INCOME TAX OFFICER, WARD-1, Srikakulam V. PRIMARY AGRICULTURAL CO OPERATIVE CREDIT SOCIETY, HARIPURAM

MA 40/VIZ/2023

• Counselvise Citation: [2023] 101 COUNSELVISE.COM (IT) 9399 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 5 month(s) 28 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 20-12-2023
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 07-12-2023
• Assessment Year: 2018-2019
• Appeal Filed On: 22-06-2023
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A ARUNA GVN
• Keywords: Tax effect; Tax effect
• Section: 80P; 139(1)

Judgement Text

आयकर अपीलȣय अͬधकरण, ͪवशाखापटणम SMC पीठ, ͪवशाखापटणम IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM Įी दुåवूǽ आर एल रेɬडी, ÛयाǓयक सदèय के सम¢ BEFORE SHRI DUVVURU RL REDDY, HON’BLE JUDICIAL MEMBER MA No.40/Viz/2023 (In आयकर अपील सं./ I.T.A. No.209/Viz/2023) (Ǔनधा[रण वष[/ Assessment Year :2018-19) Income Tax Officer, Ward-1, Srikakulam. Vs. Primary Agricultural Cooperative Credit Society, 1-116, Haripuram, Mandasa, Srikakulam, Andhra Pradesh. (अपीलाथȸ/ Appellant) (Ĥ×यथȸ/ Respondent) अपीलाथȸ कȧ ओर से/ Appellant by : Smt A Aruna for Sri GVN Hari, AR Ĥ×याथȸ कȧ ओर से/ Respondent by : Sri Madhukar Aves, Sr. AR सुनवाई कȧ तारȣख/ Date of Hearing : 8/12/2023 घोषणा कȧ तारȣख/Date of Pronouncement : 21/12/2023 O R D E R PER DUVVURU RL REDDY, Judicial Member : This Miscellaneous Application is filed by the Revenue seeking recall of the order of the Tribunal dated 06/01/2023 in ITA No. 209/Viz/2022 for the AY 2018-19. 2 2. At the outset, the Ld. Department Representative submitted that the appeal of the Revenue in ITA No. 209/Viz/2022 (AY 2018-19) was dismissed by the Tribunal on the ground that the tax effect involved in this appeal is below Rs. 50 lakhs and relied on the Central Board of Direct Taxes [CBDT] Circular No. 17/2019, dated 8/8/2019 while dismissing the Revenue’s appeal. The Ld. DR further submitted that in para-2 of the Tribunal’s order (supra), the Hon’ble Tribunal has granted liberty to the Revenue to file MA to recall the order, in case the tax effect involved in the appeal is more than the mone tary limit prescribed as per the Board’s Circular or the case is covered by any of the exceptions in the said Circular. Taking cue of this observation of the Hon’ble Tribunal, the Ld DR drawn my attention to the Ground No.6 of the original Grounds of Appeal raised by the Revenue in its main appeal and read out the same which is as follows: “6. Though the tax effect involved in this case is below the mone tary limits prescribed by the CBDT, the case is covered under exception 10(a) of the CBDT Circular No. 17/2019 i.e., where the constitutional validity of the provision of an Ac t or Rule is under challenge, thereby giving right to the Department to file further appeal”. 3 3. Stating the above, the Ld. DR submitted that since in the case on hand the Constitutional validity of the provisions of Income Tax Act is under challenge, this case is covered under the Exceptional Clause (a) of Para 10 of the CBDT Circular No. 3/2018, dated 20/08/2018 and therefore the order of the Tribunal may be recalled. The Ld. DR has also relied on the decision of the Hon’ble Supreme Court in the case of Karimtharuvi Tea Estate Ltd.v.State of Kerala reported in [1966] 60 ITR 263 (SC). The Ld. DR further submitted that the Ld. AO made disallowance of deduction U/s. 80P of the Act for an amount of Rs. 26,25,660/- claimed by the assessee. He further also submitted that the provisions of section 80AC of the Act was amended by the Finance Act 2018 whereby the assessee has to file the return of income within the due date U/s. 139(1) of the Act. Since the assessee did not comply to the amended provisions of the Statute the disallowance U/s. 80P resulted in demand of Rs. 11,51,150/- . The Ld. DR further submitted that since the constitutional validity of the provisions of the Income Tax Act was under challenge, the appeal before the Tribunal was filed on 20/10/2022 even though the tax effect in the case is below the monetary limits. Ld. DR therefore pleaded that to this extent, 4 there is a mistake apparent from the order of the Hon’ble Tribunal dated 06/01/2023 (supra) and hence the order passed by the Tribunal may be recalled and the appeal of the Revenue may be allowed. 4. On the other hand, Ld. Authorized Representative strongly relied on the order of the Tribunal and supported the decision taken by the Bench. 5. I have heard both the parties and perused the material available on record as well as the orders of the Ld. Revenue Authorities and also the order of the Tribunal in the ITA No. ITA No. 209/Viz/2022 (AY 2018-19), dated 6/1/2023. It is a fact that the tax effect involved in the appeal filed by the Revenue is below Rs. 50 lakhs and therefore the applicability of the CBDT Circular No. 17/2019, dated 8/8/2019 is not disputed by the Revenue. The contention of the Ld. DR is that the case of the Revenue falls under the Exceptional Clause (a) of Para 10 of the CBDT Circular No.3/2018, dated 20/08/2018. For the sake of reference, the Exceptional Clause (a) of Para 10 of the CBDT Circular is extracted herein below for reference: “10. Adverse judgments relating to the following issues should be contested on merits notwithstanding that the tax effect 5 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 provisions of an Act or Rule is under challenge, or (b) ..... (c) ...... (d) ......” 6. From the above it is apparent that, in any case where the Constitutional validity of the provisions of the Act or Rule is under challenge, then the monetary limits specified by the CBDT in its Circular (supra) to give tax effect would not come into play. In the present case, the Revenue has not furnished any evidence or brought to my notice to prove that the decision of the Ld. CIT(A) or the issues involved in the Revenue’s Appeal are under challenge before any Constitutional Courts with reference to the Constitutional validity of the provisions of the Act or Rule relatable to the Revenue’s appeal (ITA No. 209/Viz/2022). Further, I am of the considered view that the onus is on the Revenue to establish that how the case falls under the Exceptional Clause (a) of Para 10 of the Board’s Circular (supra) and they should prove that the issues involved in the appeal or the decision of the Ld. CIT (A) is challenged with reference to the Constitutional validity of the provisions of the Income Tax Act, 1961 or the Rules before any Constitutional Judicial Forums. In 6 the absence of the same, merely stating that since this case falls under the Exceptional Clause (a) of Para 10 of the CBDT Circular No. 3/2018, dated 20/08/2018 and therefore the order of the Tribunal needs to be recalled does not have any merit. From the above observations, I have no hesitation to come to a conclusion that since the tax effect involved in the Revenue’s appeal is below Rs. 50 lakhs, the application of Board’s Circular No. 17/2019, dated 8/8/2019 by the Tribunal while dismissing the Revenue’s is appropriate and hence I find no mistake apparent in the order of the Tribunal (supra). Accordingly, the Miscellaneous Application filed by the Revenue is dismissed. 7. In the result, Miscellaneous Application filed by the Revenue is dismissed. Pronounced in the open Court on 21 st December, 2023. Sd/- (दुåवूǽआर.एलरेɬडी) (DUVVURU RL REDDY) ÛयाǓयकसदèय/JUDICIAL MEMBER Dated : 21 st December, 2023. OKK - SPS 7 आदेशकȧĤǓतͧलͪपअĒेͪषत/Copy of the order forwarded to:- 1. Ǔनधा[ǐरती/ The Assessee–Primary Agricultural Cooperative Credit Society, 1-116, Haripuram, Mandasa, Srikakulam, Andhra Pradesh. 2. राजèव/The Revenue – Income Tax Officer, Ward-1, Srikakulam. 3. The Principal Commissioner of Income Tax, 4.आयकरआयुÈत (अपील)/ The Commissioner of Income Tax (Appeals), 5. ͪवभागीयĤǓतǓनͬध, आयकरअपीलȣयअͬधकरण, ͪवशाखापटणम/ DR,ITAT, Visakhapatnam 6.गाड[फ़ाईल / Guard file आदेशानुसार / BY ORDER Sr. Private Secretary ITAT, Visakhapatnam