ITO, CHENNAI V. C.Krishnamurthy, CHENNAI

MA 274/CHNY/2019

• Counselvise Citation: [2022] 104 COUNSELVISE.COM (IT) 3365 (ITAT-CHENNAI)
• Duration Of Justice: 2 year(s) 8 month(s) 29 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 01-08-2022
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 28-07-2022
• Assessment Year: 2006-2007
• Appeal Filed On: 03-11-2019
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Audit objection; Bad and doubtful debts; Tax effect

Judgement Text

Miscellaneous Application No.274/Chny/2019 (in ITA No.1166/Chny/2014) िनधा रण वष /Assessment Year: 2006-07 The Income Tax Officer. Non-Corporate Ward-3(4), Chennai-600 034. v. Mr.C.Krishnamurthy, No.74, Nattumuthu Street, Teynampet, Chennai-600 018. [PAN: AAOPK 8159 L] (अपीलाथ /Appellant) ( यथ /Respondent) Department by : Mr.D.Hema Bhupal, JCIT Assessee by : Mr.Raghav Rajeev Menon, Adv. सुनवाई क तारीख/Date of Hearing : 29.07.2022 घोषणा क तारीख /Date of Pronouncement : 02.08.2022 आदेश / O R D E R PER G. MANJUNATHA, ACCOUNTANT MEMBER: The Revenue has filed present Miscellaneous Application against the order of the Tribunal in ITA No.1166/Chny/2014 dated 26.06.2019 and relevant assessment year 2006-07. 2. The Revenue has narrated the facts of its case and mistakes stated to be apparent on record from the order of the Tribunal dated 26.06.2019 and relevant contents of Miscellaneous Application filed by the Revenue for the AY 2006-07 in ITA No.1166/Chny/2014 are reproduced as under: आयकर अपीलीय अिधकरण, ’डी’ यायपीठ, चे ई। IN THE INCOME TAX APPELLATE TRIBUNAL ‘D’ BENCH: CHENNAI ी वी. दुगा राव, माननीय ाियक सद एवं ी जी. मंजूनाथा, माननीय लेखा सद के सम BEFORE SHRI V. DURGA RAO, HON’BLE JUDICIAL MEMBER AND SHRI G. MANJUNATHA, HON’BLE ACCOUNTANT MEMBER MA No.274/Chny/2019 (in ITA No.1166/Chny/2014) :: 2 :: 1. The above appeal was disposed of by the Hon'ble Tribunal by its order dated 26.06.2019. The appellant, in the assessment year mentioned, beg to present this petition for rectification of a defect, which is apparent from record, in the said order. 2. In the assessee's case, for the AY.2006-07, the Hon'ble Tribunal passed its order in ITA No.1166/Mds/2014 on 05.06.2015 on Revenue's appeal. The issue involved in appeal was disallowance of bad debts made by the Assessing Officer to the tune of Rs.12,06,942/- being deleted by the CIT(A). The Tribunal had allowed the Revenue's appeal, disposing the appeal ex-parte, as on the date of hearing on 01.06.2015, none appeared on behalf of the assessee. The appeal was decided on merits, reversing the findings of the ld.CIT(A) 3. Aggrieved, the assessee preferred appeal before the High Court. Before the High Court, the assessee challenged the decision of the Tribunal in allowing the Revenue's appeal (ITA No.1166/Mds/2014) upholding the order of AO in disallowing the bad debts and also decision of the Tribunal in dismissing the Miscellaneous Petition filed by the assessee for recall of its earlier ex-parte order passed by the Tribunal (MA No. 237/Mds/2015 in ITA No.1166/ Mds/2014). 4. Taking up the TCA No. 978 of 2018 which is directed against the order passed in the Miscellaneous application, the Court has observed that considering the facts of the case, the assessee has not been found to be deliberate or wilful, nor the assessee found to be guilty of unnecessarily prolonging the matter before the Tribunal by repeatedly filing affidavit for adjournment. Hence, a liberal approach can be adopted. Accordingly, the court has allowed the appeal in TCA No. 978/2018 and the order passed by the Tribunal in M.A. 237/2015 dated 09.03.2016 has been set aside and consequently the order passed by the Tribunal in ITA No.1166/Mds/2014 dated 05.06.2015 stands recalled and the appeal stands restored to the file of the Tribunal and decided afresh. 5. Against this order of the Hoh'ble High Court, the Hon'ble Tribunal took up the case for hearing. Considering the CBDT circular No. 3/2018 dated 11.07.2018 the Hon'ble Tribunal has dismissed the appeal of revenue on account of low tax effect with liberty to Revenue to move an application for recalling the order if the case falls under any exceptions referred to in the above said CBDT Circular. 6. This case falls under. exception clause No. 10(c) of the CBDT Circular No. exceptional clause vide Para No. 10(c) of CBDT circular No.3/2018 dated 11/07/2018 as the issue has emanated from Revenue Audit Objection which has been accepted by the Department. Hence, it is prayed that the order of the ITAT in ITA No.1166/Mds/2014 dated 05/06/2015 in which the Tribunal had adjudicated the issue in favour of revenue may be recalled and also it is requested that the Hon'ble !TAT pass appropriate order as it may deem fit to do so. 7. The Appellant, therefore, prays that the Hon'b!e Tribunal may be pleased to dispose of the Miscellaneous Petition at the earliest convenience. MA No.274/Chny/2019 (in ITA No.1166/Chny/2014) :: 3 :: 3. We have heard both the sides and considered the relevant contents of the Miscellaneous Application filed by the Revenue against the order of the Tribunal in ITA No.1166/Chny/2014 dated 26.06.2019. We find that the Tribunal has dismissed the appeal filed by the Revenue by referring to CBDT Circular No.3/2018 dated 11.07.2018 and observed that tax effect involved in the present appeal filed by the Revenue is less than the monetary limit fixed for filing the appeal before the Tribunal. The Revenue contended that although the tax effect involved in the present appeal is less than the monetary limit fixed for filing the appeal before the Tribunal, but the assessment has been reopened on the basis of Revenue audit objection and thus, in view of the exception provided in the said Circular, the Revenue needs to pursue the issue on merits, even though, tax effect is less than the monetary limit. In this regard, the Ld.DR has filed copies of Revenue audit objection accepted by the Department. We find that the assessment has been re-opened on the basis of Revenue audit objection and therefore, we are of the considered view that the appeal filed by the Revenue comes under exception as provided in Para No.10(c) of CBDT Circular No.3/2018 dated 11.07.2018 and thus, the appeal needs to be decided on merits irrespective of monetary limit involved in the appeal filed by the Revenue. The Tribunal without considering the above aspect, dismissed the appeal filed by the Revenue on the basis of tax effect and thus, we are of the considered view that the appeal needs to be recalled and hence, the appeal filed by the Revenue in ITA No.1166/Chany/2014 MA No.274/Chny/2019 (in ITA No.1166/Chny/2014) :: 4 :: dated 26.06.2019 is recalled and the registry is directed to list the appeal for hearing in due course. 4. In the result, the Miscellaneous Application filed by the Revenue is allowed. Order pronounced on the 02 nd day of August, 2022, in Chennai. Sd/- ( वी. दुगा राव) (V. DURGA RAO) याियक सद य/JUDICIAL MEMBER Sd/- (जी. मंजूनाथा) (G. MANJUNATHA) लेखा सद य/ACCOUNTANT MEMBER चे ई/Chennai, दनांक/Dated: 02 nd August, 2022. TLN आदेश क ितिलिप अ ेिषत/Copy to: 1. अपीलाथ /Appellant 4. आयकर आयु"/CIT 2. यथ /Respondent 5. िवभागीय ितिनिध/DR 3. आयकर आयु" (अपील)/CIT(A) 6. गाड फाईल/GF