ACIT, Trichy V. Shri R.Viswanathan, Trichy

MA 155/CHNY/2011

• Counselvise Citation: [2011] 123 COUNSELVISE.COM (IT) 6818 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 5 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 23-09-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 23-09-2011
• Assessment Year: 2004-2005
• Appeal Filed On: 18-07-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Tax effect

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI BEFORE SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBER AND SHRI GEORGE MATHAN, JUDICIAL MEMBER .. M.P. NO. 155/MDS/2011 (IN I.T.A. NO. 30/MDS/2011) ASSESSMENT YEAR : 2004-05 THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-II, O/O THE JOINT COMMISSIONER OF INCOME TAX, RANGE-II, TIRUCHIRAPALLI. (PETITIONER) V. SHRI R. VISWANATHAN, 35, TANJORE ROAD, TIRUCHIRAPALLI 620 008. PAN : AAEPV8545M (RESPONDENT) PETITIONER BY : SHRI SANJAY DESHMUKH, SR. D.R. RESPONDENT BY : NONE DATE OF HEARING : 23.09.2011 DATE OF PRONOUNCEMENT: 23.09.2011 O R D E R PER ABRAHAM P. GEORGE, ACCOUNTANT MEMBER : THROUGH THIS MISCELLANEOUS PETITION FILED BY THE R EVENUE, ITS GRIEVANCE IS THAT THE TAX EFFECT ON THE DISPUTES IN VOLVED WAS MORE THAN ` 3 LAKHS AND THIS TRIBUNAL HAD APPLIED CIRCULAR NO. 5 OF 2008 M.P. NO. 155/MDS/11 2 DATED 15.5.2008 OF CBDT TO THE CASE WHILE DISMISSIN G THE APPEAL FILED BY IT. 2. WE HAVE GONE THROUGH THE ORDER AND HEARD THE RIV AL CONTENTIONS. TOTAL OF THE ADDITIONS WHICH WERE DEL ETED BY LD. CIT(APPEALS) IN THIS CASE WAS ` 9,67,500/-. THIS TRIBUNAL BASED ON A FINDING THAT THE TAX EFFECT WAS LESS THAN ` 3 LAKHS, APPLYING CIRCULAR NO.5 OF 2008 DATED 15.5.2008, HAD DISMISSED THE APP EAL OF THE REVENUE. NOW, AS PER LEARNED D.R., THE TAX EFFECT OF ` 9,67,500/- WOULD BE ` 3,19,277/-. ACCORDING TO HIM, THIS AMOUNT WAS ARR IVED AT BASED ON 30% TAX SLAB AGGREGATED WITH SURCHARGE OF 10% VIZ., ` 2,90,250/- AND ` 29,025/- RESPECTIVELY. 3. WE FIND THAT IN CLAUSE (4) OF INSTRUCTION NO.5 O F 2008 DATED 15 TH MAY, 2008 OF CBDT, TAX EFFECT IS DEFINED AS UNDER:- 4. FOR THIS PURPOSE, TAX EFFECT MEANS THE DIFFERE NCE BETWEEN THE TAX ON THE TOTAL INCOME ASSESSED AND TH E TAX THAT WOULD HAVE BEEN CHARGEABLE HAD SUCH TOTAL INCOME BE EN REDUCED BY THE AMOUNT OF INCOME IN RESPECT OF THE ISSUE AGAI NST WHICH APPEAL IS INTENDED TO BE FILED (HEREAFTER REFERRED TO AS DISPUTED ISSUES). HOWEVER, THE TAX WILL NOT INCLUDE ANY INT EREST THEREON. SIMILARLY, IN LOSS CASES NOTIONAL TAX EFFECT SHOULD BE TAKEN INTO ACCOUNT. IN THE CASE OF PENALTY ORDERS, THE TAX EFFE CT WILL MEAN M.P. NO. 155/MDS/11 3 QUANTUM OF PENALTY DELETED OR REDUCED IN THE ORDER TO BE APPEALED AGAINST. NOTHING HAS BEEN MENTIONED IN THE ABOVE DEFINITION TO SHOW THAT TAX WILL INCLUDE SURCHARGE FOR THE PURPOSE OF APPLYING THE SAID CIRCULAR. NOW IF WE LOOK AT THE DEFINITION OF TAX AS PER SU B-SECTION (43) OF SECTION 2 OF INCOME-TAX ACT, 1961, IT RUNS AS UNDER :- (43) TAX IN RELATION TO THE ASSESSMENT YEAR COMMEN CING ON THE 1 ST DAY OF APRIL, 1965, AND ANY SUBSEQUENT ASSESSMENT YEA R MEANS INCOME-TAX CHARGEABLE UNDER THE PROVISIONS OF THIS ACT, AND IN RELATION TO ANY OTHER ASSESSMENT YEAR INCOME-TAX AND SUPER-TAX CHARGEABLE UNDER THE PROVISIONS OF THIS ACT PRIOR T O THE AFORESAID DATE [AND IN RELATION TO THE ASSESSMENT YE AR COMMENCING ON THE 1 ST DAY OF APRIL, 2006, AND ANY SUBSEQUENT ASSESSMENT YEAR INCLUDES THE FRINGE BENEFIT TAX PAYAB LE UNDER SECTION 115WA] IT IS CLEAR THAT TAX, AS PER THE ABOVE DEFINITION, WOULD INCLUDE SUPER- TAX AND ALSO FRINGE BENEFIT TAX BUT NOT SURCHARGE. ADMITTEDLY, HERE, THE TAX WAS ONLY ` 2,90,250/- WHICH IS BELOW THE LIMIT OF ` 3 LAKHS PRESCRIBED IN THE CIRCULAR FOR FILING APPEALS BEFOR E THIS TRIBUNAL. RESULTANTLY, WE DO NOT FIND ANY MISTAKE IN THE ORDE R OF THIS TRIBUNAL MUCH LESS ANY MISTAKE APPARENT ON RECORD. M.P. NO. 155/MDS/11 4 4. IN THE RESULT, THE MISCELLANEOUS PETITION FILED BY THE REVENUE STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT AFTER CONCLUSION OF HEARING ON THE TWENTY THIRD DAY OF SEPTEMBER, 2011. SD/- SD/- (GEORGE MATHAN) (ABRAHAM P. GEORGE) JUDICIAL MEMBER ACCOUNTANT MEMBER CHENNAI, DATED THE 23 RD SEPTEMBER, 2011. KRI. COPY TO: (1) PETITIONER (2) RESPONDENT (3) CIT(A) (4) CIT (5) D.R. (6) GUARD FILE