The Income Tax Officer, Srikakulam V. Jaruguilla Vijaya Kumari, Srikakulam

MA 20/VIZ/2018

• Counselvise Citation: [2018] 124 COUNSELVISE.COM (IT) 6969 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 3 month(s) 18 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 25-07-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2011-2012
• Appeal Filed On: 06-04-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K C DAS
• Keywords: Tax effect

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH, VISAKHAPATNAM BEFORE SHRI V. DURGA RAO , HONBLE JUDICIAL MEMBER & SHRI D.S. SUNDER SINGH , HONBLE ACCOUNTANT MEMBER MA NO. 20 / VIZ /201 8 (ARISING OUT OF ITA NO. 34 / VIZ /201 6 ) (ASST. YEAR : 20 11 - 12 ) ITO, WARD - 1, SRIKAKULAM. V S . SMT. JARUGULLA VIJAYA KUMARI, PROP: SRI BHASKARA BEER & WINES, KESAVARAOPETA VILLAGE, ETCHERLA MANDAL, SRIKAKULAM DISTRICT. PAN NO. AOFPJ 4218 L (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI G.V.N. HARI ADV OCATE . DEPARTMENT BY : SHRI K.C. DAS SR. DR DATE OF HEARING : 20 / 0 7 /201 8 . DATE OF PRONOUNCEMENT : 25 / 0 7 /201 8 . O R D E R PER V. DURGA RAO, JUDICIAL MEMBER TH IS MISC. APPLICATION FIL ED BY THE DEPARTMENT ON THE GROUND THAT THE TRIBUNAL HAS ERRED IN DISMISSING THE APPEAL FILED BY THE DEPARTMENT IN ITA NO. 34/VIZ/2016, DATED 25/10/2017. 2. LD. DEPARTMENTAL REPRESENTATIVE STRONGLY SUPPORTED THE MISC. APPLICATION FILED BY THE DEPARTMENT AND SUBMITTED THAT THE TRIBUNAL HAS DISMISSED THE APPEAL ON THE GROUND THAT THE TAX 2 M A NO. 20 /VIZ/2018 ( SMT. JARUGULLA VIJAYA KUMARI ) EFFECT WAS BELOW RS. 10 LAKHS INTERPRETING THE MEANING OF TAX DOES NOT INCLUDE S SURCHARGE AND CESS, BUT SURCHARGE AND CESS REQUIRED TO BE CONSIDERED FOR THE PURPOSE OF TAX , THEREFORE, THERE IS A MISTAKE APPARENT ON RECORD , WHICH NEEDS TO BE RECTIFIED . 3 . LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT THE TRIBUNAL HAS PASSED THE ORDER BY CONSIDERING THE DECISION OF THE COORDINATE BENCH OF TH IS TRIBUNAL IN THE CASE OF DCIT VS. GUDAPATI NAGESWARA RAO IN ITA NO. 40/VIZ/2013, DATED 16/06/2017 WHEREIN THE TR IBUNAL HAS HELD THAT TAX DOES NOT INCLUDE SURCHARGE AND EDUCATION CESS, THEREFORE, THERE IS NO MISTAKE APPARENT ON RECORD . 4 . WE HAVE CONSIDERED THE RIVAL SUBMISSIONS OF BOTH THE PARTIES AND PERUSED THE ORDER PASSED BY THIS TRIBUNAL. 5. WE FIND THAT THE TRIBUNAL BY ORDER DATED 25/10/2017 HAS CONSIDERED THE MEANING OF TAX, WHICH DOES NOT INCLUDE SURCHARGE AND EDUCATION CESS AND ALSO BY FOLLOWING THE DECISION OF THE COORDINATE BENCH OF TH IS TRIBUNAL IN THE CASE OF GUDAPATI NAGESWARA (SUPRA) , HAS DISMISSED THE A PPEAL FILED BY THE DEPARTMENT ON THE GROUND TH AT THE TAX EFFECT IS BELOW RS. 10 LAKHS . FOR THE SAKE OF CONVENIENCE , THE RELEVANT PORTION OF THE ORDER PASSED BY THE ITAT, VISAKHAPATNAM BENCH IN THE CASE OF GUDAPATI NAGESWARA (SUPRA) IS EXTRACTED AS UNDER: - 3 M A NO. 20 /VIZ/2018 ( SMT. JARUGULLA VIJAYA KUMARI ) 5. THE ARGUMENT ADVANCED BY THE LEARNED COUNSEL FOR THE ASSESSEE HAS BEEN CONSIDERED BY THE COORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF DCIT VS. GUDAPATI NAGESWARA RAO IN ITA NO. 40/VIZ/2013, BY ORDER DATED 16/06/2017, WHEREIN THE TRIBUNAL HAS HELD THAT IF THE TAX EFFECT EXCLUDING SURCHARGE , EDUCATION CESS ETC. IS BELOW RS. 10 LAKHS, THE REVENUE IS NOT AUTHORISED TO FILE AN APPEAL AND IF IT IS FILED, THEY SHOULD WITHDRAW THE APPEAL. THE COORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF ITO VS. P. PRASEN KUMAR IN MA NO. 63/HYD/2016 (ARISING O UT OF ITA NO. 418/HYD/2014) BY ORDER DATED 07/12/2016 BY FOLLOWING THE ORDER THE ORDER OF ITAT D BENCH, MUMBAI IN THE CASE OF DCIT VS. DOME BELL ELECTRONICS IN ITA NO. 2480/MUM/2012 BY ORDER DATED 22/07/2016 HAS OBSERVED AS UNDER: - 6. WE HAVE CONSIDERED THE ISSUE. AS FAR AS THE DEFINITION OF TAX IS CONCERNED, THE TAX DOES NOT INCLUDE SURCHARGE AND CESS AS PER THE ABOVE REFERRED CASES. THE COORDINATE BENCH IN THE CASE OF DCIT VS. DOME BELL ELECTRONICS (SUPRA) HAS CONSIDERED THIS ISSUE VIDE PARA 3.2 OF I TS ORDER, WHICH IS AS UNDER: - 3.2 WE HAVE GONE THROUGH THE FACTS OF THIS CASE AND ALSO GONE THROUGH THE AFORESAID CIRCULAR AS WELL AS SUB - SECTION (43) OF SECTION 2 OF THE ACT WHICH DEFINES WORD TAX. IT IS NOTED THAT DOME BELL ELECTRONICS THE IDENTICAL ISSUE CAME UP BEFORE THE HON'BLE CHENNAI BENCH WHEREIN THE HON'BLE BENCH HELD AS UNDER: - WE FIND THAT IN CLAUSE (4) OF INSTRUCTION NO.5 OF 2008 DATED 15 TH MAY, 2008 OF CBDT, TAX EFFECT IS DEFINED AS UNDER: - 4. FOR THIS PURPOSE, TAX EFFECT MEANS THE DIFFERENCE BETWEEN THE TAX ON THE TOTAL INCOME ASSESSED AND THE TAX THAT WOULD HAVE BEEN CHARGEABLE HAD SUCH TOTAL INCOME BEEN REDUCED BY THE AMOUNT OF INCOME IN RESPECT OF THE ISSUE AGAINST WHICH APPEAL IS INTENDED TO BE FILED (HEREAFTER REFERRED TO AS DISPUTED ISSUES). HOWEVER, THE TAX WILL NOT INCLUDE ANY INTEREST THEREON. SIMILARLY, IN LOSS CASES NOTIONAL TAX EFFECT SHOULD NOT BE TAKEN INTO ACCOUNT. IN THE CASE OF PENALTY ORDERS, THE TAX EFFECT WILL MEAN QUANTUM OF PENALTY DELETED OR REDUCED IN TH E 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 SUB - SECTION (43) OF SECTION 2 OF I NCOME TAX ACT, 1961, IT RUNS AS UNDER: - (43) TAX IN RELATION TO THE ASSESSMENT YEAR COMMENCING ON THE 1 ST DAY OF APRIL, 1965, AND ANY SUBSEQUENT ASSESSMENT YEAR MEANS INCOME TAX CHARGEABLE UNDER THE PROVISIONS OF THIS ACT, 4 M A NO. 20 /VIZ/2018 ( SMT. JARUGULLA VIJAYA KUMARI ) AND IN RELATION TO ANY OTHER ASSESSMENT YEAR INCOME - TAX AND SUPER - TAX CHARGEABLE UNDER THE PROVISIONS OF THIS ACT PRIOR TO THE AFORESAID DATE [AND IN RELATION TO THE ASSESSMENT YEAR COMMENCING ON THE 1ST DAY OF APRIL, 2006, AND ANY SUBSEQUENT ASSESSMENT YEAR INCLUDES THE FRINGE BONE F IT TAX PAYABLE 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 RS. 2,90,250/ - WHICH IS BELOW THE LIMIT OF RS. 3 LAKHS PRESC RIBED IN THE CIRCULAR FOR FILING APPEALS BEFORE THIS TRIBUNAL. RESULTANTLY, WE DO NOT FIND ANY MISTAKE IN THE ORDER OF THIS TRIBUNAL MUCH LESS ANY MISTAKE APPARENT ON RECORD. WE HAVE ALSO GONE THROUGH SUB - SECTION (43) OF SECTION 2 WHICH DEFINES 'TAX'. THE PERUSAL OF THE DEFINITION SHOWS THAT WHATEVER WAS INTENDED TO BE INCLUDED IN TAX HAS BEEN MENTIONED THEREIN. WHEN THE LEGISLATURE HAS MENTIONED THE WORDS SUPER - TAX AND FRINGE BENEFIT TAX', THEN, IT COULD HAVE ALSO MENTIONED THE WORDS 'SURCHARGE' AND EDUCATION CESS' AS WELL, IF THERE WAS ANY INTENTION TO INCLUDE THEM IN THE WORD 'TAX'. THUS, WE RESPECTFULLY AGREE WITH THE DECISION TAKEN BY THE CHANNEL BENCH. IN OUR VIEW, SURCHARGE AND EDUCATION CESS SHALL NOT BE INCLUDE IN WORD 'TAX' FOR THE PURPOSE OF EXAMINING OF TAX EFFECT AS ENVISAGED IN CIRCULAR OF BOARD DATED 10TH DECEMBER 2015 NO. 21/2015. THUS, THE TAX EFFECT BEING LESS THAN RS. 10 LAKHS, IMPUGNED APPEAL FILED BY THE REVENUE IS NOT MAINTAINABLE AND THEREFORE SAME IS HEREBY DISMISSED. OUR ORDER HAS NO EFFECT ON THE MERITS OF THIS CASE.' IN VIEW OF THIS AND KEEPING IN MIND THE PRINCIPLES LAID DOWN BY THE HON'BLE DELHI HIGH COURT IN THE CASE OF DALMIA CEMENT (BHARAT) LTD., WE ARE OF THE OPINION THAT SURCHARGE AND EDUCATION CESS SHOULD NOT BE INCLU DED WHILE CALCULATING THE TAX EFFECT. SINCE THE TAX THEREON IS RS. 9 LAKHS, WHICH IS LESS THAN RS. 10 LAKHS, WE ARE OF THE OPINION THAT THERE IS NO MERIT IN THE MA FILED BY THE REVENUE. 6. RESPECTFULLY FOLLOWING THE DECISIONS OF THE COORDINATE BENCH OF T HE TRIBUNAL IN THE CASE OF GUDAPATI NAGESWARA RAO (SUPRA) AND P. PRASEN KUMAR (SUPRA), THIS APPEAL FILED BY THE REVENUE IS DISMISSED. 6 . IN VIEW OF THE ABOVE, W E FIND THAT THERE IS NO MISTAKE APPARENT ON RECORD TO REVIEW THE APPEAL FILED BY THE DEPARTMENT. 5 M A NO. 20 /VIZ/2018 ( SMT. JARUGULLA VIJAYA KUMARI ) 7 . IN THE RESULT, MISC. APPLICATION FILED BY THE DEPARTMENT IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON TH IS 25 TH DAY OF JULY , 201 8 . SD/ - SD/ - ( D.S. SUNDER SINGH ) ( V. DURGA RAO ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 25 TH JULY , 201 8 . VR/ - COPY TO: 1. THE ASSESSEE - SMT. JARUGULLA VIJAYA KUMARI, PROP: SRI BHASKARA BEER & WINES, KESAVARAOPETA VILLAGE, ETCHERLA MANDAL, SRIKAKULAM DISTRICT. 2. THE REVENUE ITO, WARD - 1, SRIKAKULAM. 3. THE PCIT - 2, VISAKHAPATNAM . 4. THE CIT(A) - 2, GUNTUR. 5. THE D.R ., VISAKHAPATNAM. 6. GUARD FILE. BY ORDER (VUKKEM RAMBABU) SR. PRIVATE SECRETARY, ITAT, VISAKHAPATNAM.