DCIT, Circle-4(2), Ahmedabad V. Malay Jayendrabhai Dalal, Ahmedabad

MA 363/AHD/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 8596 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 month(s) 23 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 20-01-2020
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2011-2012
• Appeal Filed On: 27-11-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: L P JAIN
• Keywords: Audit objection; Tax effect

Judgement Text

, - IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD - BENCH A BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI WASEEM AHMED, ACCOUNTANT MEMBER MISC. APPLICATION NO.363/AHD/2019 IN ./ ITA NO.324/AHD/2019 / ASSTT. YEAR: 2011-2012 DCIT, CIR.4(2) AHMEDABAD. VS. SHRI MALAY JAYENDRABHAI DALAL A-12, AAMARKADAMB BUNGALOWS RAMDEVNAGAR CROSS ROAD SATELLITE, AHMEDABAD. / (APPELLANT) / (RESPONDENT) REVENUE BY : SHRI L.P. JAIN, SR.DR ASSESSEE BY : SHRI BHARAT SHAH, AR ! / DATE OF HEARING : 17/01/2020 '#$ ! / DATE OF PRONOUNCEMENT: 20/01/2020 %& / O R D E R PER RAJPAL YADAV, JUDICIAL MEMBER: PRESENT MISC. APPLICATION IS FILED BY REVENUE SEEKI NG RECALL OF ORDER OF THE TRIBUNAL PASSED IN ITA NO.324/AHD/2019 DATED 26.7.2019, VIDE WHICH THE TRIBUNAL SUMMARILY DISMISSED APPEAL OF THE DEPARTMENT INCLUDED IN THE GROUP OF CASES DUE TO TAX EFFECT. 2. REVENUE IN THE MA INTERALIA PLEADED THAT THE ABOVE APPEAL OF THE REVENUE WAS DISMISSED DUE TO LOW TAX EFFECT, HOWEVE R, CASE OF THE MA NO.363/AHD/2019 2 REVENUE FALLS UNDER EXCEPTION CLAUSE VIDE PARA-10(C ) OF THE CBDT CIRCULAR NO.03/2018 DATED 11.7.2018. IT IS SUBMITTE D BY THE LD.DR THAT THE DEPARTMENT IS ENTITLED TO CONTEST ITS APPEAL ON MERIT WHERE AUDIT OBJECTION HAS BEEN ACCEPTED BY THE DEPARTMENT NOTWI THSTANDING THAT TAX EFFECT ENTAILED IS LESS THAN THE MONETARY LIMIT S SPECIFIED IN THE ABOVE CBDT CIRCULAR. THIS ASPECT HAS NOT BEEN CONS IDERED BY THE TRIBUNAL, WHICH IS A MISTAKE APPARENT FROM THE RECO RD, AND THEREFORE, IMPUGNED ORDER REQUIRES TO BE RECALLED AND APPEAL O F THE DEPARTMENT MAY BE LISTED FOR HEARING AFRESH ON MERIT. 3. HOWEVER, DURING THE COURSE OF HEARING, WE HAVE C ONFRONTED THE LD.DR WITH THE CBDT INSTRUCTION BEARING NO.5/2017 D ATED 23/01/2017. THIS INSTRUCTION PROVIDES THAT EVEN IF AN ASSESSMEN T IS BEING REOPENED ON ACCOUNT OF AUDIT OBJECTION BUT THE ADDITIONS ARE DELETED BY THE CIT(A) ON MERIT, THEN FOR THE PURPOSE OF CHALLENGIN G ORDER OF CIT(A) IN FURTHER APPEAL THE CASE WOULD BE REQUIRED TO BE EXA MINED ON MERIT. APPEAL WOULD NOT BE SIMPLY FILED BECAUSE THE CASE F ALLS 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. I N OTHER WORDS, THE DEPARTMENT HAS TO ASSESS MERITS OF THE DISPUTE INVO LVED AND THEY WILL NOT FILE FURTHER APPEAL AGAINST ORDER OF THE CIT(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 CIRCULAR NO.21/2015, REGARDING CASES WHERE ADDITION MADE ON ACCOUNT OF REVENUE AUDIT OBJECTION IS DELETED, IS B EING ERRONEOUSLY INTERPRETED AND APPEALS ARE BEING MECHA NICALLY FILED BY THE DEPARTMENT WITHOUT PROPER EXAMINATION OF THE CASE ON MERITS. THIS IS CONTRARY TO THE INSTRUCTIO NS CONTAINED IN CIRCULAR NO.21/2015 AND CIRCULAR 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 MENTIONE D IN THE MA NO.363/AHD/2019 3 SAID PARA, APPEALS AGAINST THE ADVERSE JUDGMENT SHO ULD ONLY BE FILED ON MERITS. 4. WE HAVE ALSO CONFRONTED WITH THE LD.DR WITH JUDG MENT OF HONBLE BOMBAY HIGH COURT IN THE CASE OF PR.CIT VS. NAWANY CONSTRUCTION CO. (P.) LTD. REPORTED IN 98 TAXMANN.COM 294 (BOMBAY). 5. THE HONBLE BOMBAY HIGH COURT HAS CONSIDERED THI S CIRCULAR AND OBSERVED THAT MERE RAISING AN AUDIT OBJECTION IS NO T 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 I NCOME TAX APPEAL NO.254 OF 2013 ON THE FILE OF THIS COURT, NE ITHER THE REVENUES CIRCULAR DATED 11-7-2018 IS REFERRED NOR ANY CONDITION THEREIN. IF THE CONDITION NOW RELIED UPO N IS WITH REGARD TO THE REVENUE AUDIT OBJECTION, THEN, MERE R AISING OF THIS OBJECTION IN TERMS OF THIS CIRCULAR IS NOT ENO UGH. THE REVENUE WILL HAVE TO POINT OUT THAT THIS AUDIT OBJE CTION HAS BEEN ACCEPTED BY THE DEPARTMENT. WE HAVE NO SUCH R ECORD 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 S HALL 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 ATTRACT ED OR NOT WOULD HAVE TO BE PROVED AND ESTABLISHED BY THE REVE NUE. ONCE THERE IS NO SUCH RECORD BEFORE US, WE DO NOT COUNTENANCE THE ORAL REQUEST OF MR. PINTO. CONSEQU ENTLY, WE DO NOT SEE ANY REASON TO ENTERTAIN THIS APPEAL. IT IS DISMISSED. 6. THE LD.DR WAS UNABLE TO CONTROVERT THE ABOVE POS ITION. 7. ON DUE CONSIDERATION OF ALL THESE FACTS, CIRCULA RS OF THE BOARD, AS ALSO IN THE LIGHT OF HONBLE BOMBAY HIGH COURT DECI SION 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 4 EVALUATION OF MERIT ON THE ISSUES INVOLVED. IT SOU GHT TO RECALL 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 AND THE MISCELLA NEOUS APPLICATION IS REJECTED. 8. SO FAR AS WRONG MENTIONING OF THE ASSESSMENT YEA R I.E. 2010-11 INSTEAD OF 2011-12 OF THE ASSESSEES CASE IN THE LI ST OF CASES ATTACHED WITH THE IMPUGNED ORDER, THE SAME IS MERE A TYPOGRA PHICAL ERROR, AND SHALL STAND MODIFIED TO THE EXTENT THAT ASSESSMENT YEAR IN ITA NO.324/AHD/2019 BE READ AS A.Y.2011-12. THE IMP UGNED ORDER IS MODIFIED ACCORDINGLY. 9. IN THE RESULT, MISC. APPLICATION OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE COURT ON 20 TH JANUARY, 2020 AT AHMEDABAD. SD/- SD/- (WASEEM AHMED) ACCOUNTANT MEMBER (RAJPAL YADAV) JUDICIAL MEMBER