ACIT, C-5(1), Chandigarh V. Shri Parminder Singh, Chandigarh

MA 29/CHANDI/2020

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 0581 (ITAT-CHANDIGARH)
• Duration Of Justice: 11 month(s) 21 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 10-02-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2012-2013
• Appeal Filed On: 20-02-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ASHOK KHANNA CIT
• Assessee Lawyers: B K NOHRIA
• Keywords: Revision of order; Audit objection; Tax effect
• Section: 143(3); 263

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BE NCH B, CHANDIGARH .., ! '# .. , $ %& BEFORE: SHRI. N.K.SAINI, VP & SHRI , R.L. NEGI, JM MISCELLANEOUS APPLICATION NO. 29/CHD/2020 ( ITA NO. 309/CHD/2019) ASSESSMENT YEAR : 2012-13 ACIT, C - 5(1) CIRCLE 5(1) CHANDIGARH SHRI PARMINDER SINGH BHULLAR AUTO MOBILES, PETROL PUMP, SECTOR-41,CHANDIGARH PAN NO: AJOPS8844H APPELLANT RESPONDENT !' ASSESSEE BY : SHRI B.K. NOHRIA #!' REVENUE BY : SHRI ASHOK KHANNA, ADDL. CIT $ %! & DATE OF HEARING : 10/02/2021 '()*! & DATE OF PRONOUNCEMENT : 10/02/2021 %'/ ORDER PER N.K. SAINI, VICE PRESIDENT THIS MISCELLANEOUS APPLICATION DT. 14/18.02.2020 HA S BEEN FILED BY THE DEPARTMENT AGAINST THE ORDER DT. 02/09/2019 IN ITA NO. 309/CHD/2019 AND C.O. NO. 20/CHD/2019 FOR THE A.Y. 2012-13 BY STATING THE REIN AS UNDER: SUB:- FILING OF MISCELLANEOUS APPLICATION IN ITA NO . 309/CHD/2019 AND CO. NO. 20/CHD/2019 (IN ITA NO. 309/CHD/2019) DATED 02.09.1 9 IN THE CARE OF SH. PARMINDER SINGH, BHULLAR AUTO MOBILES, SECTOR 41, C HANDIGARH, PAN AJOPS8844H FOR THE A.Y. 2012-13 - KINDLY REFER TO YOUR ORDER PASSED IN ITA NO. 309/CH D/2019 DATED 02.09.2019 ON THE SUBJECT CITED ABOVE. 2. IN THIS REGARD, IT IS SUBMITTED THAT THE BRIEF F ACTS OF THE CASE ARE THAT ASSESSMENT IN THIS CASE WAS COMPLETED U/S 143(3) OF THE INCOME TAX ACT, 1961 AT AN INCOME OF RS.23,91,610/- BY MAKING DISALLOWANCE OF 1/5 TH OF TRAVELLING EXPENSES. THE THEN PR. CIT-2, CHANDIGARH PASSED ORD ER U/S 263 ON 01.03.2017. SUBSEQUENTLY, ORDER U/S 143(3) R.W.S. 263 WAS PASS ED AT AN INCOME OF RS. 2 27,89,856/- BY MAKING ADDITION ON ACCOUNT OF DISALL OWANCE OF BUSINESS PROMOTION EXPENSES UNDER THE HEAD 'LANGER EXPENSES' AND DISAL LOWANCE OF TRAVELLING EXPENSES. 3. THE ASSESSEE FILED APPEAL AGAINST THE ORDER U/S 263 DATED 01.03.2017 BEFORE THE HON'BLE ITAT, WHO VIDE ORDER DATED 20.11 .2018 IN ITA NO. 525/CHD/2017, ALLOWED THE APPEAL OF THE ASSESSEE BY QUASHING THE ORDER PASSED U/S 263. THE REVENUE PREFERRED AN APPEAL BEFORE THE HON'BLE PUNJAB & HARYANA HIGH COURT ON 11.04.2019 AGAINST THE ORDER OF THE H ON'BLE ITAT, WHICH IS PENDING AS ON DATE. 4. IN THE APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER U/S 143(3) R.W.S. 263 OF THE ACT ON THE ISSUE OF 'DISALLOWANCE OF LANGAR EXPENSE S', THE CIT(A) IN APPEAL NO. 10197/2/17-18 VIDE ORDER DATED 18.12.2018, FOLLOWIN G THE ORDER OF HON'BLE ITAT IN ITA NO 525/CHD/2017 DATED 20.11.2018 VIDE WHICH THE REVISIONARY ORDER OF PR.CIT- 2, CHANDIGARH WAS QUASHED, ALLOWED THE APPEAL OF TH E ASSESSEE BY HOLDING AS UNDER:- 'SINCE THE ORDER OF THE PR. CIT-2, CHANDIGARH ON TH E BASIS OF WHICH THE ADDITIONS U/S 143(3) R.W.S. 263 TO THE TUNE OF RS. 3,98,246/- HAS BEEN MADE, HAS BEEN DELETED BY THE HON'BLE ITAT BENCH, CHANDIGARH, THE ADDITIONS MADE IN THE SUBSEQUENT ORDER OF THE AO ALSO DO NOT SURVIVE. THIS GROUND OF APPEAL IS ALLOWED.' 5. IN FURTHER APPEAL FILED BY THE REVENUE, THE HON'BLE ITAT VIDE ORDER DATED 02.09.2019 IN ITA NO. 309/CHD/2019 DISMISSED THE AP PEAL OF THE REVENUE ON ACCOUNT OF LOW TAX EFFECT AS PER CBDT CIRCULAR NO. 17/2019 DATED 08.08.2019. 6. IT IS SUBMITTED THAT THE TAX EFFECT INVOLVED IN THI S CASE IS RS. 2,27,970/-, WHICH IS BELOW THE MONETARY LIMITS PRESCRIBED BY TH E CBDT IN ITS CIRCULAR NO. 17 OF 2019 DATED 08.08.2019 R.W. CIRCULAR NO.03/2018 DATE D 11.07.2018 FOR FILING OF APPEAL BEFORE THE HON'BLE ITAT. HOWEVER, THE CASE F ALLS IN THE EXCEPTION UNDER PARA 10(C) OF CBDT CIRCULAR NO.03/2018 R.W CIRCULAR NO. 17/2019. 7. THE HON'BLE ITAT HAS DISMISSED THE APPEAL FILED BY THE DEPARTMENT PRIMARILY BY OBSERVING THAT THE TAX EFFECT INVOLVED IN THIS CASE IS BELOW THE REVISED MONETARY LIMIT AS PRESCRIBED IN CBDT CIRCULAR NO. 1 7/2019. HOWEVER, THE PRESENT CASE IS COVERED BY THE EXCEPTION 10(C) OF THE CBDT CIRCULAR NO. 3/2018. THUS THERE IS AN APPARENT MISTAKE IN THE ORDER OF THE HO N'BLE ITAT TO THIS EFFECT. 8. THEREFORE, IT IS HUMBLY SUBMITTED THAT SINCE THIS C ASE FALLS UNDER EXCEPTION 10(C) OF THE CIRCULAR NO. 3 OF 2018 ISSUED BY CBDT, THEREFORE, THE SAME NEEDS TO BE DECIDED ON MERITS INSTEAD OF DISMISSING ON ACCOU NT OF LOW TAX EFFECT. 9. KEEPING IN VIEW OF THE ABOVE FACTS SINCE THIS CASE IS FALLING UNDER EXCEPTION PARA 10(C) TO THE CBDT'S CIRCULAR NO. 3/2 018 DATED 11.07.2018, THE HON'BLE ITAT IS REQUESTED TO KINDLY CONSIDER THIS L ETTER AS AN M.A. TO THE ITA NO. 309/CHD/2019 DATED 02.09.2019 FOR DECIDING THE ISSU E ON MERITS OF THE CASE. 3 2. DURING THE COURSE OF HEARING, THE LD. DR REITERA TED THE CONTENTS OF THE AFORESAID APPLICATION AND FURTHER SUBMITTED THAT TH E MONETARY LIMIT FOR NOT FILING THE APPEALS DUE TO TAX EFFECT WAS NOT APPLICABLE AS THE ISSUE COMES UNDER THE EXCEPTION IN CLAUSE 10(C) OF THE CIRCULAR NO. 17/20 19 ISSUED BY THE DEPARTMENT. 3. IN HIS RIVAL SUBMISSIONS, THE LD. COUNSEL FOR TH E ASSESSEE SUBMITTED THAT THERE IS NO MISTAKE APPARENT FROM THE RECORD IN ORD ER DATED 02/09/2019 PASSED BY THE ITAT IN ITA NO. 309/CHD/2019 AND C.O. NO. 20 /CHD/2019 THAT THE TAX EFFECT INVOLVED IN THE DEPARTMENTAL APPEAL WAS LESS THAN THE MONETARY LIMIT OF RS. 50 LACS, AS SUCH, THE DEPARTMENT OUGHT NOT TO H AVE FILED THE APPEAL BEFORE THE ITAT AS PER THE INSTRUCTIONS GIVEN VIDE CIRCULA R NO. 3/2018 DATED 11.7.2018 BY THE CBDT. IT WAS FURTHER SUBMITTED THAT THE ISSUE RAISED BY THE DEPARTMENT IN ITS APPEAL DOES NOT COME IN THE EXCEPTION LAID DOWN IN CLAUSE 10(B) OF THE AMENDED CIRCULAR NO. 17/2019 DATED 8.8.2019AS WELL AS THE LETTER OF THE CBDT DATED 11.12.2018. RELIANCE WAS PLACED ON THE DECISI ON DATED 9.8.2019 OF THE ITAT A BENCH CHANDIGARH IN M.A.NO. 76/CHD/2019 A ND OTHERS IN THE CASES OF ACIT- 4(1), CHANDIGARH VS M/S DIAMOND PLASTIC PRODU CTS, CHANDIGARH AND OTHERS. 4. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE P ARTIES AND HAVE CAREFULLY GONE THE MATERIAL AVAILABLE ON THE RECORD . IT IS NOTICED THAT THE ISSUE AGITATED BY THE DEPARTMENT IN ITS APPEAL NO. ITA NO . 309/CHD/2019 AND C.O. NO. 20/CHD/2019 FOR THE ASSESSMENT YEAR 2012-13 REL ATES TO THE DELETION OF DISALLOWANCE AMOUNTING TO RS. 27,89,856/- MADE BY T HE ASSESSING OFFICER U/S 143(3) OF THE INCOME TAX ACT, THEREFORE, THE TAX EF FECT ON THE SAID ISSUE WAS LESS THAN THE PRESCRIBED LIMIT AS MENTIONED IN CIRCULAR NO.3 OF 2018 DATED 11.7.2018 ISSUED BY THE CBDT. ACCORDINGLY THE APPEAL OF THE D EPARTMENT WAS DISMISSED VIDE ORDER DATED 21.8.2019. NOW THE DEPARTMENT IN T HE MISC. APPLICATION SUBMITTED THAT THE ISSUE WAS COVERED IN THE EXCEPTI ON LAID DOWN VIDE CLAUSE 10 OF THE CIRCULAR NO.3 OF 2018. THE CONTENTS IN THE S AID CLAUSE READS AS UNDER:- 4 10.ADVERSE JUDGMENTS RELATING TO THE FOLLOWING ISS UES 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 PROVISI ONS OF AN ACT OR RULE IS UNDER CHALLENGE, OR (B)WHERE BOARD'S ORDER, NOTIFICATION, INSTRUCTION O R CIRCULAR HAS BEEN HELD TO BE ILLEGAL OR ULTRA VIRES, OR (C)WHERE REVENUE AUDIT OBJECTION IN THE CASE HAS BE EN ACCEPTED BY THE DEPARTMENT, OR (D)WHERE THE ADDITION RELATES TO UNDISCLOSED FOREIG N ASSETS/ BANK ACCOUNTS. 5. FROM THE AFORESAID CONTENTS OF CLAUSE 10 OF CIRC ULAR NO. 3/2018 DATED 11.7.2018, IT IS CRYSTAL-CLEAR THAT THE ISSUE UNDER CONSIDERATION WHICH WAS INVOLVED IN ITA NO. 309/CHD/2019 AND C.O. NO. 20/CHD/2019 IN ASSESSEES CASE, DOES NOT COME IN THE AFORESAID EXCEPTION. IT IS ALSO NOTICED THAT AFTER ISSUING THE AFORESAID CIRCULAR DATED 11.7.2018, THE CBDT AGAIN ISSUED CLA RIFICATION VIDE LETTER DATED 11.10.2018 STATING THEREIN AS UNDER:- 2. IN PARA 10 OF THE SAID CIRCULAR READ WITH BOARD 'S LETTER ISSUED VIDE F.NO. 279/MISC.142/2007-ITJ(PT) DATED 20.08.2018, IT HAS BEEN UNAMBIGUOUSLY AND EXPRESSLY PROVIDED THAT ADVERSE JUDGMENTS RELATING TO THE FOLLOWING ISSUES SHOULD BE CONTESTED ON MERITS NOTWITHSTANDING THAT THE TAX EFFECT ENTAILED IS LES S THAN THE MONETARY LIMITS SPECIFIED IN PARA 3 ABOVE OR TH ERE IS NO TAX EFFECT: (A) WHERE THE CONSTITUTIONAL VALIDITY OF THE PROVIS IONS 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 B EEN ACCEPTED BY THE DEPARTMENT, OR (D)WHERE ADDITION RELATES TO UNDISCLOSED FOREIGN IN COME/UNDISCLOSED FOREIGN ASSETS (INCLUDING FINANCIAL ASSETS)/ UNDISCLOSED FOREIGN B ANK ACCOUNT. (E)WHERE ADDITION IS BASED ON INFORMATION RECEIVED FROM EXTERNAL SOURCES IN THE NATURE OF LAW ENFORCEMENT AGENCIES SUCH AS CBI/ED/D RI/SFIO/DIRECTORATE GENERAL OF GST INTELLIGENCE (DGGI). 5 (F) CASES WHERE PROSECUTION HAS BEEN FILED BY THE DEPAR TMENT AND IS PENDING IN THE COURT.' 3. THE DIRECTION THAT APPEALS BE 'CONTESTED ON MERI TS' IN ITSELF IMPLIES THAT THERE SHOULD NOT BE ANY MECHANICAL FILING OF APPEALS IN THESE CA SES. IT IS THEREFORE REITERATED THAT THE IMPORT AND INTENT OF PARA 10 OF CIRCULAR 3 OF 2 018 IS THAT EVEN ON ISSUES MENTIONED IN THE SAID PARA, APPEALS AGAINST THE ADVERSE JUDGE MENTS SHOULD ONLY BE FILED ON MERITS. 6. FROM THE AFORESAID CLARIFICATION ALSO, IT IS CLEAR THAT THE CBDT CLARIFIED VIDE AFORESAID LETTER DATED 11.10.2018 THAT EVEN ON THE ISSUES MENTIONED IN PARA 10 OF CIRCULAR NO.3 OF 2018, THE APPEALS AGAINST THE A DVERSE JUDGEMENT SHOULD ONLY BE FILED ON MERIT BUT IN THE PRESENT CASE NOTHING I S BROUGHT ON RECORD TO SUBSTANTIATE THAT THERE WAS ANY ADVERSE JUDGMENT ON ANY OF THE ISSUES AS MENTIONED IN THE CBDT CIRCULAR. WE, THEREFORE, DO NOT SEE ANY MERIT IN THIS MISC. APPLICATION MOVED BY THE DEPARTMENT. ACCORDINGLY, THE SAME IS DISMISSED. ORDER PRONOUNCED IN THE COURT ON 10/02/2021. SD/- SD/- .. .., (R.L. NEGI ) ( N.K. SAIN I) $ %&/ JUDICIAL MEMBER ! / VICE PRESIDENT AG DATE: 10/02/2021 (+! ,-.- COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. $ / CIT 4. $ / 01 THE CIT(A) 5. -2 45&456789 DR, ITAT, CHANDIGARH 6. 8:% GUARD FILE