ACIT, Madurai V. V.V.R.Sathiyam, Virudhunagar

MA 402/CHNY/2017

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 0998 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 9 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 03-09-2018
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2010-2011
• Appeal Filed On: 24-08-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: R CLEMENT RAMESH KUMAR
• Assessee Lawyers: SHANMUGAVEL C A
• Keywords: Audit objection; Earning of tax free income; Tax effect
• Section: 14A

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : CHENNAI . , , BEFORE SHRI ABRAHAM P.GEORGE, ACCOUNTANT MEMBER AND SHRI GEORGE MATHAN, JUDICIAL MEMBER M.P.NO.402/CHNY/2017 (IN ./I.T.A. NO.3325/CHNY/2016) / ASSESSMENT YEAR : 2010-2011) THE ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 2, MADURAI. VS. SHRI. V.V.R. SATHIYAM, NO.443, MAIN BAZAAR, VIRUDHUNAGAR 626 001. [PAN AHNPS 9284N] ( / APPELLANT) ( /RESPONDENT) ! ' # / APPELLANT BY : SHRI. R. CLEMENT RAMESH KUMAR, ADDL. CIT $%! ' # /RESPONDENT BY : SHRI. SHANMUGAVEL, C.A. & ' ' () /DATE OF HEARING : 24-08-2018 *+ ' () /DATE OF PRONOUNCEMENT : 03-09-2018 / O R D E R PER ABRAHAM P. GEORGE, ACCOUNTANT MEMBER: THROUGH THIS MISCELLANEOUS PETITION FILED BY THE REVENUE, IT PLEADS FOR RECALL OF AN ORDER DATED 09.03.2017 O F THIS TRIBUNAL IN ITA NO.3325/CHNY/2016. M.P.NO.402/2017 ITA NO. 3325/2016. :- 2 -: 2. LD. COUNSEL FOR THE REVENUE SUBMITTED THAT THE APP EAL WAS FILED BEFORE THIS TRIBUNAL CONSIDERING REVENUE AUDI T OBJECTIONS. AS PER THE LD. DEPARTMENTAL REPRESENTATIVE, REVENUE AUDIT OBJECTIONS WERE ACCEPTED BY THE DEPARTMENT. HENCE AS PER THE LD. DE PARTMENTAL REPRESENTATIVE, CIRCULAR NO.21/2015, DATED 10.12.20 15 OF CBDT RELIED ON BY THIS TRIBUNAL, FOR DISMISSING THE APPEAL OF T HE REVENUE, FOR LOW TAX EFFECT, WAS NOT APPLICABLE. THUS, ACCORDING TO HIM, THE APPEAL HAD TO BE RECALLED AND RE-FIXED FOR HEARING. 3. PER CONTRA, LD. AUTHORISED REPRESENTATIVE SUBMITTED THAT EVEN IF THE APPEAL WAS RE-FIXED FOR HEARING, THE D ISALLOWANCE U/S.14A OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) WHICH WAS AN ISSUE RAISED BY THE DEPARTMENT, COULD AT THE BEST BE MA DE FOR A SUM OF D73,062/- ONLY. AS PER THE LD. AUTHORISED REPRESEN TATIVE, THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) WAS JU STIFIED AND UNIMPEACHABLE IN THIS REGARD. RELIANCE WAS PLACED O N THE JUDGMENT OF HONBLE DELHI HIGH COURT IN THE CASE OF JOINT INVESTMENT P. LTD VS. CIT 372 ITR 694. 4. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND PERUSE D THE ORDERS. NO DOUBT, WE ARE ACCEPTING THE CONTENTIO N OF THE DEPARTMENT THAT THE APPEAL HAVING BEEN FILED BY TH E REVENUE BASED ON AUDIT OBJECTIONS, CIRCULAR NO.21/2015, DATED 10. 12.2015 WAS NOT M.P.NO.402/2017 ITA NO. 3325/2016. :- 3 -: APPLICABLE. ACCORDINGLY, WE RECALL THE ORDER DATED 09.03.2017 OF THIS TRIBUNAL. 5. COMING TO THE MERITS OF THE CASE, WE FIND THAT LD. ASSESSING OFFICER HAD IN THE FIRST PLACED NOT RECORDED A SATI SFACTION AS TO HOW THE DISALLOWANCE COMPUTED BY THE ASSESSEE U/S.14A OF T HE ACT AT DNIL WAS INCORRECT. BY VIRTUE OF JUDGMENT OF HONBLE APEX CO URT IN THE CASE OF MAXOPP INVESTMENT LTD VS. CIT (CIVIL APPEAL NOS.104 TO 109 OF 2015, DATED 12.02.2018 ), IT IS IMPERATIVE FOR THE LD. ASSESSING OFFICER TO RECORD A SATISFACTION THAT THE CLAIM OF EXPENDITURE MADE BY THE ASSESSEE WITH REGARD TO EXEMPT INCOME WAS INCORRECT BEFORE APPLYING RULE 8D OF THE ACT. BE THAT AS IT MAY, WE FIND TH AT EXEMPT INCOME CLAIMED BY THE ASSESSEE WAS D73,062/- ONLY AND LD. COMMISSIONER OF INCOME TAX (APPEALS) HAD RESTRICTED THE DISALLOWANC E UNDER SECTION 14A OF THE ACT TO THE SAID AMOUNT RELYING ON THE J UDGMENT OF HONBLE DELHI HIGH COURT IN THE CASE OF JOINT INVESTMENT P. LTD (SUPRA). WE THEREFORE FIND NO REASON TO INTERFERE WITH THE ORDE R OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS). ACCORDINGLY W E ALLOW THE MISCELLANEOUS PETITION FILED BY THE REVENUE, RECAL L THE ORDER OF THE TRIBUNAL AND THE RECALLED APPEAL IS HEREBY DISMISSE D FOR THE REASONS MENTIONED SUPRA. M.P.NO.402/2017 ITA NO. 3325/2016. :- 4 -: 6. IN THE RESULT, MISCELLANEOUS PETITION FILED BY THE REVENUE IS ALLOWED. IMPUGNED ORDER IS RECALLED. RECALLED APPE AL IS HEARD AND DISMISSED ORDER PRONOUNCED ON MONDAY, THE 3 RD DAY OF SEPTEMBER, 2018, AT CHENNAI. SD/- SD/- ( ) (GEORGE MATHAN) / JUDICIAL MEMBER ( . '#'$ ) (ABRAHAM P. GEORGE) % & / ACCOUNTANT MEMBER - ' / CHENNAI . / DATED: 3RD SEPTEMBER, 2018. KV / ' $(0 1 2 1 ( / COPY TO: 1 . ! / APPELLANT 3. & 3( ( ) / CIT(A) 5. 167 $(8 / DR 2. $%! / RESPONDENT 4. & 3( / CIT 6. 79 :' / GF