Deputy Commissioner Of Income Tax Circle 2(1) , Jabalpur V. Shri Rakesh Jaishwal , Jabalpur

MA 15/JAB/2019

• Counselvise Citation: [2022] 104 COUNSELVISE.COM (IT) 3989 (ITAT-JABALPUR)
• Duration Of Justice: 2 year(s) 5 month(s) 24 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 09-06-2022
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2008-2009
• Appeal Filed On: 15-12-2019
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: SANJAY SETH
• Keywords: Opportunity of being heard; Audit objection; Tax effect
• Section: 268A

Judgement Text

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. 15/JAB/2019 (arising out of I.T.A. No. 35/JAB/2018) (Asst. Year: 2008-09) Assessee by : Shri Sanjay Seth, FCA. Department by : Shri S.K. Halder, Sr. DR Date of hearing : 14/03/2022 Date of pronouncement : 10/06/2022 O R D E R Per Sanjay Arora, AM: This is a Miscellaneous Application (MA) by the Revenue directed against the Order under section 254(1) of the Income Tax Act, 1961 (‘the Act’ hereinafter) by the Tribunal, dated 23/8/2019, dismissing it’s captioned appeal for Assessment Year (AY) 2008-091 in limine, i.e., as not maintainable u/s. 268A of the Act. 2. The Revenue’s case is that its’ appeal under reference has been wrongly dismissed, as the same is covered by the exception specified at para 10(c) of the Board Instruction 03/2018, dated 11/07/2018. Toward the same, a copy of the audit objection stands placed by it on record. Section 268A, inserted on the Dy. CIT, Circle-2(1), Jabalpur. vs. Rakesh Jaiswal, Bungalow No.6, Civil Lines, Jabalpur. (Applicant) [PAN: AEFPJ 7779 E] (Respondent) MA No. 15/JAB/2019 (AY: 2008-09) Dy. CIT vs. Shri Rakesh Jaiswal 2 statute book by Finance Act 2008 w.e.f. 01/4/1999, empowers the Central Board of Direct Taxes (CBDT/Board) to issue circulars, instructions, orders, directions, etc. from time to time fixing monetary limits for the purpose of regulating the filing of appeals and applications for references by the Revenue before the higher forums, being the Appellate Tribunal, Hon'ble High Court, and the Hon'ble Supreme Court (sec. 268A(1)), and which are to, while considering those appeals, references, etc., have regard to those Circulars/Instructions, etc. (s. 268A(4)). Instruction 03/2018 is one such Instruction issued u/s. 268A(1), and applicable to appeals pending disposal (as on 11/07/2018) as well. Paras 10 & 11 thereof provide exceptions to the said general prescription, so that an appeal/reference, otherwise covered, would be excepted in case it falls under any of the situations specified/contemplated therein. Para 10(c) thereof reads as under: ‘10. Adverse judgment relating to the following issues should be contested on merits notwithstanding that the tax effect entailed is less than the monetary limits specified in para 3 above, or there is no tax effect: (a) ................................, or (b) ................................, or (c) where a Revenue Audit objection in the case has been accepted by the Department, or (d).................................’ This was followed by Instruction 17/2019, dated 08/08/2019, enhancing the monetary limits specified in the former, being from Rs. 20 lacs to Rs.50 lacs for appeals before the Tribunal. Both the Instructions, to be read together, were accordingly applicable at the relevant time. 3. Before us, while the Revenue relied on the decision by the Tribunal in Anurag Srivastava & Ors. (MA Nos. 03-07/Jab/2020, dated 07/9/2020/copy on record), Sh. Seth, the ld. counsel for the assessee, would submit that there is nothing on record (i.e., at the time of hearing of the Revenue’s instant appeal) to exhibit that it was indeed so, i.e., of it being excepted u/s. 268A(1) r/w s. 268A(4) MA No. 15/JAB/2019 (AY: 2008-09) Dy. CIT vs. Shri Rakesh Jaiswal 3 by the Board Instruction (supra), so that there is no mistake apparent from record in the impugned order, which therefore does not require any rectification. 4. We have heard the parties, and perused the material on record. 4.1 The matter stands examined by the Tribunal at length in Asst. CIT v. Anurag Srivastava & Ors. (supra), relied upon by the Revenue, examining the issue from various angles. The said order is in fact in respect of the impugned order (IO), passed as a common order for a large number of appeals and cross objections (COs), and therefore covers the instant MA, i.e., in principle, as well. It stands explained therein that the said order is an order en masse, passed without affording any, much less proper, opportunity to the Revenue, whose appeals stand dismissed thereby. To be heard, a basic ingredient of a judicial order, as indeed, as specifically stated therein, of an order u/s. 254(1), stood thus grossly violated. And it was for this reason that the impugned order specifically provided liberty to the Revenue to move the Tribunal in case it’s appeal was not covered by the Board Instruction 03/2018 read with 17/2019, or otherwise excepted thereunder. The relevant part of the order reads as under: ‘7. It may be clarified that though every care has been taken by the Registry of the Tribunal in identifying the listed appeals, it may yet be that some error in working the tax effect may have occurred. It may also be that an appeal/s is otherwise saved by the exceptions listed at para 10 (scope of which stands widened vide amendment dated 20/8/2018) or para 11 of the Circular. Similarly, it may be that a CO/s bears an independent ground/s, raised for adjudication. Accordingly, liberty is hereby granted to the parties to, where so, move the Tribunal in this regard, in which case it shall, where satisfied on merits, recall an appeal/s or, as the case may be, a CO/s, for being heard on merits. Further, the recall of an appeal would be accompanied by the recall of the assessee’s corresponding CO, if any, dismissed along with. Needless to add, the Tribunal shall, while doing so, which shall be per a speaking order, grant an opportunity of hearing to the other side.’ (emphasis, ours) Opportunity of hearing being a prerequisite of an order u/s. 254(1); nay, a judicial order, it is this liberty, it stands explained therein, that saves the IO from being disqualified as one. A similar liberty, it noted, was in fact also provided vide the Order by its’ Ahmedabad Bench in ITO v. Dinesh Madhavlal Patel & Ors. dated MA No. 15/JAB/2019 (AY: 2008-09) Dy. CIT vs. Shri Rakesh Jaiswal 4 14/8/2019 dismissing 628 appeals by the Revenue and connected COs by the assessees, which was followed and noted by it in the IO. Why, and for that reason, there is even no finding therein by the Tribunal, or even in the IO, that the Revenue’s appeal/s is covered u/s. 268A read with the extant Board Circular. How, one wonders, then, the various decisions by the Honb’le Courts cited by the assessee-respondents in such cases, though fairly not in the instant case, would apply? It was therefore incumbent on the Tribunal to, and it, in entertaining the instant MA by the Revenue, is only honouring the liberty granted by it for breach of the principle of audit alterm partem. 4.3 On merits, the Revenue, on being afforded an opportunity to do so by the Tribunal, has placed on record a copy of the audit objection dated 24/10/2011. It is thus evident that the appeal under reference was preferred by it conscious of the monetary limitation, due to it being excepted under the relevant Instruction itself, i.e., under clause (Cl. 10 (c)) of Board Instruction 03/2018 (supra). We have also verified the subject matter of the issue under appeal to find it as the same as that raised in the said audit objection. These aspects have not been though contested by the assessee. Further, we observe the tax-effect of the instant appeal, filed on 12/3/2018, to be, though below Rs. 50 lacs, in excess of Rs. 10 lacs, the extant monetary limit as on 12/3/2018. This, then, explains the non-communication by the Revenue of the fact of it being excepted under the relevant Board Instruction at the time of it’s filing, i.e., as part of the appeal papers; being not impacted by s. 268A(1). That is, the apparent disqualification u/s. 268A(1) is attracted only subsequent to filing the appeal. This, besides answering Sh.Seth’s objection (para 3), also emphasizes once again the vital need for opportunity of being heard. 5. In view of the foregoing, we have no hesitation in, accepting its’ instant petition, recalling the Revenue’s relevant appeal for being heard on and a MA No. 15/JAB/2019 (AY: 2008-09) Dy. CIT vs. Shri Rakesh Jaiswal 5 decision on merits by the Tribunal after hearing the parties. The Registry is directed to fix the captioned appeal in due course. We decide accordingly. 6. In the result, the Revenues’ captioned MA is allowed. Order pronounced in open court on June 10, 2022 Sd/- Sd/- (Manomohan Das) (Sanjay Arora) Judicial Member Accountant Member Dated: 10/06/2022 vr/- Copy to: 1. The Assessee: Shri Rakesh Jaiswal, Bungalow No.6, Civil Lines, Jabalpur 2. The Revenue: Dy. CIT, Circle-2(1), Jabalpur. 3. The Principal CI T-2, Jabalpur (MP) 4. The CI T (Appeals)-1, Jabalpur. 5. The Sr . D.R., Jaba lpur. 6. Guard File. By order (VUKKEM RAMBABU) Sr. Private Secretary, ITAT, Jabalpur.