The ACIT, Circle-3(3), Surat V. M/s. Pankaj Diamonds, Surat

MA 33/SRT/2020

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 9374 (ITAT-SURAT)
• Duration Of Justice: 7 month(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 01-01-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2007-2008
• Appeal Filed On: 01-06-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RECALLING OF
• Keywords: Audit objection; Tax effect
• Section: 254(2)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, SURAT BENCH, SURAT BEFORE SHRI PAWAN SINGH, JUDICIAL MEMBER AND DR. ARJUN LAL SAINI, ACCOUNTANT MEMBER MA NO. 33/SRT/2020 [ARISING OUT OF ITA NO. 2514/AHD/2014 FOR AY.2007-08] ( VIRTUAL HEARING) ACIT CIRCLE-3(3), ROOM NO.414, AAYAKAR BHAWAN, MAJURA GATE, SURAT. VS M/S. PANKAJ DIAMOND, 4-7, KRISHNA DIAMOND PARK, NR. GEB, KAPODARA, VARACHHA ROAD, SURAT. PAN : AADFP 5145 L APPELLANT RESPONDEDNT REVENUE BY MISS ANUPMA SINGHLA SR. DR ASSESSEE BY SHRI TUSHAR P HEMANI, SENIOR ADVOCATE WITH SHRI PARMAR SINGH B PARMAR, ADVOCATE. DATE OF HEARING 01.01.2021 DATE OF PRONOUNCEMENT 01.01.2021 ORDER UNDER SECTION 254(2) OF INCOME TAX ACT PER DR. ARJUN LAL SAINI, ACCOUNTANT MEMBER : 1. THIS MISCELLANEOUS APPLICATION (MA) IS FILED BY THE REVENUE FOR RECALLING OF THE ORDER DATED 03.10.2019. IN THE APPLICATION, THE APPLICANT/REVENUE HAS CONTENDED THAT THIS APPEAL WAS DISMISSED BY TRIBUNAL VIDE ORDER DATED 03.10.2019 ON ACCOUNT OF TAX EFFECT OF LESS THAN RS.50.00 LAKHS, BEING LOWER THAN THE MONETARY TAX LIMIT PRESCRIBED IN CBDTS CIRCULAR NO.17 OF 2019 DATED 08.08.2019. THE REVENUE FURTHER STATED THAT MA NO. 33/SRT/2020 PANKAJ DIAMOND 2 PRESENT APPEAL IS COVERED BY EXCEPTION (C) OF PARA-10C OF CBDT CIRCULAR NO.03 OF 2018 DATED 20.08.2018 AS THE ASSESSMENT WAS REOPENED ON THE BASIS OF AUDIT OBJECTION. 2. THE LD. DEPARTMENTAL REPRESENTATIVE (DR) FOR THE REVENUE MADE HIS SUBMISSION ON SIMILAR LINES AS STATED IN MA. THE LD. DR FOR REVENUE SUBMITS THAT PRESENT APPEAL WAS CLEARLY COVERED BY PARA 10 (C) OF CBDTS CIRCULAR NO. 3 OF 2018 AND WAS NOT LIABLE TO BE DISMISSED DUE TO LOW TAX EFFECT. THE AUDIT OBJECTION WAS ACCEPTED BY THE REVENUE AND THE APPEAL FILED BY THE REVENUE SHOULD HAVE BEEN ADJUDICATED ON MERIT. THE LD. SR DR FOR REVENUE PRAYED FOR RECALLING THE ORDER DATED 03.10.2019. 3. ON THE OTHER HAND, THE LD. AUTHORIZED REPRESENTATIVE (AR) OF THE ASSESSEE SUBMITS THAT THERE IS NO MISTAKE IN THE ORDER PASSED BY THE TRIBUNAL WHICH REQUIRE RECTIFICATION AND THAT THE APPLICATION FILED BY THE REVENUE IS LIABLE TO BE REJECTED. THE LD. AR FOR THE ASSESSEE FURTHER SUBMITS THAT AT THE TIME OF HEARING NO SUCH PLEA AS RAISED IN THIS APPLICATION WAS RAISED BY DR THAT THE CASE IS COVERED BY EXCEPTION CLAUSE OF CBDT CIRCULAR NO. 03/2018. THE LD AR FOR THE ASSESSEE FURTHER SUBMITS THAT CBDT HAS ISSUED CIRCULAR 5/2017 DATED 23.01.2017, WITH REGARD TO THE CASES WHERE THE ADDITIONS MADE ON ACCOUNT OF AUDIT OBJECTION IS DELETED, BEING ERRONEOUSLY INTERPRETED AND APPEAL ARE BEING FILED MECHANICALLY BY THE DEPARTMENT WITHOUT PROPER EXAMINATION CASES MA NO. 33/SRT/2020 PANKAJ DIAMOND 3 ON MERIT. IT WAS CLARIFIED IN THE SAID CIRCULAR THAT APPEAL AGAINST THE ADVERSE JUDGMENT SHOULD ONLY BE FILED ON MERIT. THUS, THE CONTENTION RAISED IN THE APPLICATION IS MECHANICAL AND THERE IS NO MERIT IN THE APPLICATION FILED BY THE REVENUE. IN SUPPORT OF HER SUBMISSIONS THE LD AR FOR THE ASSESSEE RELIED ON THE CBDT CIRCULAR NO. 5/2017 DATED 23.01.2017, DECISION OF MUMBAI TRIBUNAL IN MA NO. 95/2017 IN CASE OF ITO VS. M/S. CANBARA CONSTRUCTION PVT LTD. THE LD AR FOR THE ASSESSEE ALSO PLACED ON RECORD HER WRITTEN SUBMISSIONS DATED 11.11.2020. 4. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD ACCORDINGLY. THE TRIBUNAL VIDE ORDER DATED 03.10.2019 DUE TO LOW TAX EFFECT IN VIEW OF CBDT CIRCULAR NO. 17 OF 2019. THE CBDT IN ITS CIRCULAR NO.31 OF 2015 DATED 10.12.2015, WHILE REVISING THE MONETARY LIMIT OF TAX EFFECT OF RS.5 LACS TO RS.10 LACS FOR FILING APPEAL BEFORE TRIBUNAL, CREATED AN EXCEPTION CLAUSE IN PARA 8 C OF THE CIRCULAR THAT IN CASE AUDIT OBJECTION IS ACCEPTED BY THE DEPARTMENT, THE ISSUES SHOULD BE CONTESTED ON MERIT REGARDLESS TO TAX EFFECT. WE MAY NOTE THAT CBDT IN ITS CIRCULAR NO. 5 OF 2017 DATED 23.01.2017, HAVE CLARIFIED ABOUT CLAUSE-C IN PARA 8 C OF CIRCULAR NO. 5 OF 2014 (WHICH WAS FURTHER AMENDED IN CIRCULAR NO.21 OF 2015 DATED 10.10.2015) BEING ERRONEOUSLY AND CLARIFIED THAT PARA 8 (C) OF THE SAID CIRCULAR IS BEING ERRONEOUSLY INTERPRETED AND APPEALS ARE BEING FILED MECHANICALLY BY THE MA NO. 33/SRT/2020 PANKAJ DIAMOND 4 DEPARTMENT WITHOUT PROPER EXAMINATION OF THE CASE ON MERIT AND CLARIFIED THAT ERROR AND CONTENT OF PARA 8 (C) OF CIRCULAR NO. 21 OF 2015 IS THAT EVEN ON ISSUES MENTIONED IN THE SAID PARA, APPEALS AGAINST THE ADVERSE JUDGMENT SHOULD ONLY BE FILED ON MERITS. IN PARA 4 OF THE SAID CIRCULAR, IT WAS DIRECTED THAT IF APPEAL HAVE BEEN FILED IN VIOLATION OF THIS INSTRUCTION, MAY BE WITHDRAWN. 5. WE HAVE FURTHER NOTED THAT COORDINATE BENCH OF AHMEDABAD TRIBUNAL IN DCIT VS MALAY JAYENDRABHAI PATEL MA NO. 363/AHD/2019 IN ITA NO.324/AHD/2019, DATED 20.01.2020, WHILE CONSIDERING SIMILAR CONTENTION OF THE REVENUE ON SIMILAR MA FOR RECALLING OF THE ORDER OF TRIBUNAL ON THE GROUND OF EXCEPTION CLAUSE IN PARA 8( C) OF CBDT CIRCULAR DATED 10.12.2015, CBDT CIRCULAR NO 5 OF 2017 DATED 23.01.2017 AND RELYING ON THE DECISION OF HONBLE BOMBAY HIGH COURT IN PCIT VS NAWANY CONSTRUCTION CO P LTD (2018) 98 TAXMANN.COM 294 (BOMBAY), PASSED FOLLOWING ORDER; 5. THE HONBLE BOMBAY HIGH COURT HAS CONSIDERED THIS CIRCULAR AND OBSERVED THAT MERE RAISING AN AUDIT OBJECTION IS NOT SUFFICIENT FOR RECALL OF THE ORDER. THE RELEVANT PART OF THE DISCUSSION OF THE HONBLE BOMBAY HIGH COURT HAS HELD AS UNDER: 8. IT IS CONCEDED THAT WHILE SEEKING TO RESTORE INCOME TAX APPEAL NO.254 OF 2013 ON THE FILE OF THIS COURT, NEITHER THE REVENUES CIRCULAR DATED 11-7-2018 IS REFERRED NOR ANY CONDITION THEREIN. IF THE CONDITION NOW RELIED UPON IS WITH REGARD TO THE REVENUE AUDIT MA NO. 33/SRT/2020 PANKAJ DIAMOND 5 OBJECTION, THEN, MERE RAISING OF THIS OBJECTION IN TERMS OF THIS CIRCULAR 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 ATTEMPT TO GET OVER THE BINDING CIRCULARS AND IN ANY CASE WE SHALL NOT ALLOW THE REVENUE TO GET OVER THEM IN THIS MANNER. THE CIRCULARS CONTINUE TO BIND THE REVENUE AND IF THEY CONTAIN ANY CONDITIONS, WHETHER SUCH CONDITIONS ARE ATTRACTED OR NOT WOULD HAVE TO BE PROVED AND ESTABLISHED BY THE REVENUE. ONCE THERE IS NO SUCH RECORD BEFORE US, WE DO NOT COUNTENANCE THE ORAL REQUEST OF MR. PINTO. CONSEQUENTLY, WE DO NOT SEE ANY REASON TO ENTERTAIN THIS APPEAL. IT IS DISMISSED. 6. THE LD.DR WAS UNABLE TO CONTROVERT THE ABOVE POSITION. 7. ON DUE CONSIDERATION OF ALL THESE FACTS, CIRCULARS OF THE BOARD, AS ALSO IN THE LIGHT OF HONBLE BOMBAY HIGH COURT DECISION ALL CITED (SUPRA), WE ARE OF THE VIEW THAT DEPARTMENT HAS NOT BROUGHT ANY SUBSTANTIAL MATERIAL ON THE RECORD POINTING OUT THAT APPEAL WAS FILED AFTER MA NO.363/AHD/2019 FOR EVALUATION OF MERIT ON THE ISSUES INVOLVED. IT SOUGHT TO RECALL ORDER OF THE TRIBUNAL MERELY ON THE BASIS OF AUDIT OBJECTION, WHICH IS NOT SUFFICIENT FOR RECALLING THE TRIBUNAL ORDER. THEREFORE, WE DO NOT FIND ANY ERROR IN THE ORDER OF THE TRIBUNAL AND THE MISCELLANEOUS APPLICATION IS REJECTED. 6. THE LD. CIT(A) DR FOR THE REVENUE AT THE TIME OF HEARING COULD NOT BRING ANY MATERIAL TO OUR NOTICE TO DEMONSTRATE THAT THE APPEAL WAS FILED AFTER EVALUATION OF CASE ON MERIT ON THE ISSUES INVOLVED IN THE APPEAL. CONSIDERING THE AFORESAID FACTUAL AND LEGAL DISCUSSION, AND RESPECTFULLY MA NO. 33/SRT/2020 PANKAJ DIAMOND 6 FOLLOWING THE SAME, WE DO NOT FIND ANY MERIT IN THE MA FILED BY THE REVENUE. NO CONTRARY DECISION IS BROUGHT TO OUR NOTICE. HENCE, THE MISCELLANEOUS APPLICATION FILED BY THE REVENUE IS DISMISSED. 7. IN THE RESULT, THE MA OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED ON 01/01/2021 BY PLACING RESULT ON NOTICE BOARD. SD/- SD/- (PAWAN SINGH) (DR. A L SAINI) JUDICIAL MEMBER ACCOUNTNAT MEMBER SURAT, DATED: 01/01/2021 SAMANTA, PS COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR /TRUE CO/// TRUE BY ORDER // TRUE COPY // ASSISTANT REGISTRAR, SR. PS/ PS ITAT, SURAT