DEPUTY COMMISSIONER OF INCOME TAX 24 ( 3), MUMBAI V. NEXT SERVICES HEALTHCARE SOURCING SOLUTIONS P.LTD, MUMBAI

MA 234/MUM/2017

• Counselvise Citation: [2018] 124 COUNSELVISE.COM (IT) 7088 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 3 month(s) 2 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 10-08-2018
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: E
• Assessment Year: 2011-2012
• Appeal Filed On: 08-05-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: ANUJ KISANADWALA
• Keywords: Tax effect

Judgement Text

1 MA234/MUM/2017 IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH H, MUMBAI BEFORE SHRI JOGINDER SINGH(JUDICIAL MEMBER) AND SHRI G MANJUNATHA (ACCOUNTANT MEMBER) M.A. 234/MUM/2017 (ARISING OUT OF I.T.A NO.214/MUM/2015 (ASSESSMENT YEAR: 2011-12) ITO 13(1)(1), MUMBAI VS M/S NEXT SERVICES HEALTHC ARE SOURCING SOLUTIONS PVT LTD, 604 TO 606, EUREKA TOWERS, B-WING, OFF LINK ROAD, MINDSPACE, MALAD (W), MUMBAI-64 PAN : AACCN0651R APPLICANT RESPONDENT APPLICANT BY SHRI SAURABH KUMAR RAI RESPONDENT BY ANUJ KISANADWALA DATE OF HEARING 06-07-2018 DATE OF PRONOUNCEMENT 13-08-2018 O R D E R PER G MANJUNATHA, AM : THIS MISCELLANEOUS APPLICATION FILED BY THE REVENU E U/S 254(2) OF THE I.T. ACT, 1961 IS DIRECTED AGAINST THE ORDER OF THE ITAT IN ITA NO.214/MUM/2015 ORDER DATED 07-09-2016. 2. THE REVENUE HAS FILED THIS MISCELLANEOUS APPLICA TION, SEEKING TO RECTIFY A MISTAKE STATED TO BE APPARENT ON RECORD T HAT HAS CREPT IN THE ORDER DATED 07-09-2016 BY WHICH ORDER, THE TRIBUNAL HAS DISPOSED OF APPEAL FOR AY 2011-12 ON THE BASIS OF LOW TAX EFFEC T OF RS.10 LAKHS IN 2 MA234/MUM/2017 THE LIGHT OF CIRCULAR ISSUED BY THE CBDT VIDE CIRCU LAR NO.21 OF 2015 DATED 20-12-02015. 3. THE LD.DR REFERRING TO THE ORDER PASSED BY THE I TAT, SUBMITTED THAT THE TAX EFFECT INVOLVED IN THE APPEAL FILED BY THE REVENUE PURSUANT TO ORDER OF LD. CIT(A) IS AT RS.21,28,376, HOWEVER, TH E ITAT HAS WRONGLY APPRISED THE FACTS AND SIMPLY DISMISSED THE APPEAL OF THE DEPARTMENT ON THE BASIS OF LOW TAX EFFECT,THEREFORE, THE ORDER MA Y BE RECALLED 4. THE LD.AR FOR THE ASSESSEE, ON THE OTHER HAND, S TRONGLY SUPPORTING THE ORDER OF THE ITAT SUBMITTED THAT THERE IS NO MI STAKE IN THE ORDER PASSED BY THE ITAT AS THE REAL TAX EFFECT INVOLVED IN THIS APPEAL IS LESS THAN THE MONETARY LIMIT PRESCRIBED FOR FILING APPEA L BEFORE ITAT AS THE DIFFERENCE BETWEEN TAX PAID BY THE ASSESSEE ON BOOK PROFIT IN THE RETURN OF INCOME FILED FOR THE YEAR AND TAX COMPUTED BY TH E AO UNDER NORMAL PROVISIONS OF THE INCOME-TAX IN ASSESSMENT ORDER IS LESS THAN RS.10 LAKHS. THE LD.AR FURTHER SUBMITTED THAT ALTHOUGH N OTIONAL TAX EFFECT INVOLVED IS MORE THAN THE PRESCRIBED LIMIT PROVIDED FOR FILING APPEAL BEFORE THE ITAT, THE MEANING OF TAX EFFECT HAS BEEN CLARIFIED BY ISSUING A CLARIFICATION NO.21 OF 2015 ON 14-07-2017 EXPLAININ G TAX EFFECT, BUT BEFORE ISSUING CLARIFICATION BY THE CBDT, THERE WAS AN AMBIGUITY IN THE MEANING OF TAX EFFECT, ACCORDINGLY, THE ITAT HAS DI SMISSED APPEAL FILED BY THE REVENUE BY TAKING INTO ACCOUNT REAL TAX EFFE CT INVOLVED IN THE 3 MA234/MUM/2017 APPEAL AND HENCE, FILING A MISCELLANEOUS APPLICATIO N ON THE BASIS OF SUBSEQUENT CLARIFICATION ISSUED BY THE BOARD TO CON SIDER NOTIONAL TAX EFFECT INVOLVED IN APPEAL IS INCORRECT. IN THIS RE GARD, HE RELIED UPON THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS CONTINENTAL CONSTRUCTION LTD (2011) 336 ITR 394 (DEL) AND ALSO THE ITAT, MUMBAI DECISION IN THE CASE OF M/S ESSAR STEEL LTD IN ITA NO.3227/MUM/2005. 5. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIAL AVAILABLE ON RECORD. THE ITAT HAS DISMISSED APPEAL FILED BY THE REVENUE BY FOLLOWING BOARDS CIRCULAR NO.21 OF 2015 DATED 10-1 2-2015 AS PER WHICH THE BOARD HAS PRESCRIBED MONETARY LIMIT FOR FILING APPEAL BEFORE ITAT. AS PER THE SAID CIRCULAR, THE BOARD HAS PRESCRIBED TAX EFFECT OF RS.10 LAKHS TO FILE APPEAL BEFORE ITAT. THE ITAT HAS DIS MISSED APPEAL FILED BY THE REVENUE BY CONSIDERING REAL TAX EFFECT INVOLVED IN THE APPEAL ON THE BASIS OF TAX PAID BY THE ASSESSEE ON BOOK PROFIT AN D TAX DETERMINED BY THE AO UNDER NORMAL PROVISIONS OF THE ACT. IF TAX PAID BY THE ASSESSEE ON THE BOOK PROFIT AND TAX DETERMINED BY THE AO UND ER NORMAL PROVISION OF THE ACT IS CONSIDERED, THEN TAX EFFECT INVOLVED IN THE APPEAL OF THE REVENUE IS LESS THAN RS.10 LAKHS. THE REVENUE HAS FILED THIS MISCELLANEOUS APPLICATION ON THE GROUND THAT TAX EF FECT INVOLVED IN THIS APPEAL IS ABOVE THE MONETARY LIMIT PRESCRIBED BY TH E CBDT FOR FILING APPEAL BEFORE THE ITAT. FOR THIS PURPOSE, THE REVE NUE HAS REFERRED TO 4 MA234/MUM/2017 CIRCULAR NO.21 OF 2015, PARA 4 WHERE THE MEANING OF TAX EFFECT HAS BEEN CLEARLY EXPLAINED, AS PER WHICH TAX EFFECT WOULD IN CLUDE NOTIONAL TAX ON DISPUTED ADDITION. THERE IS NO AMBIGUITY IN THE CI RCULAR ISSUED BY THE CBDT IN THE YEAR 2015. THE MEANING OF TAX EFFECT H AS BEEN CLEARLY DEFINED AND EXPLAINED. THE ITAT, WHILE DISMISSING THE APPEAL FILED BY THE REVENUE HAS NOT CONSIDERED THAT THE ISSUE IN TH E LIGHT OF CIRCULAR ISSUED BY THE CBDT AND SPECIFICALLY PARA 4 OF THE S AID CIRCULAR. THEREFORE, WE ARE OF THE CONSIDERED VIEW THAT THE T AX EFFECT INVOLVED IN THIS APPEAL IS MORE THAN THE AMOUNT PRESCRIBED BY T HE BOARD FOR FILING APPEAL BEFORE ITAT AND THE ITAT HAS DISMISSED THE A PPEAL WITHOUT CONSIDERING THE FACTS IN RIGHT PERSPECTIVE. THEREF ORE, THERE IS A MISTAKE APPARENT IN THE ORDER OF THE ITAT WHICH REQUIRES RE CTIFICATION U/S 254(2) OF I.T. ACT, 1961. HENCE, WE RECALL THE ORDER PASS ED BY ITAT IN ITA NO.214/MUM/2015 DATED 07-09-2016. THE REGISTRY IS DIRECTED TO FIX THE APPEAL FOR HEARING IN DUE COURSE. 6. IN THE RESULT, THE MISCELLANEOUS APPLICATION FIL ED BY THE REVENUE IS ALLOWED. 7. ORDER PRONOUNCED IN THE OPEN COURT ON 13 TH AUGUST, 2018. SD/- SD/- (JOGINDER SINGH) (G MANJUNATHA) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DT : AUGUST, 2018 5 MA234/MUM/2017 PK/- COPY TO : 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR /TRUE COPY/ BY ORDER SR.PS, ITAT, MUMBAI