Income Tax Officer- 6(3), Lucknow V. Shri Priyanshu Rasgogi, Lucknow

MA 17/LKW/2020

• Counselvise Citation: [2022] 104 COUNSELVISE.COM (IT) 3671 (ITAT-LUCKNOW)
• Duration Of Justice: 2 year(s) 5 month(s) 5 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 03-07-2022
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2016-2017
• Appeal Filed On: 28-01-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Audit objection; Tax effect; Tax effect
• Section: 54F; 54EC

Judgement Text

M.A. No.17/Lkw/2020 1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH ‘B’, LUCKNOW BEFORE SHRI A. D. JAIN, VICE PRESIDENT AND SHRI T. S. KAPOOR, ACCOUNTANT MEMBER M.A. No.17/Lkw/2020 (Arising out of I.T.A. No.217/Lkw/2019) Assessment Year:2016-17 Income Tax Officer-6(3), Lucknow. Vs. Shri Priyanshu Rastogi, 310/6A, Gol Darwaza Street, Chowk, Lucknow. PAN:AGNPR9366F (Appellant) (Respondent) O R D E R PER T. S. KAPOOR, A.M. This Misc. Application has been filed by the Revenue against the order of the Tribunal dated 22/08/2019 passed in I.T.A. No.217/Lkw/2019. 2. In this Misc. Application, the Revenue has contended that the appeal, filed by the Revenue, was dismissed by the Tribunal due to low tax effect which was not liable to be dismissed as such as the Revenue had raised a question of law as the learned CIT(A) had allowed the appeal of the assessee by extending the scope of Circular No. 791 dated 02/06/2000. Learned D. R. submitted that the assessee had claimed exemption u/s 54F of the Act, which the Assessing Officer had denied and which learned CIT(A) had wrongly allowed by extending scope of Circular No. 791 to section 54F Appellant by Shri H. P. Singh, Advocate Respondent by Shri Pankaj Sachan, D.R. Date of hearing 03/06/2022 Date of pronouncement 04/07/2022 M.A. No.17/Lkw/2020 2 of the Act and in this respect our attention was invited to Circular No. 791 and it was highlighted that the Circular related to Section 54EA, 54EB & 54EC and nowhere in the circular there is mention of section 54F of the Act. Inviting our attention to the Circular No. 3 of 2018, dated 11/07/2018, Learned D. R. submitted that vide para 10, the CBDT had laid down that even if the tax effect was less than the monetary limit, the appeal has to be filed on merits. It was submitted that vide circular No. 8 of 2018 dated 20/08/2018, this fact has been highlighted and therefore, it was prayed that the order of the Tribunal, dismissing the appeal of the Revenue, due to low tax effect, be recalled and appeal be heard on merits. 3. Learned counsel for the assessee, on the other hand, submitted that in para 10, the CBDT had laid down that the appeal be contested on merits where the constitutional validity of an Act or Rule is under challenge or where Board’s order and Notification has been held to be illegal or ultra vires or where Revenue’s audit objection in the case has been accepted by the Department or where addition relates to undisclosed income from foreign assets / foreign bank account. It was submitted that none of exceptions are applicable to the assessee and therefore, the Tribunal had rightly dismissed the appeal of the Revenue for low tax effect. 4. We have heard the rival parties and have gone through the material placed on record. We find that the assessee had claimed exemption u/s 54F of the Act and the Assessing Officer had denied the same as the assessee had not fulfilled the condition of purchasing the residential flat within two years from the date of transfer as laid down u/s 54F of the Act. The learned CIT(A) however, allowed the appeal of the assessee primarily relying on the CBDT Circular No. 791 dated 02/06/2000. The said circular, as reproduced by learned CIT(A) in his order, mentions section 54EA, 54EB and 54EC only. However, the learned CIT(A) held that the deduction u/s 54EC and 54F are M.A. No.17/Lkw/2020 3 similar therefore, he held that said circular No. 791 was applicable to section 54F also. Against the said order, the Revenue had filed appeal before the Tribunal, the tax effect of which was admittedly less than the monetary limit as required for filing the appeal before the Tribunal. The Tribunal dismissed the appeal of the Revenue for low tax effect vide order dated 22/08/2019. The Revenue filed the Misc. Application for recalling the order of the Tribunal relying on para 10 of CBDT Circular No. 2 of 2018 dated 11/07/2018. For the sake of completeness, para 10 of the circular is reproduced below: "10. Adverse Judgments 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) Where the Constitutional validity of the provisions of an Act or Rule is under challenge, or (b) Where Board's order, Notification, Instruction or Circular has been held to be illegal or ultra vires, or (c) Where Revenue Audit objection in the case has been accepted by the Department, or (d) Where addition relates to undisclosed foreign income/undisclosed foreign assets (including financial assets)/ undisclosed foreign bank account. (e) Where addition is based on information received from external sources in the nature of law enforcement agencies such as CBI/ ED/ DRI/ SFIO/ Directorate General of GST Intelligence (DGGI). (f) Cases where prosecution has been filed by the Department and is pending in the Court." 4.1 The above para clearly states that notwithstanding the monetary limits, the Revenue has to file the appeal on merits where any of the four reasons exist. The Learned D. R. could not point out as to in which exception the case of the assessee fell. Learned D. R. did not demonstrate that the Constitutional validity of the provisions has been challenged neither it has been shown that the Board's order/Notification has been held to be M.A. No.17/Lkw/2020 4 illegal or ultra vires nor there has been any evidence for acceptance of Revenue’s audit objection in the case of the assessee and neither this is a case of undisclosed foreign income or undisclosed foreign bank account. Therefore, in view of the above, there is no merit in the Misc. Application filed by the Revenue. Accordingly, the Misc. Application filed by the Revenue is dismissed. 5. In the result, the Misc. Application of the Revenue is dismissed. (Order pronounced in the open court on 04/07/2022) Sd/. Sd/. ( A. D. JAIN ) ( T. S. KAPOOR ) Vice President Accountant Member Dated:04/07/2022 *Singh Copy of the order forwarded to : 1. The Appellant 2. The Respondent. 3. Concerned CIT 4. The CIT(A) 5. D.R., I.T.A.T., Lucknow