The ACIT, Circle-2(1)(2), Ahmedabad V. Rajeshkumar Shantilal Sanghvi, Ahmedabad

MA 396/AHD/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 6972 (ITAT-AHMEDABAD)
• Duration Of Justice: 8 month(s) 13 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 09-09-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2012-2013
• Appeal Filed On: 26-12-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Audit objection; Tax effect

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD [ CONDUCTED THROUGH VIRTUAL COURT] BEFORE SHRI RAJPAL YADAV, VICE PRESIDENT AND SHRI WASEEM AHMED, ACCOUNTANT MEMBER SL. NOS. MA NO(S) [IN ITA NO(S)] ASSESS- MENT YEAR (S) MISCELLANEOUS APPLICATION(S) BY APPLICANTS VS. RESPONDENTS APPLICANTS RESPONDENTS 1. 396/AHD/2019 (IN ITA 1139/A/19) 2012-13 THE ACIT CIRCLE-2(1)(2) AHMEDABAD SHRI RAJESHKUMAR SHANTILAL SANGHVI 11, PARVATI NAGAR NR.KOTHARI AUTOMOBILES OPP.DHANANJAY TOWER SHYAMAL CHAR RASTA AHMEDABAD PAN:ACIPS 6389 N 2. 24/AHD/2020 (IN ITA 475/A/2018) 2012-13 DY.CIT CIRCLE-3(1) VADODARA SHRI BHAVANBHAI R.BHARWAD 111, MOTI BAPOD GAON BHARWARD NIVAS, BAPOD VADODARA PAN:ACGPB 2964 E 3. 136/AHD/2020 (IN ITA 116/A/19) 2013-14 ITO WARD-4 PALANPUR SHRI IBRAHIMBHAI VALIMAHMED MANKANOJIYA AT KHEROJ (DIVDI), POST VASI, TAL DANTA BANASKANTHA 385 120 PAN: ALUPM 8668 F 4. 43/AHD/2020 (IN ITA 2034/A/18) 2012-13 THE DCIT CIRCLE-3(2) AHMEDABAD M/S.PHARMATECH PROCESS EQUIPMENTS SURVEY NO.423, SUB PLOT NO.3 & 10 MAHARAJGUNJ INDUSTRIAL ESTATE MORAIYA VILLAGE TALUKA: SANAND DIST.AHMEDABAD PAN:AALFP 9099 B 5. 36/AHD/2020 (IN ITA 1767/A/18) 2012-13 ITO WARD-2(1)(1) AHMEDABAD M/S.MAS CHEMICALS PVT.LTD. B/H. ATIRA NR. MANALI APARTMENTS MA NO.396/AHD/2019 (IN ITA NO.1139/AHD/2019) ACIT VS. SHRI RAJESHKUMAR SHANTILAL SANGHVI (AY 2 012-13) [AND 10 OTHER MAS] - 2 - DR. V.S.ROAD AHMEDABAD-380 015 PAN: AABCM 6329 A 6. 46/AHD/2020 (IN ITA 2772/A/17) 2010-11 ACIT ANAND CIRCLE, ANAND M/S.EMTICI ENGINEERING LTD. ANAND SOJITRA ROAD ANAND PAN: AAACE 4642 F 7. 44/AHD/2020 (IN ITA 2129/A/14) 2007-08 ACIT ANAND CIRCLE ANAND M/S.MARGEN IMPEX LTD. PLOT NO.801, PHASE-IV, ZONE E:12 GIDC ESTATE VU NAGAR, ANAND PAN: AACCM 2105 R 8. 15/AHD/2020 (IN ITA 412/A/19) 2012-13 ITO WARD-1 GANDHINAGAR M/S. A.B. ENGINEERS C-13, NR.KAVERI PARTY PLOT GIDC, SECTOR-25 GANDHINAGAR 382 025 PAN: AAHFA 6158 L 9. 11/AHD/2020 (IN ITA 82/A/19) 2007-08 ACIT MEHSANA CIRCLE MEHSANA SMT.GANGABEN JIVRAJBHAI DESAI HOTEL RANGOLI, 5, ASHOKNAGAR SOCIETY RADHANPUR ROAD MEHSANA 384 002 PAN: AAWPD 3290 K 10. 12/AHD/2020 (IN ITA 83/A/19) 2008-09 -DO-REVENUE -DO-ASSESSEE 11. 13/AHD/2020 (IN ITA 84/A/19) 2008-09 -DO-REVENUE -DO-ASSESSEE / APPLICANTS BY : SHRI DILEEPKUMAR, SR.DR / RESPONDENTS BY : SL.NOS. 1. SHRI P.D. SHAH, AR 2. NONE 3. NONE 4. SHRI M.K. PATEL, AR MA NO.396/AHD/2019 (IN ITA NO.1139/AHD/2019) ACIT VS. SHRI RAJESHKUMAR SHANTILAL SANGHVI (AY 2 012-13) [AND 10 OTHER MAS] - 3 - 5. SHRI TUSHAR HEMANI WITH SHRI PARIMAL SINGH PARMAR,ARS 6. SHRI MEHUL K.PATEL, AR 7. SHRI S.N.DIVATIA, AR 8. NONE 9-11. S.N. DIVATIA, AR / DATE OF HEARING 04/09/2020 / DATE OF PRONOUNCEMENT 9/09/2020 / O R D E R PER RAJPAL YADAV, VICE PRESIDENT: ALL THESE MISCELLANEOUS APPLICATIONS ARE DIRECTED A T THE INSTANCE OF THE REVENUE CONTENDING THEREIN THAT CBDT HAS ISSUED CIR CULAR NO.17 OF 2019 DATED 08/08/2019, WHEREBY IT WAS PROVIDED THAT APPE ALS OF THE REVENUE WILL NOT BE MAINTAINABLE BEFORE THE TRIBUNAL IF TAX EFFE CT INVOLVED BY VIRTUE OF RELIEF GIVEN BY THE CIT(A) IS BELOW RS.50 LAKHS. A T SL.NO.8 OF THE CIRCULAR, CERTAIN EXCEPTIONS HAVE BEEN CARVED OUT. AFTER ISS UANCE OF THIS CIRCULAR, TRIBUNAL HAS IDENTIFIED 628 APPEALS INCLUDING CERTA IN CROSS OBJECTIONS, WHERE TAX EFFECT BY VIRTUE OF RELIEF GIVEN BY THE LD.CIT( A) WAS LESS THAN RS.50 LAKHS. ALL THESE APPEALS HAVE BEEN DISMISSED BY THE TRIBUN AL ON 14/08/2019 BY APPLYING THE CIRCULAR OF THE BOARD. 2. IN THE PRESENT APPLICATIONS, IT HAS BEEN PLEAD ED THAT ONE OF THE EXCEPTIONS PROVIDED IN THE CIRCULAR IS, THAT IF ANY AUDIT OBJECTION WAS RAISED IN THE CASE OF ANY ASSESSEE AND THAT AUDIT OBJECTION W AS ACCEPTED BY THE DEPARTMENT, THEN THOSE APPEALS WILL NOT BE DECIDED ON THE BASIS OF THE MA NO.396/AHD/2019 (IN ITA NO.1139/AHD/2019) ACIT VS. SHRI RAJESHKUMAR SHANTILAL SANGHVI (AY 2 012-13) [AND 10 OTHER MAS] - 4 - CIRCULAR. ACCORDING TO THE REVENUE, IN THE PRESENT APPEALS, AUDIT OBJECTION WAS RAISED WHICH WAS ACCEPTED BY THE REVENUE AND, T HEREFORE, THE APPEALS IN THESE MISCELLANEOUS APPLICATIONS OUGHT NOT TO HAVE BEEN DISMISSED BY APPLYING THE CIRCULAR. 3. ON THE OTHER HAND, THE COUNSEL FOR THE ASSESSEES HAVE CONTENDED THAT THIS ISSUE HAS BEEN CONSIDERED BY THE TRIBUNAL IN A LARGE NUMBER OF APPLICATIONS. THEY HAVE PLACED ON RECORD A COPY OF THE ORDER OF ITAT DATED 11/03/2020 PASSED IN MA NO.389/AHD/2019 (IN ITA NO. 790/AHD/2019) FOR AY 2012-13 AND OTHERS. ACCORDING TO THEM, THIS ASP ECT HAS BEEN CONSIDERED AND, THEREFORE, AFTER PLACING RELIANCE UPON THE DEC ISION OF HONBLE BOMBAY HIGH COURT, TRIBUNAL HAS DISMISSED ALL SIMILAR APPL ICATIONS. 4. WE HAVE DULY CONSIDERED THE RIVAL CONTENTIONS AN D GONE THROUGH THE RECORDS CAREFULLY. IN THE CASE OF BHAVI TOURS & TR AVELS, WE HAVE CONSIDERED THIS ASPECT AND THE DISCUSSIONS MADE BY US WHICH RE AD AS UNDER: PRESENT THREE MISC. APPLICATIONS ARE DIRECTED AT T HE INSTANCE OF REVENUE POINTING OUT APPARENT ERROR IN THE ORDER OF THE TRIBUNAL. 2. IT IS PERTINENT TO NOTE THAT ON 8.8.2019 CBDT HA S ISSUED A CIRCULAR BEARING NO.17 OF 2019 WHEREBY THE DEPARTMENT WAS PROHIBITED FROM FILING APPEALS BEFORE THE TRIBUNAL WHERE TAX EFFECT BY VIRTUE OF RELIEF G RANTED BY THE CIT(A) IS LESS THAN RS.50 LAKHS. THIS CIRCULAR ALSO CONTAINED CERTAIN EXCEPTIONS. ON THE STRENGTH OF THIS CIRCULAR, THE TRIBUNAL HAS DISPOSED OF 628 APPEALS OF THE REVENUE VIDE ORDER DATED 14.8.2019. THE TRIBUNAL HAS DISMISSED ALL THESE AP PEALS ON THE GROUND THAT TAX EFFECT INVOLVED IN THESE APPEALS IS LESS THAN RS.50 LAKHS. OUT OF THIS BUNCH OF 628 APPEALS, THE REVENUE HAS FILED APPLICATIONS POINTIN G OUT APPARENT ERROR. THE PRESENT THREE APPLICATIONS ARE ALSO FROM THAT VERY BUNCH. IN THESE APPLICATIONS, THE REVENUE HAS PLEADED THAT THE ASSESSMENT WAS REOPENE D ON THE BASIS OF THE AUDIT OBJECTION, AND IT HAS BEEN PROVIDED IN THE CIRCULAR THAT IF THE ASSESSMENT HAS BEEN MA NO.396/AHD/2019 (IN ITA NO.1139/AHD/2019) ACIT VS. SHRI RAJESHKUMAR SHANTILAL SANGHVI (AY 2 012-13) [AND 10 OTHER MAS] - 5 - REOPENED ON THE BASIS OF AUDIT OBJECTION, THEN THAT APPEAL AGAINST THE ORDER OF THE LD.CIT(A) WOULD BE DECIDED ON MERIT INSTEAD OF DISM ISSING IT ON TAX EFFECT. 3. WE HAVE HEARD THE LD.DR. WE FIND THAT IN THE PA ST ALSO NUMBER OF APPLICATIONS HAVE BEEN FILED BY THE REVENUE ON IDEN TICAL ISSUE. IN ONE OF THE CASES VIZ. VIZ. ITO VS. ASHOKUMAR HARIKISHANBAHI BHAVSAR IN ITA NO.32/AHD/2019, WE HAVE CONSIDERED IDENTICAL ISSUE. THE DISCUSSION MADE BY THE TRIBUNAL IN THAT ORDER READ AS UNDER: 4. IT HAS BEEN FURTHER PLEADED THAT INSTRUCTION NO .3/2018 CONTAINS EXCEPTIONAL CLAUSE AT SL.NO.8 OF THE INSTRUCTION. A CCORDING TO SUB-CLAUSE (C) OF CLAUSE 8 IF A REVENUE AUDIT OBJECTION HAS BEEN A CCEPTED BY THE DEPARTMENT, THEN THE APPEALS OF SUCH ISSUES WOULD B E CONTESTED ON MERIT AND WILL NOT BE WITHDRAWN BY VIRTUE OF THESE INSTRU CTIONS. SINCE IT WAS A CASE, REOPENED ON AUDIT OBJECTION, THEREFORE IT FALLS WIT HIN THE EXCEPTIONAL CLAUSE PROVIDED IN THE INSTRUCTION. 5. HOWEVER, DURING THE COURSE OF HEARING, WE HAVE C ONFRONTED THE LD. DR WITH THE CBDT INSTRUCTION BEARING NO.5/2017 DATED 2 3/01/2017. THESE INSTRUCTIONS PROVIDE THAT EVEN IF AN ASSESSMENT IS BEING REOPENED ON ACCOUNT OF AUDIT OBJECTION BUT THE ADDITIONS ARE DELETED BY THE CIT(A) ON MERIT, THEN FOR THE PURPOSE OF CHALLENGING THE ORDER OF CIT(A) IN FURTHER APPEAL THE CASE WOULD BE REQUIRED TO BE EXAMINED ON MERIT. SIMPLY T HE APPEAL WOULD NOT BE FILED BECAUSE THE CASE FALLS 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 LIM IT FOR FILING SUCH APPEALS. IN OTHER WORDS, THE DEPARTMENT HAS TO ASSESS THE ME RITS OF THE DISPUTE INVOLVED AND IT WILL NOT FILE FURTHER APPEAL AGAINS T THE ORDER OF THE CIT(A) OR ITAT IN A MECHANICAL MANNER. THE RELEVANT PARA-3 OF CIRCULAR 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 BEING ERRONE OUSLY INTERPRETED AND APPEALS ARE BEING MECHANICALLY FILED BY THE DEP ARTMENT WITHOUT PROPER EXAMINATION OF THE CASE ON MERITS. THIS IS C ONTRARY TO THE INSTRUCTIONS CONTAINED IN CIRCULAR NO.21/2015 AND C IRCULAR NO.8/2016. IT IS THEREFORE, CLARIFIED THAT THE IMPORT AND INTE NT OF PARA 8 OF THE CIRCULAR NO.21/2015 IS THAT EVEN ON ISSUES MENTIONE D IN THE SAID PARA, APPEALS AGAINST THE ADVERSE JUDGMENT SHOULD O NLY BE FILED ON MERITS. MA NO.396/AHD/2019 (IN ITA NO.1139/AHD/2019) ACIT VS. SHRI RAJESHKUMAR SHANTILAL SANGHVI (AY 2 012-13) [AND 10 OTHER MAS] - 6 - 5.1. WE HAVE ALSO CONFRONTED WITH THE LD. DR WITH T HE JUDGMENT OF HONBLE BOMBAY HIGH COURT IN THE CASE OF PR.CIT VS. NAWANY CONSTRUCTION CO. (P.) LTD. REPORTED IN 98 TAXMANN.COM 294 (BOMBAY). 5.2. THE HONBLE BOMBAY HIGH COURT HAS CONSIDERED THIS CIRCULAR AND OBSERVE D THAT MERELY RAISING OF THE 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 IN COME TAX APPEAL NO.254 OF 2013 ON THE FILE OF THIS COURT, NEITHER T HE REVENUES CIRCULAR DATED 11-7-2018 IS REFERRED NOR ANY CONDIT ION THEREIN. IF THE CONDITION NOW RELIED UPON IS WITH REGARD TO THE REV ENUE AUDIT OBJECTION, THEN, MERE RAISING OF THIS OBJECTION IN TERMS OF THIS CIRCULAR IS NOT ENOUGH. THE REVENUE WILL HAVE TO POINT OUT T HAT THIS AUDIT OBJECTION HAS BEEN ACCEPTED BY THE DEPARTMENT. WE H AVE NO SUCH RECORD BEFORE US. 9. IN THE CIRCUMSTANCES, WE FIND THAT THIS IS AN AT TEMPT 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 CONT INUE TO BIND THE REVENUE AND IF THEY CONTAIN ANY CONDITIONS, WHETHER SUCH CONDITIONS ARE ATTRACTED OR NOT WOULD HAVE TO BE PROVED AND ES TABLISHED BY THE REVENUE. ONCE THERE IS NO SUCH RECORD BEFORE US, WE DO NOT COUNTENANCE THE ORAL REQUEST OF MR. PINTO. CONSEQUE NTLY, WE DO NOT SEE ANY REASON TO ENTERTAIN THIS APPEAL. IT IS DISM ISSED. 6. THE LD. DR WAS UNABLE TO CONTROVERT THE ABOVE PO SITION. 7. ON DUE CONSIDERATION OF ALL THESE FACTS AND CIRC ULAR OF THE BOARD, I.E. CIRCULAR NO. 5 OF 2017 IN THE LIGHT OF HONBLE BOMB AY HIGH COURT DECISION, WE ARE OF THE VIEW THAT DEPARTMENT HAS NOT BROUGHT ANY SUBSTANTIAL MATERIAL ON THE RECORD POINTING OUT THAT APPEAL WAS FILED AFTER EVALUATION OF MERIT ON THE ISSUES INVOLVED. IT SOUGHT TO RECALL THE ORDER OF T HE TRIBUNAL MERELY ON THE BASIS OF AUDIT OBJECTION, WHICH IS NOT SUFFICIENT F OR RECALLING THE TRIBUNAL ORDER. THEREFORE, WE DO NOT FIND ANY ERROR IN THE O RDER OF THE TRIBUNAL AND THE MISCELLANEOUS APPLICATION IS REJECTED. 4. WE HAVE ALSO PERUSED THE PRESENT THREE MAS. AND FIND THAT DEPARTMENT HAS NOT DEMONSTRATED THE FACT THAT MATERIALS WERE EVALU ATED BEFORE CHALLENGING THE ORDER OF THE CIT(A) IN APPEAL BEFORE THE TRIBUNAL. THUS, THERE IS NO DISPARITY ON THE FACTS BETWEEN THE FINDING RECORDED BY US IN THE CAS E OF SHRI ASHOKKUMAR MA NO.396/AHD/2019 (IN ITA NO.1139/AHD/2019) ACIT VS. SHRI RAJESHKUMAR SHANTILAL SANGHVI (AY 2 012-13) [AND 10 OTHER MAS] - 7 - HARIKISHANBAHI BHAVSAR VIS--VIS IN THESE THREE PRE SENT MAS. ACCORDINGLY, WE DO NOT FIND ANY MERIT IN THESE APPLICATIONS. THESE ARE DI SMISSED. 5. IN THE RESULT, ALL THREE MISC. APPLICATIONS ARE DISMISSED. 5. SINCE THERE IS NO DISPARITY ON FACTS, THEREFORE RESPECTFULLY FOLLOWING THE ORDER OF THE TRIBUNAL IN THE CASE OF BHAVI TOURS & TRAVELS (SUPRA), WE DO NOT FIND ANY MERIT IN THESE MISCELLANEOUS APPLICATIONS FILED BY THE REVENUE. 6. IN THE RESULT, ALL THE MISCELLANEOUS APPLICATION S FILED BY THE REVENUE ARE DISMISSED. THIS ORDER PRONOUNCED IN OPEN COURT ON 9/09/2020 SD/- SD/- ( WASEEM AHMED ) ( RAJPAL YADAV ) ACCOUNTANT MEMBER VICE PRESIDENT AHMEDABAD; DATED 9 /09/2020 . . , . . . / T.C. NAIR, SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPLICANTS 2. / THE RESPONDENTS. 3. !'!#$ % / CONCERNED CIT 4. % ( ) / THE CIT(A)-1, BARODA AND CONCERNED. 5. &'( #$ , #$ , ' / DR, ITAT, AHMEDABAD 6. (+, / GUARD FILE. / BY ORDER, & //TRUE COPY// / (DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD