DEPUTY COMMISSIONER OF INCOME TAX CENTRAL CIRCLE 7(4), MUMBAI V. WELL KNOWN TEXTILE INDUSTRIES PRIVATE LIMITED , MUMBAI

MA 746/MUM/2017

• Counselvise Citation: [2018] 124 COUNSELVISE.COM (IT) 6766 (ITAT-MUMBAI)
• Duration Of Justice: 9 month(s) 1 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 27-06-2018
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: H
• Assessment Year: 2012-2013
• Appeal Filed On: 25-09-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: M C OMI NINGSHEN
• Assessee Lawyers: JAY SHAH
• Keywords: Tax effect
• Section: 143(3); 153A; 14A; 115JB

Judgement Text

H IN THE INCOME TAX APPELLATE TRIBUNAL H BENCH, MUMBAI BEFORE SHRI C.N PRASAD, JUDICIAL MEMBER AND SHRI RAMIT KOCHAR, ACCOUNTANT MEMBER MA NO. 746/MUM/2017 ARISING OUT OF ITA NO. 5816/MUM/2016 ASSESSMENT YEAR 2012 - 13 DCIT, CENTRAL CIRCLE - 7(4) ROOM NO. 653, 6 TH FLOOR, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI - 400020 PAN AAACW0552A V. WELL KNOWN TEXTILE INDUSTRIES P. LTD., 14 TH FLOOR, NIRMAL BUILDING NARIMAN POINT, MUMBAI - 400059 APPLICANT RESPONDENT APPLICANT BY MR. M.C. OMI. NINGSHEN (DR) RESPONDENT BY SHRI JAY SHAH DATE OF HEARING : 11 - 05 - 2018 DATE OF PRONOUNCEMENT : 27 - 06 - 2018 ORDER PER RAMIT KOCHAR, ACCOUNTANT MEMBER THIS MISCELLANEOUS APPLICATION (HEREINAFTER CALLED THE MA) IN MA NO. 746/MUM/2017 ARISING OUT OF ITA NO. 5816/MUM/2916 FOR ASSESSMENT YEAR 2012 - 13 IS FILED BY R EVENUE SEEKING RECALL OF THE APPELLATE ORDER DATED 01.03.2017 PASSED BY T HE INCOME TAX APPELLATE TRIBUNAL, MUMBAI (HEREINAFTER CALLED THE TRIBUNAL ) IN ITA NO. 5816/MUM/20 16 FOR ASSESSMENT ORDER 2012 - 13 . THE M.A . FILED BY REVENUE SEEKING RECALLING OF THE APPELLATE ORDER DATED 01 - 03 - 2017 PASSED BY THE TRIBUNAL , READS AS UND ER: - IN THIS CONTEXT, IT IS SUBMITTED THAT THE REVENUE HAD FILED AN APPEAL BEFORE THE HON'BLE ITAT, MUMBAI FOR A.Y. 2012 - 13 IN APPEAL NO. 5816/MUM/2016, AGAINST THE ORDER OF CIT(A). THE HON'BLE ITAT, MUMBAI BENCHI MUMBAI VIDE THEIR ORDER DATED 01.03.2 017 HAS DISMISSED THE APPEAL. MA NO. 746/MUM/2017 ARISING OUT OF ITA NO. 5816/MUM/2016 2 2. ON A CAREFUL READING OF THE ORDER, IT IS FOUND THAT THE APPEAL HAS BEEN DISMISSED WITHOUT GOING INTO THE MERITS OF THE CASE, ON THE ASSUMPTION THAT THE APPEAL EFFECT IS LESS THAN THE PRESCRIBED LIMIT FOR FILLING OF APPEAL A S PER CBDT CIRCULAR NO.21/2015 DATED 10/12/2015. 3. IN THE ABOVE REFERRED ORDER OF ITAT, AS APPEAL HAS BEEN FILED TO HON'BLE ITAT BASED ON THE FACT THAT ON IDENTICAL ISSUE TAX EFFECT FOR A.Y.2013 - 14 AND A.Y.2014 - 15 EXCEEDS THE MONETARY LIMIT. THE CASE IS COVERED UNDER EXEMPTION OF CBDT CIRCULAR NO. 21/2015 DATED 10TH DECEMBER, 2015. THE TAX EFFECT FOR THE ASSESSMENT YEAR INVOLVED ARE AS UNDER A.Y.2012 - 13 - RS.7,90,202/ - , A.Y.2013 - 14 - RS. 14,07,869/ - , A.Y.2014 - 15 - RS.10,03,160/ - . SINCE THE TAX EFFECT FOR A .Y. 2013 - 14 AND 2014 - 15 IS ABOVE THE THRESHOLD LIMIT FOR FILING APPEAL BEFORE ITAT. THEREFORE FOLLOWING INSTRUCTION IN PARA NO. 5 OF CIRCULAR OF CBDT NO 21/2015 DATED 10.12.2015, WHERE IT HAS BEEN MENTIONED THAT IN A CONSOLIDATED ORDER FOR MORE THAN ONE A. Y., IF THE TAX EFFECT IS MORE THAN THE LIMIT AS MENTIONED IN THE CIRCULAR IN ANY OF THE A.Y.'S. THEN APPEAL CAN BE FILED IN ALL THE OTHER A.Y'S. 4. IN THE LIGHT OF THE ABOVE, THE HON'BLE ITAT IS REQUESTED TO RECALL ORDER IN THE INSTANT CASE AND TO CONSIDE R THE APPEAL ON MERIT. 2. IT IS THE CONTENTION OF THE LD. DR THAT THERE WAS A COMPOSITE APPELLATE ORDER PASSED BY LD. CIT(A) IN APPEAL NO. CIT(A) - 49/IT - 129,130,131/2015 - 16 VIDE APPELLATE ORDER DATED 12.07.2016 FOR ASSESSMENT YEAR (S) 2012 - 13, 2013 - 14 AND 2014 - 15 AND REVENUE HAS FILED AN APPEAL AGAINST LEARNED CIT(A) APPELLATE ORDERS IN ALL THE THREE ASSESSMENT YEARS. IT WAS SUBMITTED THAT IN THE ASSESSMENT YEAR 2013 - 14 THE TAX EFFECT WAS MORE THAN RS. 10,00,000/ - AND HENCE PARA 5 OF CBDT CIRCULAR NO. 21 /2015 IS TRIGGERED AND THE TRIBUNAL COULD NOT HAVE PASSED AN APPELLATE ORDER DATED 01 - 03 - 2017 FOR AY 2012 - 13 DISMISSING THE REVENUE APPEAL BASED ON LOW TAX EFFECT . THE LD. DR PRESENTED BEFORE US THE CHART WHEREIN TAX EFFECT IN ALL THE APPELLATE ORDER S PASS ED BY LEARNED CIT(A) GRANTING RELIEF TO THE ASSESSEE, IS PLACED AS UNDER: - MA NO. 746/MUM/2017 ARISING OUT OF ITA NO. 5816/MUM/2016 3 MISCELLANEOUS APPLICATION IN THE CASE OF WELLKNOWN TEXTILES INDUSTRIES PVT. LTD. AY ADDITION MADE BY AO RELIEF GIVEN BY CIT(A) TAX EFFECT REMARKS 2012 - 13 23,94,553/ - 20,30,345/ - 6,27,377/ - DISALLOWANCE MADE ON ACCOUNT OF SECTION 14A R.W.R. 8D 2013 - 14 42,66,271/ - 42,66,271/ - 13,18,277/ - DISALLOWANCE MADE ON ACCOUNT OF SECTION 14A R.W.R. 8D 2014 - 13 30,39,879/ - 29,82,699/ - 9,21,654/ - DISALLOWANCE MADE ON ACCOUNT OF SECTION 14A R.W.R. 8D ( THE CIT(A) HAD GIVEN THE RELIEF VIDE ORDER NO. CIT{A} - 49/IT - 129,130, 131/2015 - 16 DATED (COMBINED ORDER AY 201 2 - 13, 2013 - 14 AND 2014 - 15) IT IS THE CONTENTION OF THE LD. DR THAT THE ASSESSEE WAS ASSESSED BY LEARNED ASSESSING OFFICER(HEREINAFTER CALLED THE AO) U/S. 143(3) R.W.S. 153A FOR ASSESSMENT YEAR 2012 - 13 AND 2013 - 14 WHILE FOR ASSESSMENT YEAR 2014 - 15 THE ASSESSMENT WAS FRAMED BY THE AO U/S. 143(3). THUS IT WAS SUBMITTED THAT FOR ASSESSMENT YEAR 2012 - 13 AND 2013 - 14 , THE ASSESSMENT WAS FINALLY MADE U/S. 143(3) R.W.S. 153A AND NOT U/S. 115JB AS IS CONTENDED BY THE LEARNED COUNSEL FOR THE ASSESSEE BEFORE THE BENCH. THUS IT IS THE CONTENTION OF THE LD. DR THAT SINCE THE APPELLATE ORDER OF LEARNED CIT (A) DATED 12.07.2016 IS A COMPOSITE ORDER FOR ASSESSMENT YEAR 2012 - 13, 2013 - 14 AND 2014 - 15 AND THE TAX EFFECT IN THE CASE OF ASSESSMENT YEAR 2013 - 14 IS MORE THAN RS. 10,00 ,0 00/ - AND REVENUE HAS FILED APPEAL IN ALL THE THREE YEARS ASSESSMENT YEAR (S) I.E. AY 2012 - 13, 2013 - 14 AND 2014 - 15 , THE TRIBUNAL ERRED IN RELYING ON CIRCULAR NO. 21/2015 DATED 10 - 12 - 2015 ISSUED BY CBDT , WHILE PASSING ORDER DATED 01.03.2017 FOR AY 2012 - 13 DISMISSING THE APPEAL OF T HE R EVENUE ON THE GROUNDS OF LOW TAX EFFECT. THUS IT WAS SUBMITTED AND PRAYED THAT THE SAID APPELLATE ORDER DATED 01.03.2017 PASSED BY TRIBUNAL BE RECALLED AS PARA 5 OF CBDT CIRCULAR NO. 21/2015 D ATED 10 - 12 - 2015 CLEARLY ALLOWS R EVENUE TO FILE APPEALS FOR ALL THE YEARS EVEN IF THE TAX EFFECT IS LOWER THAN THE MA NO. 746/MUM/2017 ARISING OUT OF ITA NO. 5816/MUM/2016 4 T HRESHOLD LIMITS FOR SOME OF THE YEARS IN THE CASE OF COMPOSITE APPELLATE ORDERS PROVIDED WHEREIN ATLEAST IN ONE YEAR THE TAX EFFECT IS MORE THAN THE THRESHOLD TAX EFFECT LIMITS PROVIDED VIDE AFORESAID CBDT CIRCULAR . 3. ON THE OTHER HAND LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT TRIBUNAL HAS ALREADY DISMISSED THE APPEAL OF THE REVENUE IN QUANTUM ON MERITS FOR THE ASSESSMENT YEAR 2013 - 14 AND 2014 - 15 VIDE COMMON ORDER DATED 13.12.2017 IN ITA NO. 5815/M UM/2016 FOR ASSESSMENT YEAR 2013 - 14 AND ITA NO. 5814/ MUM/2016 FOR AY 2014 - 15 . HENCE IT WAS PRAYED BY LEARNED COUNSEL FOR THE ASSESSEE THAT THIS EXERCISE OF RECALLING OF THE TRIBUNALS ORDER DATED 01 - 03 - 2017 AS PRAYED IN THIS MA FOR AY 2012 - 13 IS MERELY AN ACADEMIC EXERCISE AND HENCE THE MA FILED BY R EVENUE B E DISMISSED. THE LD. COUNSEL FOR THE ASSESSEE DURING THE COURSE OF HEARING MADE FEEBLE ATTEMPT TO STRESS HIS POINT THAT THE ASSESSMENTS WERE FRAME D BY THE AO U/S. 1 15JB WHEREIN THE TAX HAVE BEEN LEVIED ON BOOK PROFIT WHICH IS ALREADY BEEN COUNTERED BY REVENUE BY FILING A CHART OF CRUX OF ASSESSMENT AS WELL BY FILING COPIES OF SEPARATE ASSESSMENT ORDERS DATED 01.04.2015 FOR ASSESSMENT YEAR S 2013 - 14 AND 2014 - 15. 4. WE HAVE CONSIDERED RIVAL CONTENTION AND PERUSED THE MATERIAL ON RECORD . W E HAVE OBSERV ED THAT R EVENUE FILED AN APPEAL IN ITA NO. 5816/MUM/2016 FOR ASSESSMENT YEAR 2012 - 13 WHICH WAS FILED AGAINST COMMON ORDER DATED 12.07.2016 PASSED BY LD. CIT(A) FOR AY 2012 - 13, 2013 - 14 AND 2014 - 15 . IT IS DEMONSTRATED BEFORE THE BENCH THAT SEPARATE APPEALS WERE FILED BY R EVENUE WITH TRIBUNAL FOR ASSESSMENT YEAR (S) 2013 - 14 AND 2014 - 15 ALSO . T HERE WERE COMMON GROUNDS FOR FILING THE APPEAL BEFORE THE TRIBUNAL BY R EVENUE FOR ALL THESE ASSESSMENT YEARS NAMELY AY 2012 - 13, 2013 - 14 AND 2014 - 15 . THE TRIBUNAL WHILE P ASSING ORDERS IN APPEAL FOR AY 2012 - 13 IN ITA NO. MA NO. 746/MUM/2017 ARISING OUT OF ITA NO. 5816/MUM/2016 5 5816/MUM/2016 DISMISS ED THE APPEAL OF THE REVENUE FOR AY 201 2 - 13 ON THE GROUND OF LOW TAX EFFECT RELYING UPON CBDT CIRCULAR NO. 21/2015 DATED 10 - 12 - 2015 . WE HAVE NOW OBSERVED AS BROUGHT ON RECORD BY LD. D R BEFORE THE BENCH THAT FOR ASSESSMENT YEAR 2013 - 14 , THE TAX EFFECT WAS ABOVE THE THRESHOLD LIMIT OF RS. 10,000,00/ - AND CBDT CIRCULAR NO. 21/2015 DATED 10.12.2015 WAS NOT APPLICABLE KEEPING IN VIEW PARA NO. 5 OF THE SAID CIRCULAR WHICH IS REPRODUCED HERE UNDER: - 5. THE ASSESSING OFFICER SHALL CALCULATE THE TAX EFFECT SEPARATELY FOR EVERY ASSESSMENT YEAR IN RESPECT OF THE DISPUTED ISSUES IN THE CASE OF EVERY ASSESSEE. IF, IN THE CASE OF AN ASSESSEE, THE DISPUTED ISSUES ARISE IN MORE THAN ONE ASSESSMENT YEAR, APPEAL, C AN BE FILED IN RESPECT OF SUCH ASSESSMENT YEAR OR YEARS IN WHICH THE TAX EFFECT IN RESPECT OF THE DISPUTED ISSUES EXCEEDS THE MONETARY LIMIT SPECIFIED IN PARA 3. NO APPEAL SHALL BE FILED IN RESPECT OF AN ASSESSMENT YEAR OR YEARS IN WHICH THE TAX EFFECT IS LESS THAN THE MONETARY LIMIT SPECIFIED IN PARA 3. IN OTHER WORDS, HENCEFORTH, APPEALS CAN BE FILED ONLY WITH REFERENCE TO THE TAX EFFECT IN THE RELEVANT ASSESSMENT YEAR. HOWEVER, IN CASE OF A COMPOSITE ORDER OF ANY HIGH COURT OR APPELLATE AUTHORITY, WHICH INVOLVES MORE THAN ONE ASSESSMENT YEAR AND COMMON ISSUES IN MORE THAN ONE ASSESSMENT YEAR, APPEAL SHALL BE FILED IN RESPECT OF ALL SUCH ASSESSMENT YEARS EVEN IF THE TAX EFFECT IS LESS THAN THE PRESCRIBED MONETARY LIMITS IN ANY OF THE YEAR(S), IF IT IS DE CIDED TO FILE APPEAL IN RESPECT OF THE YEAR(S) IN WHICH TAX EFFECT EXCEEDS THE MONETARY LIMIT PRESCRIBED. IN CASE WHERE A COMPOSITE ORDER/ JUDGEMENT INVOLVES MORE THAN ONE ASSESSEE, EACH ASSESSEE SHALL BE DEALT WITH SEPARATELY. WE HAVE ALSO OBSERVED TH AT LD. DR CONCLUSIVELY PROVED THAT TAX EFFECT FOR ASSESSMENT YEAR 2013 - 14 WAS MORE THAN RS. 10,000,00/ - AND THE COMPOSITE ORDER WAS PASSED BY THE LD. CIT(A) FOR AY 2012 - 13, 2013 - 14 AND 2014 - 15 . I T IS ALSO CONCLUSIVELY PROVED BY LD. DR THAT REVENUE HAS FIL ED AN APPEAL WITH TRIBUNAL FOR ASSESSMENT YEAR 2013 - 14 AND 2014 - 15 ALSO VIDE ITA NO. 5815/MUM/2016 AND 5814/MUM / 2016 AND HENCE KEEPING IN VIEW PARA 5 OF THE CBDT CIRCULAR DATED MA NO. 746/MUM/2017 ARISING OUT OF ITA NO. 5816/MUM/2016 6 10.12.2015 , WE HOLD THAT THE TRIBUNAL COULD NOT HAVE DISMISSED THE APPEAL OF R EVENUE FOR ASSESSMENT YEAR 2012 - 13 IN ITA NO. 5816/MUM/2016 AND IT WAS A MISTAKE APPARENT FROM RECORD WHICH NEED TO BE CORRECTED WITHIN THE MANDATE OF PROVISIONS OF SECTION 254(2) OF THE 1961 ACT AND IN VIEW OF THE SAME , SAID ORDER DATED 01 - 03 - 2017 VIDE A PPEAL IN ITA NO. 5816/MUM/2016 NEED TO BE RECALL ED AND HENCE WE HE R E BY ORDER RECALLING OF THE SAID ORDER DATED 01 - 03 - 2017 PASSED BY THE TRIBUNAL FOR AY 2012 - 13 IN ITA NO. 5816/MUM/2016 . WE DIRECT THE REGISTRY TO PLACE THE S AID APPEAL FILED BY THE REVENUE BEFORE THE REGULAR B ENCH FOR HEARING IN DUE COURSE OF TIME FOR WHICH NECESSARY NOTICES BE ISSUED TO BOTH THE PARTIES . W E HAVE ALSO NOTED THAT TRIBUNAL FOR ASSESSMENT YEAR 2013 - 14 AND 2014 - 15 HAS PASSED COMPOSITE ORDER D ATED 13 - 12 - 2017 IN ITA NO. 5815/MUM/2016 AND 5814/MUM/2015 DISMISSING THE APPEAL OF THE REVENUE FOR BOTH THE YEARS . HOWEVER, THE ISSUES IN THIS APPEAL INVOLVED MIXED QUESTION OF FACTS AND LAW , BOTH THE PARTIES ARE DIRECTED TO PLACE ON RECORD ALL T HE NEC ESSARY FACTS BEFORE THE REGULAR BENCH AT THE TIME OF HEARING TO JUSTIFY THEIR STANDS ON MERITS IN ACCORDANCE WITH LAW . WE ORDER ACCORDINGLY. 5 . IN THE RESULT , MA FILED BY THE R EVENUE IN MA NO. 746/MUM/2017 ARISING FROM ITA NO. 5816/MUM/2016 IS ALLOWED AS INDICATED ABOVE. ORDER PRONOUNCED IN THE OPEN COURT ON 2 7 .06.2018 2 7 .0 6 .2018 S D / - S D / - (C.N PRASAD) (RAMIT KOCHAR) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED: 2 7 .0 6 .2018 COPY TO MA NO. 746/MUM/2017 ARISING OUT OF ITA NO. 5816/MUM/2016 7 NISHANT VERMA SR. PRIVATE SECRETARY 1 . THE APPELLANT 2 . THE RESPONDENT 3 . THE CIT(A) CONCERNED, MUMBAI 4 . THE CIT - CONCERNED, MUMBAI 5 . THE DR BENCH, 6 . MASTER FILE // TUE COPY// BY ORDER DY/ASSTT. REGISTRAR ITAT, MUMBAI