ITO TDS RG 2(3), V. MIDAS TOUCH EXPORT,

MA 41/MUM/2012

• Counselvise Citation: [2012] 123 COUNSELVISE.COM (IT) 8795 (ITAT-MUMBAI)
• Duration Of Justice: 4 month(s) 21 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 15-06-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Assessment Year: 2006-2007
• Appeal Filed On: 25-01-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M MURALI
• Keywords: Retrospective amendment; Tax effect
• Section: 260A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES F, MUMBAI BEFORE SHRI DINESH KUMAR AGARWAL (J.M.) AND SHRI N.K. BILLAIYA (A.M.) M.A. NO. 41/MUM/2012 ARISING OUT OF ITA NO. 2910/MUM/2010 ASSESSMENT YEAR : 2006-07 INCOME TAX OFFICER (TDS)- 2(3), ROOM NO. 708, 7 TH FLOOR, SMT. K.G. MITTAL AYURVEDIC HOSPITAL BUILDING, CHARNI ROAD, MUMBAI. 400 002. VS. M/S MIDAS TOUCH EXPORTS, 101, PARVATI INDUSTRIAL ESTATE, LOWER PAREL, MUMBAI- 400 013. PAN : AAEFM 6630 L (APPLICANT) (RESPONDENT) APPLICANT BY : SHRI M. MURALI RESPONDENT BY : SHRI VIMAL PUNMIYA DATE OF HEARING 15-6-2012 DATE OF PRONOUNCEMENT 15-6-2012 O R D E R PER DINESH KUMAR AGARWAL, J.M. THIS MISC. APPLICATION DTD. 23-1-2012 FILED BY THE REVENUE IS DIRECTED AGAINST THE ORDER DTD. 27-7-2011 PASSED BY THE TRIBUNAL IN ITA NO. 2910/MUM/2010 FOR THE A.Y. 2006-07 WHEREIN THE TRIBUNAL HAS DISMISSED THE REVENUES APPEAL ON THE GROUND THAT T HE TAX EFFECT IS LESS THAN RS. 3 LACS. MA NO. 41/MUM/2012 2 2. IN THE MISC. APPLICATION, IT WAS INTER ALIA STAT ED THAT IN PARA NO. 3 OF CBDT INSTRUCTION NO. 03/2011 DTD. 9-2-2011 IT HA S BEEN CATEGORICALLY MADE CLEAR THAT THE REVISED MONETARY LIMITS ARE APP LICABLE ONLY WITH PROSPECTIVE EFFECT AND, THEREFORE, IT WILL APPLY TO THE APPEALS TO BE FILED ONLY AFTER THE DATE OF SAID INSTRUCTION. IT WAS FU RTHER STATED THAT THE TRIBUNAL HAS ERRED IN RELYING UPON THE DECISION OF CIT VS. PITHWA ENGG. WORKS (2005) 276 ITR 519 (BOM) OVERLOOKING THE EXP RESS INTENTIONS OF THE CURRENT INSTRUCTION WHICH IS APPLICABLE PROSPEC TIVELY. IT WAS FURTHER STATED THAT IN THE CASE OF M/S SURYA HERBAL, THE HO NBLE SUPREME COURT HAS DIRECTED THE DEPARTMENT TO APPROACH THE HONBLE HIGH COURT FOR REVIEW OF ITS DECISION AND NOT TO APPLY INSTRUCTION NO. 3/2011 IPSO FACTO IN RESPECT OF APPEALS FILED BEFORE 9-2-2011, THE DA TE OF THE SAID INSTRUCTION. IT WAS, THEREFORE, SUBMITTED THAT IN VIEW OF THE CBDT INSTRUCTION NO. 03/2011 WHICH ARE APPLICABLE PROSPE CTIVELY, THE ORDER PASSED BY THE TRIBUNAL BE RECALLED OTHERWISE THE RE VENUE MAY BE PUT TO IRREPARABLE LOSS. 3. AT THE TIME OF HEARING, THE LD. D.R. SUBMITS THA T FOR THE REASONS AS MENTIONED IN THE MISC. APPLICATION FILED BY THE REV ENUE, THE ORDER PASSED BY THE TRIBUNAL BE RECALLED. 4. ON THE OTHER HAND, THE LD. COUNSEL FOR THE ASSES SEE WHILE RELYING ON THE ORDER OF THE TRIBUNAL SUBMITS THAT IT HAS BE EN HELD BY THE HONBLE MA NO. 41/MUM/2012 3 KARNATAKA HIGH COURT IN CIT VS. RANKA AND RANKA THA T THOUGH PARA NO. 11 OF INSTRUCTION NO. 3/2011 PROVIDES THAT THE REVI SED TAX LIMIT WILL APPLY ONLY TO FRESH APPEAL, THE SAME HAS TO BE HELD TO BE APPLICABLE TO PENDING APPEALS AS WELL. HE FURTHER SUBMITS THAT SIMILAR V IEW HAS BEEN TAKEN BY THE HONBLE DELHI HIGH COURT IN CIT VS. DELHI RACE CLUB LTD. HE FURTHER SUBMITS THAT A SIMILAR VIEW HAS BEEN ALSO TAKEN BY THE MUMBAI BENCH OF THE TRIBUNAL IN DY. CIT VS. SMT. KOKILABEN M. PATEL IN ITA NO. 4870/MUM/2010 FOR A.Y. 2002-03 DTD. 23-9-2011 AND I N CASE OF DY. CIT VS. PANKAJ M. PATEL IN ITA NO. 4872/MUM/2010 FOR A. Y. 2002-03 DTD. 28-12-2011. AS REGARD THE DECISION OF HONBLE SUPRE ME COURT IN SURYA HERBAL, HE SUBMITS THAT IT HAS BEEN HELD BY THEIR L ORDSHIPS THAT INSTRUCTION NO. 3 DTD. 9-2-2011 SHOULD NOT BE APPLI ED IPSO FACTO, PARTICULARLY WHEN THE MATTER HAS A CASCADING EFFECT . IN THE PRESENT CASE THERE IS NO CASCADING EFFECT, THEREFORE, THE SAID D ECISION IS NOT APPLICABLE TO THE FACTS OF THE ASSESSEES CASE. HE, THEREFORE , SUBMITS THAT THERE IS NO MISTAKE IN THE ORDER OF THE TRIBUNAL AND, THEREFORE , THE ORDER PASSED BY THE TRIBUNAL BE UPHELD. 5. WE HAVE CAREFULLY HEARD THE SUBMISSIONS OF THE R IVAL PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FIND T HAT THERE IS NO DISPUTE THAT IN THIS CASE THE PENALTY U/S 272A(2)(C)&K LEVI ED BY THE A.O. AMOUNTING TO RS. 2,26,400/- WAS DELETED BY THE LD. CIT(A). WE FURTHER FIND THAT THE TRIBUNAL HAS DISMISSED THE REVENUES APPEAL BY APPLYING MA NO. 41/MUM/2012 4 THE RECENT INSTRUCTION NO. 3/2011 DTD. 9-2-2011 AND THE DECISION OF HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CI T VS. MADHUKAR K. INAMDAR (HUF) (2009) 318 ITR 148 (BOM) WHEREIN IT H AS BEEN HELD THAT THE REVISED MONETARY LIMIT IN THE CIRCULAR DATED MA Y, 15, 2008 WOULD BE APPLICABLE FOR ALL PENDING APPEALS AND ALSO KEEPING IN VIEW THE CONSISTENT VIEW OF THE CO-ORDINATE BENCHES OF THE TRIBUNAL. 6. IN THE CASE OF CIT VS. SURYA HERBAL LTD. (2011) 202 TAXMAN 462 (SC) THEIR LORDSHIPS WHILE OBSERVING THAT THE INSTR UCTION NO. 3 DTD. 9-2- 2011 SHOULD NOT BE APPLIED IPSO FACTO, PARTICULARLY , WHEN THE MATTER HAS A CASCADING EFFECT GRANTED LIBERTY TO THE DEPARTMEN T TO MOVE THE HIGH COURT IN TWO WEEKS. HOWEVER, IN THE CASE BEFORE US , THE REVENUE HAS PLACED NO MATERIAL TO SHOW THAT THE ISSUE HAS CASCA DING EFFECT, WE ARE OF THE VIEW THAT THE SAID DECISION IS DISTINGUISHABLE AND NOT APPLICABLE TO THE FACTS OF THE PRESENT CASE. 7. HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. MADHUKAR K. INAMDAR (HUF) (2009) 318 ITR 148 (BOM), HAS HELD THAT THE REVISED MONETARY LIMIT IN THE CIRCULAR DATED MAY, 15, 2008 WOULD BE APPLICABLE FOR ALL PENDING APPEALS. 8. RECENTLY THE HONBLE JURISDICTIONAL HIGH COURT I N THE CASE OF CIT VS. SMT. VARSHA DILIP KOLHE IN TAX APPEAL NO. 7 OF 2010 DTD. 5-3-2012 MA NO. 41/MUM/2012 5 AFTER CONSIDERING THE INSTRUCTION NO. 3/2011 AND TH E DECISION OF THE HONBLE SUPREME COURT IN SURYA HERBAL LTD. (SUPRA) HAS HELD AS UNDER:- 2. INSTRUCTION NO.3 OF 2011 ISSUED BY THE CENTRAL BOARD OF DIRECT TAXES SAYS THAT THE APPEAL SHALL NOT BE FILED IN THE HIGH COURT UNDER SECTION 260A OF THE INCOME TAX ACT WHERE THE TAX EFFECT DOES NOT EXCEED A SUM OF RS.10 LACS. SINCE IN THE PRESENT APPEAL THE TAX EFFECT DOES NOT EXCEE D RS.10 LACS, THE APPEAL IS REQUIRED TO BE DISMISSED. 3. MR. SHARMA, LEARNED A.S.G. HOWEVER SUBMITS THAT THE APPEAL HAS BEEN FILED PRIOR TO THE ISSUANCE OF CIRCULAR DATED 9TH F EBRUARY, 2011, THEREFORE, THE CIRCULAR DOES NOT APPLY TO THE PRESENT CASE. IN THE CASE OF COMMISSIONER OF INCOME TAX V/S POLYCOTT CORPORATION [(2009) 138 IT R 144 (BOM)] A DIVISION BENCH OF THIS HIGH COURT, WHILE INTERPRETING SIMILA R INSTRUCTION NO.2 OF 2005, ISSUED BY THE CENTRAL BOARD OF DIRECT TAXES, REGARD ING THE EARLIER LIMIT FIXED FOR FILING APPEAL BEFORE THE HIGH COURT, HAS HELD THAT THE CIRCULAR WOULD HAVE A RETROSPECTIVE EFFECT. IN COMMISISONER OF INCOME TA X V/S SMT. VIJAYA V. KAVEKAR [TAX APPEAL NO.78 OF 2007 WITH TAX APPEAL NO.76 OF 2007], DECIDED ON 29TH JULY, 2011 [CORAM:SMT.NISHITA MHATRE & M.J. JOSHI, JJ] A DIVISION BENCH OF THIS COURT, WHILE INTERPRETING THE VERY CIRCULAR WHICH IS INVOLVED IN THIS APPEAL I.E. CIRCULAR NO.3 OF 2011, HAS HELD THAT THE CIRCU LAR HAS A RETROSPECTIVE OPERATION AND INSTRUCTIONS CONTAINED IN THE CIRCULAR WOULD AP PLY EVEN TO THE PENDING CASES. THEREFORE, THE CONTENTION OF MR. SHARMA THAT THE CI RCULAR DOES NOT APPLY TO THE PENDING CASES IS REJECTED. 4. MR. SHARMA THEN CONTENDED THAT THE APPEAL HAS A CASCADING EFFECT AND, THEREFORE, THE APPEAL SHOULD BE ENTERTAINED. IN SUP PORT, HE HAS RELIED UPON DECISION OF THE SUPREME COURT IN THE CASE OF C.I.T. CENTRAL III V/S SURYA HERBAL, LTD. DECIDED ON 29TH AUGUST, 2011. IN THAT CASE, THE SUP REME COURT OBSERVED: LIBERTY IS GIVEN TO THE DEPARTMENT TO MOVE THE HIG H COURT POINTING OUT THAT THE CIRCULAR DATED 9TH FEBRUARY, 2011, SHOULD NOT BE APPLIED IPSO FACTO, PARTICULARLY, WHEN THE MATTER H AS A CASCADING EFFECT. TAX ACT, 1961, IN WHICH A COMMON PRINCIPLE MAY BE INVOLVED IN SUBSEQUENT GROUP OF MATTERS OR LARGE NUMBER OF MATT ERS. IN OUR VIEW IN SUCH CASES, IF ATTENTION OF THE HIGH COURT IS DRAWN , THE HIGH COURT WILL NOT APPLY THE CIRCULAR IPSO FACTO. FOR THAT PURPOSE, LI BERTY IS GRANTED TO THE DEPARTMENT TO MOVE THE HIGH COURT IN TWO WEEKS. THE SPECIAL LEAVE PETITION IS, ACCORDINGLY DISPOSED OF. MA NO. 41/MUM/2012 6 5. WE HAVE CAREFULLY CONSIDERED THE FACTS OF THE PR ESENT CASE AND IN OUR VIEW THIS APPEAL DOES NOT INVOLVE ANY CASCADING EFFECT A ND IT IS NOT POINTED TO US THAT SEVERAL APPEALS ARISE THE POINT WHICH IS INVOLVED I N THIS APPEAL. 9. IN CIT VS. RANKA AND RANKA (2012) 206 TAXMAN 322 (KARNATAKA) THEIR LORDSHIPS AFTER CONSIDERING THE ISSUE IN DETA IL HAVE PASSED THE FOLLOWING ORDER (PAGE 341): ORDER (I) INSTRUCTION NO. 3/11 IS ALSO APPLICABLE TO THE PENDING APPEALS. (II) AS THE TAX EFFECT IN THE INSTANT CASE IS LESS THAN RS. 10 LAKHS, THE APPEAL STANDS DISMISSED ON THE GROUND OF MONETARY L IMIT, WITHOUT EXPRESSING ANY OPINION ON THE MERITS OF THE CLAIM, MAKING IT CLEAR THAT THE DEPARTMENT IS AT LIBERTY TO PROCEED AGAINST THE ASS ESSEE IN FUTURE, IF THERE ANY AMOUNT DUE FROM THE ASSESSEE, ON SIMILAR ISSUE AND IF IT IS ABOVE THE MONETARY LIMIT PRESCRIBED. 10. SIMILAR VIEW HAS BEEN TAKEN BY THE HONBLE DELH I HIGH COURT IN CIT VS. DELHI RACE CLUB LTD. IN ITA NO. 128/2008 DT D. 3-3-2011. 11. RECENTLY THIS BENCH OF THE TRIBUNAL IN THE CASE OF DY. CIT VS. M/S WALCHAND & CO. PVT. LTD. IN ITA NO. 6500/MUM/2010 F OR A.Y. 2001-02 DTD. 23-5-2012 HAS ALSO TAKEN THE SIMILAR VIEW. 12. RESPECTFULLY FOLLOWING THE ABOVE DECISIONS WHER EIN IT HAS BEEN CONSISTENTLY HELD THAT THE CBDT INSTRUCTION NO. 03/ 2011 DTD. 9-2-2011 WOULD APPLY EVEN TO PENDING APPEALS AND THE LD. D.R . AT THIS STAGE WAS UNABLE TO POINT OUT ANY CASCADING EFFECT, WE ARE OF THE VIEW THAT THERE IS NO MISTAKE IN THE ORDER OF THE TRIBUNAL AND, HENCE, THE TRIBUNAL HAS MA NO. 41/MUM/2012 7 RIGHTLY DISMISSED THE REVENUES APPEAL VIDE ORDER D TD. 27-7-2011 (SUPRA). THE MISC. APPLICATION FILED BY THE REVENUE IS, THER EFORE, REJECTED. 13. IN THE RESULT, THE MISC. APPLICATION FILED BY T HE REVENUE STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 15 TH JUNE, 2012. SD/- (N.K. BILLAIYA) ACCOUNTANT MEMBER SD/- (DINESH KUMAR AGARWAL) JUDICIAL MEMBER MUMBAI, DATED 15 TH JUNE, 2012. RK COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT (A) CONCERNED, MUMBAI 4. COMMISSIONER OF INCOME TAX- CONCERNED, MUMBAI 5. DEPARTMENTAL REPRESENTATIVE, BENCH C, MUMBAI //TRUE COPY// BY ORDER ASSTT. REGISTRAR, ITAT, MUMBAI