENCE, THE MISCELLANEOUS APPLICATION FILED BY THE REVENUE IS DISMISSED. 6. IN THE RESULT, THE MA OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 01/12/2020. SD/- SD/- (DR. ARJUN LAL SAINI) (PAWAN SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER SURAT, DATED: 01/12/2020 COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR /TRUE CO/// TRUE BY ORDER / / TRUE COPY / / ASSISTANT REGISTRAR, SR. PS/ PS ITAT, SURAT