ACIT, Circle-5(2), Ahmedabad V. M/s. Meghmani LLP., Ahmedabad

MA 399/AHD/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 3130 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 month(s) 15 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 11-03-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2012-2013
• Appeal Filed On: 27-12-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Audit objection; Tax effect

Judgement Text

- , - IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH A BEFORE SHRI RAJPAL YADAV, VICE-PRESIDENT AND SHRI WASEEM AHMED, ACCOUNTANT MEMBER MA/ITA .NO/ ASSTT.YEAR APPELLANT RESPONDENT 389 /AHD/201 9 IN 790/AHD/2019 AY : 2012-13 ITO, WARD - 5(2)(2) AHMEDABAD. BHAVI TOURS & TRAVELS 8, RAINBOW COMPLEX NR.OLD HIGH COURT RLY. CROSSING NAVRANGPURA, AHMEDABAD. 394/AHD/2019 IN 634/AHD/2019 AY : 2012-13 ITO, WARD - 2(1)(2) AHMEDABAD. M/S.JAYESH STEEL PROCESS P.LTD. 4 TH FLOOR, PARISEEMA COMPLEX OPP: SWAGAT BLDG. C.G.ROAD AHMEDABAD . PAN : AAACJ 7360 H 399/AHD/2019 IN 1744/AHD/2018 AY : 2012-13 DCIT , CIR.5(2) AHMEDABAD. M/S.MEGHMANI LLP 11 TH FLOOR, JM C HOUSE,EDN CO-OP. HSG. & OFFICE SOCIETY LTD. OPP: PARIMAL GARDEN ELLISBRIDGE, AHMEDABAD. REVENUE BY : SHRI DILIPKUMAR, SR.DR ASSESSEE BY : NONE / DATE OF HEARING : 06/03/2020 ! / DATE OF PRONOUNCEMENT: 11/03/2020 / O R D E R PER RAJPAL YADAV, VICE-PRESIDENT PRESENT THREE MISC. APPLICATIONS ARE DIRECTED AT TH E INSTANCE OF REVENUE POINTING OUT APPARENT ERROR IN THE ORDER OF THE TRI BUNAL. 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 PR OHIBITED FROM FILING APPEALS BEFORE THE TRIBUNAL WHERE TAX EFFECT BY VIR TUE OF RELIEF GRANTED BY THE MA NO.389/AHD/2019 AND 2 OTHERS 2 CIT(A) IS LESS THAN RS.50 LAKHS. THIS CIRCULAR ALS O 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 APPEALS ON THE GROUND THAT TAX EFFECT INVOLVED IN THESE APPEALS IS LESS THAN RS.50 LAKHS. OUT OF THIS BUNC H OF 628 APPEALS, THE REVENUE HAS FILED APPLICATIONS POINTING OUT APPARE NT ERROR. THE PRESENT THREE APPLICATIONS ARE ALSO FROM THAT VERY BUNCH. IN THE SE APPLICATIONS, THE REVENUE HAS PLEADED THAT THE ASSESSMENT WAS REOPENED ON THE BASIS OF THE AUDIT OBJECTION, AND IT HAS BEEN PROVIDED IN THE CIRCULAR THAT IF THE ASSESSMENT HAS BEEN REOPENED ON THE BASIS OF AUDIT OBJECTION, THEN THAT APPEAL AGAINST THE ORDER OF THE LD.CIT(A) WOULD BE DECIDED ON MERIT IN STEAD OF DISMISSING 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 BH AVSAR 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 ACCEPTED BY THE DEPARTMENT, THEN THE APPEALS OF SUCH ISSUES WOU LD BE CONTESTED ON MERIT AND WILL NOT BE WITHDRAWN BY VIRTUE OF THESE INSTRUCTIONS. SINCE IT WAS A CASE, REOPENED ON AUDIT OBJECTION, THEREFORE IT FALLS WITHIN 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 DATE D 23/01/2017. THESE INSTRUCTIONS PROVIDE THAT EVEN IF AN ASSESSME NT 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 THE ORDER OF CIT(A) IN FURTHER APPEAL THE CASE WOULD BE REQUIRED TO BE EXAMINED ON MERIT. SIMPLY THE APPEAL WOULD NOT BE FILED BECAUSE THE CASE FALLS MA NO.389/AHD/2019 AND 2 OTHERS 3 WITHIN THE EXCEPTIONAL CLAUSE OF THE CBDT INSTRUCTI ON FOR NOT FILING THE APPEAL WHERE THE TAX EFFECT BY VIRTUE OF RELIEF GRA NTED BY THE CIT(A) IS LESS THAN THE MONETARY LIMIT FOR FILING SUCH APPEAL S. IN OTHER WORDS, THE DEPARTMENT HAS TO ASSESS THE MERITS OF THE DISPUTE INVOLVED AND IT WILL NOT FILE FURTHER APPEAL AGAINST THE ORDER OF THE CI T(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 FILE D BY THE DEPARTMENT WITHOUT PROPER EXAMINATION OF THE CASE O N MERITS. THIS IS CONTRARY TO THE INSTRUCTIONS CONTAINED IN C IRCULAR 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 MENTIONED IN THE SAID PARA, APPEALS AGAINST THE ADVERSE JUDGMENT SHOULD ONLY BE FILED ON MERITS. 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.C OM 294 (BOMBAY). 5.2. THE HONBLE BOMBAY HIGH COURT HAS CONSIDERED T HIS CIRCULAR AND OBSERVED THAT MERELY RAISING OF THE AUDIT OBJECTION IS NOT SUFFICIENT FOR RECALL OF THE ORDER. THE RELEVANT PART OF THE DISCU SSION 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, NE ITHER 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 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 HA S BEEN ACCEPTED BY THE DEPARTMENT. WE HAVE 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 CIRCUL ARS CONTINUE TO BIND THE REVENUE AND IF THEY CONTAIN ANY CONDITI ONS, WHETHER SUCH CONDITIONS ARE ATTRACTED OR NOT WOULD HAVE TO BE PROVED AND ESTABLISHED BY THE REVENUE. ONCE THERE IS NO SUCH R ECORD BEFORE US, WE DO NOT COUNTENANCE THE ORAL REQUEST OF MR. P INTO. MA NO.389/AHD/2019 AND 2 OTHERS 4 CONSEQUENTLY, WE DO NOT SEE ANY REASON TO ENTERTAIN THIS APPEAL. IT IS DISMISSED. 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 BOMBAY HIGH COURT DECISION, WE ARE OF THE VIEW THAT DEPARTMENT HAS NO T BROUGHT ANY SUBSTANTIAL MATERIAL ON THE RECORD POINTING OUT THA T APPEAL WAS FILED AFTER EVALUATION OF MERIT ON THE ISSUES INVOLVED. I T SOUGHT TO RECALL THE ORDER OF THE TRIBUNAL MERELY ON THE BASIS OF AUDIT OBJECTION, WHICH IS NOT SUFFICIENT FOR RECALLING THE TRIBUNAL ORDER. TH EREFORE, WE DO NOT FIND ANY ERROR IN THE ORDER OF THE TRIBUNAL AND THE MISC ELLANEOUS APPLICATION IS REJECTED. 4. WE HAVE ALSO PERUSED THE PRESENT THREE MAS. AND FIND THAT DEPARTMENT HAS NOT DEMONSTRATED THE FACT THAT MATERIALS WERE E VALUATED BEFORE CHALLENGING THE ORDER OF THE CIT(A) IN APPEAL BEFORE THE TRIBUN AL. THUS, THERE IS NO DISPARITY ON THE FACTS BETWEEN THE FINDING RECORDED BY US IN THE CASE OF SHRI ASHOKKUMAR HARIKISHANBAHI BHAVSAR VIS--VIS IN THES E THREE PRESENT MAS. ACCORDINGLY, WE DO NOT FIND ANY MERIT IN THESE APPL ICATIONS. THESE ARE DISMISSED. 5. IN THE RESULT, ALL THREE MISC. APPLICATIONS ARE DISMISSED. ORDER PRONOUNCED IN THE COURT ON 11 TH MARCH, 2020 AT AHMEDABAD. S D / - (WASEEM AHMED) ACCOUNTANT MEMBER S D / - (RAJPAL YADAV) VICE-PRESIDENT AHMEDABAD; DATED 11/03/2020