ACIT, Central Circle-2(2), Ahmedabad V. Shri Hanubhai R Sangani, Ahmedabad

MA 220/AHD/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 9699 (ITAT-AHMEDABAD)
• Duration Of Justice: 5 month(s) 29 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 06-01-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2010-2011
• Appeal Filed On: 08-07-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DEELIPKUMAR
• Keywords: Audit objection; Tax effect

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI WASEEM AHMED, ACCOUNTANT MEMBER MA NO.220/AHD/2019 AY 2010-11 ( IN ITA NO.69/AHD/2019 AY 2010-11 ) THE ACIT CENTRAL CIR-2(2) AHMEDABAD / VS. HANUBHAI R.SANGANI A/5, SATYAM BUNGALOW OPP.KARNAVATI CLUB SATELLITE, AHMEDABAD-380015 ./ ./ PAN/GIR NO. AELPS 4790 L ( / APPLICANT ) .. ( / RESPONDENT ) / APPLICANT BY : SHRI DEELIP KUMAR, SR.DR / RESPONDENT BY : SHRI PARIN SHAH, AR / DATE OF HEARING 20/12/2019 !'# / DATE OF PRONOUNCEMENT 06/01/2020 / O R D E R PER WASEEM AHMED, ACCOUNTANT MEMBER: BY THIS MISCELLANEOUS APPLICATION, THE REVENUE HAS REQUESTED FOR RECALLING OF THE COMMON ORDER DATED 29/01/2019 PASS ED BY THE ITAT AHMEDABAD BENCH A IN ITA NO. 69/AHD/2019 FOR AY 2 010-11, DISMISSING APPEAL OF THE DEPARTMENT DUE TO LOW TAX EFFECT. 2. LD. AR SHRI PARIN SHAH, APPEARED FOR THE ASS ESSEE. LD.DR DILEEP KUMAR SR.DR APPEARED FOR THE DEPARTMENT. IT IS PLEA DED IN THE APPLICATION THAT THE REVENUE AUDIT OBJECTION WAS AC CEPTED BY THE DEPARTMENT AND THEREAFTER ASSESSMENT ORDER U/S.143( 3) R.W.S.147 OF THE I.T.ACT, 1961 WAS MADE. FURTHER, THE LD.CIT(A) VID E NO.CIT(A)- MA NO.220/AHD/2019 (IN ITA NO.69/AHD/2019) ACIT VS. HANUBHAI R.SONGANI ASST .YEAR - 2010-11 - 2 - 3/ACIT, CIRCLE 3(3)/17-18 DATED 19/11/2018 HAS REST RICTED THE DISALLOWANCE MADE U/S.14A OF RS. 44,35,176/- TO RS. 4,61,744/-. 3. DISSATISFIED WITH THE ORDER OF THE CIT(A), THE REVENUE CAME UP IN APPEAL BEFORE THE TRIBUNAL. THE TRIBUNAL DISMISSED THE APPEAL OF THE REVENUE VIDE ORDER DATED 03/12/2018. THE TRIBUNAL WAS OF THE VIEW THAT TAX EFFECT INVOLVED IN THIS CASE IS LESS THAN RS.20 LAKHS BECAUSE THE TAX RELIEF GRANTED BY THE CIT(A) IS LESS THAN RS.20 LAK HS AND, THEREFORE, IN VIEW OF THE BOARD INSTRUCTION BEARING NO. 3 OF 2018 DATED 11/07/2018 SUCH APPEAL IS NOT MAINTAINABLE BEFORE THE TRIBUNAL . 4. IT HAS BEEN FURTHER PLEADED THAT INSTRUCTION NO. 3/2018 CONTAINS EXCEPTIONAL CLAUSE AT SL.NO.8 OF THE INSTRUCTION. ACCORDING TO SUB-CLAUSE (C) OF CLAUSE 8 IF A REVENUE AUDIT OBJECTION HAS BE EN ACCEPTED BY THE DEPARTMENT, THEN THE APPEALS OF SUCH ISSUES WOULD B E CONTESTED ON MERIT AND WILL NOT BE WITHDRAWN BY VIRTUE OF THESE INSTRU CTIONS. SINCE IT WAS A CASE, REOPENED ON AUDIT OBJECTION, THEREFORE IT FAL LS WITHIN THE EXCEPTIONAL CLAUSE PROVIDED IN THE INSTRUCTION. 5. HOWEVER, DURING THE COURSE OF HEARING, WE HAVE C ONFRONTED THE LD. DR WITH THE CBDT INSTRUCTION BEARING NO.5/2017 DATE D 23/01/2017. THESE INSTRUCTIONS PROVIDE THAT EVEN IF AN ASSESSME NT IS BEING REOPENED ON ACCOUNT OF AUDIT OBJECTION BUT THE ADDITIONS ARE DELETED BY THE CIT(A) ON MERIT, THEN FOR THE PURPOSE OF CHALLENGING THE O RDER OF CIT(A) IN MA NO.220/AHD/2019 (IN ITA NO.69/AHD/2019) ACIT VS. HANUBHAI R.SONGANI ASST .YEAR - 2010-11 - 3 - FURTHER APPEAL THE CASE WOULD BE REQUIRED TO BE EXA MINED ON MERIT. SIMPLY THE APPEAL WOULD NOT BE FILED BECAUSE THE CA SE FALLS WITHIN THE EXCEPTIONAL CLAUSE OF THE CBDT INSTRUCTION FOR NOT FILING THE APPEAL WHERE THE TAX EFFECT BY VIRTUE OF RELIEF GRANTED BY THE CIT(A) IS LESS THAN THE MONETARY LIMIT FOR FILING SUCH APPEALS. IN OTH ER WORDS, THE DEPARTMENT HAS TO ASSESS THE MERITS OF THE DISPUTE INVOLVED AND THEY WILL NOT FILE FURTHER APPEAL AGAINST THE ORDER OF THE CI T(A) OR ITAT IN A MECHANICAL MANNER. THE RELEVANT PARA-3 OF CIRCU LAR NO.17 READS AS UNDER:- 3. HOWEVER, IT HAS BEEN NOTICED THAT PARA 8(C) OF CI RCULAR NO.21/2015, REGARDING CASES WHERE ADDITION MADE ON ACCOUNT OF REVENUE AUD IT OBJECTION IS DELETED, IS BEING ERRONEOUSLY INTERPRETED AND APPEALS ARE BEING MECHANICALLY FILED BY THE DEPARTMENT WITHOUT PROPER EXAMINATION OF THE CASE O N MERITS. THIS IS CONTRARY TO THE INSTRUCTIONS CONTAINED IN CIRCULAR NO.21/2015 AND C IRCULAR NO.8/2016. IT IS THEREFORE, CLARIFIED THAT THE IMPORT AND INTENT OF PARA 8 OF THE CIRCULAR NO.21/2015 IS THAT EVEN ON ISSUES MENTIONED IN THE SAID PARA, APP EALS AGAINST THE ADVERSE JUDGMENT SHOULD ONLY BE FILED ON MERITS. 5.1. WE HAVE ALSO CONFRONTED WITH THE LD.DR WITH TH E JUDGMENT OF HONBLE BOMBAY HIGH COURT IN THE CASE OF PR.CIT VS. NAWANY CONSTRUCTION CO. (P.) LTD. REPORTED IN 98 TAXMANN.C OM 294 (BOMBAY). 5.2. THE HONBLE BOMBAY HIGH COURT HAS CONSIDERED T HIS CIRCULAR AND OBSERVED THAT MERE RAISING OF THIS AUDIT OBJECTION IS NOT SUFFICIENT FOR RECALL OF THE ORDER. THE RELEVANT PART OF THE DISC USSION OF THE HONBLE BOMBAY HIGH COURT HAS HELD AS UNDER: 8. IT IS CONCEDED THAT WHILE SEEKING TO RESTORE I NCOME TAX APPEAL NO.254 OF 2013 ON THE FILE OF THIS COURT, NEITHER T HE REVENUES CIRCULAR DATED 11-7-2018 IS REFERRED NOR ANY CONDITION THERE IN. IF THE CONDITION MA NO.220/AHD/2019 (IN ITA NO.69/AHD/2019) ACIT VS. HANUBHAI R.SONGANI ASST .YEAR - 2010-11 - 4 - NOW RELIED UPON IS WITH REGARD TO THE REVENUE AUDIT OBJECTION, THEN, MERE RAISING OF THIS OBJECTION IN TERMS OF THIS CIR CULAR 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 A TTEMPT TO GET OVER THE BINDING CIRCULARS AND IN ANY CASE WE SHALL NOT ALLO W THE REVENUE TO GET OVER THEM IN THIS MANNER. THE CIRCULARS CONTINUE T O BIND THE REVENUE AND IF THEY CONTAIN ANY CONDITIONS, WHETHER SUCH CO NDITIONS ARE ATTRACTED OR NOT WOULD HAVE TO BE PROVED AND ESTABL ISHED BY THE REVENUE. ONCE THERE IS NO SUCH RECORD BEFORE US, W E DO NOT COUNTENANCE THE ORAL REQUEST OF MR. PINTO. CONSEQU ENTLY, WE DO NOT SEE ANY REASON TO ENTERTAIN THIS APPEAL. IT IS DISMISS ED. 6 . THE LD.DR WAS UNABLE TO CONTROVERT THE ABOVE POSI TION. 7. ON DUE CONSIDERATION OF ALL THESE FACTS AND CIRC ULAR OF THE BOARD, I.E. CIRCULAR NO.5 OF 2017 IN THE LIGHT OF HONBLE BOMBAY HIGH COURT DECISION, WE ARE OF THE VIEW THAT DEPARTMENT HAS N OT BROUGHT ANY SUBSTANTIAL MATERIAL ON THE RECORD POINTING OUT THA T APPEAL WAS FILED AFTER EVALUATION OF MERIT ON THE ISSUES INVOLVED. IT SOU GHT TO RECALL THE ORDER OF THE TRIBUNAL MERELY ON THE BASIS OF AUDIT OBJECTION , WHICH IS NOT SUFFICIENT FOR RECALLING THE TRIBUNAL ORDER. THERE FORE, WE DO NOT FIND ANY ERROR IN THE ORDER OF THE TRIBUNAL. THUS THE MISCEL LANEOUS APPLICATION IS REJECTED. MA NO.220/AHD/2019 (IN ITA NO.69/AHD/2019) ACIT VS. HANUBHAI R.SONGANI ASST .YEAR - 2010-11 - 5 - 7. IN THE RESULT, MISCELLANEOUS APPLICATION FILED B Y THE REVENUE IS DISMISSED. THIS ORDER PRONOUNCED IN OPEN COURT ON 06/01/2020 SD/- SD/- ( RAJPAL YADAV ) ( WASEEM AHMED ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD; DATED 06/01/2020 &. ., .(. . / T.C. NAIR, SR. PS ! / COPY OF THE ORDER FORWARDED TO : 1. / THE APPLICANT 2. / THE RESPONDENT. 3. ) *+ , / CONCERNED CIT 4. , ( ) / THE CIT(A)-3, AHMEDABAD 5. /01 ((*+ , *+# , ) / DR, ITAT, AHMEDABAD 6. 145 6 / GUARD FILE. / BY ORDER, / ( //TRUE COPY// / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD 1. DATE OF DICTATION 20.12.2019( WORD PROCESSED BY HONBLE AM IN HIS COMPUTER BY DRA GON ) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 23.12.2019 3. OTHER MEMBER 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S 5. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S.6.1.2020 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 6.1.2020 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 10. DATE OF DESPATCH OF THE ORDER