Assistant Commissioner of Income-tax, Pune V. Shri M N Navale, Pune

MA 78/PUN/2017

• Counselvise Citation: [2018] 124 COUNSELVISE.COM (IT) 6332 (ITAT-PUNE)
• Duration Of Justice: 4 month(s) 20 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 02-02-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 02-02-2018
• Assessment Year: 2005-2006
• Appeal Filed On: 12-09-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S N DOSHI
• Keywords: Maximum Marginal Rate; Tax effect

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, PUNE , , , BEFORE SHRI ANIL CHATURVEDI, AM AND SHRI VIKAS AWASTHY, JM . / MA NO.78/PUN/2017 (ARISING OUT OF ITA NOS.657 & 658/PUN/2015) / ASSESSMENT YEARS : 2005 - 06 & 2006 - 07 ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 2(2), PUNE ....... / APPELLANT / V/S. SHRI M.N. NAVALE, SINHAGAD TECHNICAL EDUCATION SOCIETY, VADGAON CAMPUS, VADGAON (BK) OF SINHAGAD ROAD, PUNE 411041 PAN : AAIPN0909R / RESPONDENT ASSESSEE BY : S/SHRI S.N. DOSHI & PIYUSH BAFNA REVENUE BY : SHRI AJAY MODI / DATE OF HEARING : 0 2 - 02 - 2018 / DATE OF PRONOUNCEMENT : 02 - 0 2 - 201 8 / ORDER PER VIKAS AWASTHY, JM : TH IS MISCELLANEOUS APPLICATION U/S. 254(2) O F THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT ) HAS BEEN FILED BY THE REVENUE SEEKING RECTIFICATION IN THE ORDER OF TRIBUNAL IN ITA NOS.657 & 2 MA NO. 78/PUN/2017 658/PUN/2015 DATED 15 - 03 - 2017 , WHEREBY THE APPEALS OF THE REVENUE ARE DISMISSED ON ACCOUNT OF LOW TAX EFFECT. 2. SHRI AJAY MODI REPRESENTING THE DEPARTMENT SUBMITTED THAT THE TRIBUNAL WHILE DETERMINING TAX EFFECT INVOLVED IN THE APPEALS HAS NOT TAKEN INTO CONSIDERATION SURCHARGE @ 10%. ON PERUSAL OF TAX RATES AS WERE APPLICABLE DURING THE ASSESSMENT YEARS UNDER APPEAL , SURCHARGE @ 10% IS APPLICABLE WHERE INCOME EXCEEDS RS.8,50,000/ - . IN THE ASSESSMENT YEARS UNDE R APPEAL THE INCOME IS MORE THAN RS.10,00,000/ - . AFTER TAKING INTO CONSIDERATION SURCHARGE, THE TOTAL TAX LIABILITY WORKS OUT TO RS.10,36,250/ - , WHICH IS MORE THAN THE LIMIT OF RS.10,00,000/ - SET BY CBDT VIDE CIRCULAR NO. 21/2015 FOR FILING APPEALS BEFORE THE TRIBUNAL BY DEPARTMENT. THE LD. DR PRAYED FOR RECALLING THE ORDER DATED 15 - 03 - 2017 AND HEAR THE APPEALS ON MERITS. 3. ON THE OTHER HAND SHRI S.N. DOSHI AND SHRI PIYUSH BAFNA APPEARING ON BEHALF OF THE ASSESSEE SUBMITTED THAT THE TAX EFFECT INVOLVE D IN ASSESSMENT YEAR 2005 - 06 IS RS.1,77,315/ - AND IN ASSESSMENT YEAR 2006 - 07 IS RS.9,51,287/ - , AT MAXIMUM MARGINAL RATE I.E. 30.9%. THE LD. AR CONTENDED THAT VARIOUS BENCHES OF THE TRIBUNAL HAVE BEEN CONSISTENTLY HOLDING THAT SURCHARGE AND EDUCATION C ESS ARE NOT INCLUDED IN THE DEFINITION OF TAX FOR THE PURPOSE OF EXAMINING TAX EFFECT AS ENVISAGED IN CIRCULAR NO. 21/2015 DATED 10 - 12 - 2015. THE LD. AR IN SUPPORT OF HIS SUBMISSIONS PLACED RELIANCE ON THE FOLLOWING DECISIONS : I . DCIT VS. M/S. DOME BELL E LECTRONICS INDIA LTD. IN ITA NO. 2480/MUM/2012 FOR ASSESSMENT YEAR 2007 - 08 DECIDED ON 22 - 07 - 2016; 3 MA NO. 78/PUN/2017 II . ACIT VS. M/S. DALLAS FINANCE LTD. IN ITA NO. 3946/DEL/2010 FOR ASSESSMENT YEAR 2007 - 08 DECIDED ON 07 - 04 - 2017; III . INCOME TAX OFFICER VS. P. PRASEN KUMAR IN ITA NO . 418/HYD/2014 FOR ASSESSMENT YEAR 2009 - 10. 4. BOTH SIDES HEARD. THE MISCELLANEOUS APPLICATION HAS BEEN FILED BY THE REVENUE FOR RECALLING THE ORDER OF TRIBUNAL DATED 15 - 03 - 2017 IN ITA NOS.657 & 658/PUN/2015 FOR THE REASON THAT WHILE DETERMINING TAX EFFE CT SURCHARGE HAS NOT BEEN INCLUDED. IF SURCHARGE IS INCLUDED, THE TAX EFFECT WOULD BE MORE THAN RS.10,00,000/ - . 5. ON THE OTHER HAND CONTENTION OF LD. AR IS , THAT THE DEFINITION OF TAX DOES NOT INCLUDE SURCHARGE AND/ OR EDUCATION CESS. WE FIND THAT MUMBAI BENCH OF THE TRIBUNAL HAS DEALT WITH THIS ISSUE. FOLLOWING THE DECISION OF CHENNAI BENCH OF THE TRIBUNAL IN THE CASE OF ACIT VS. SHRI R. VISWANATHAN IN ITA NO. 30/MDS/2011 DECIDED ON 23 - 09 - 2011, THE MUMBAI BENCH HELD : 3.3 WE HAVE ALSO GONE THROUGH SUB - SECTION (43) OF SECTION 2 WHICH DEFINES 'TAX'. THE PERUSAL OF THE DEFINITION SHOWS THAT WHATEVER WAS INTENDED TO BE INCLUDED IN TAX HAS BEEN MENTIONED THEREIN. WHEN THE LEGISLATURE HAS MENTIONED THE WORDS 'SUPER - TAX' AND 'FRINGE BENEFIT TAX', T HEN, IT COULD HAVE ALSO MENTIONED THE WORDS 'SURCHARGE' AND 'EDUCATION CESS' AS WELL, IF THERE WAS ANY INTENTION TO INCLUDE THEM IN THE WORD 'TAX'. THUS, WE RESPECTFULLY AGREE WITH THE DECISION TAKEN BY THE CHENNAI BENCH. IN OUR VIEW, SURCHARGE AND EDUCAT ION CESS SHALL NOT BE INCLUDE IN WORD 'TAX' FOR THE PURPOSE OF EXAMINING OF TAX EFFECT AS ENVISAGED IN CIRCULAR OF BOARD DT 10 TH DECEMBER 2015 NO.21/2015. THUS, THE TAX EFFECT BEING LESS THAN 10 LAKHS, IMPUGNED APPEAL FILED BY THE REVENUE IS NOT MAINTAINA BLE AND THEREFORE SAME IS HEREBY DISMISSED. OUR ORDER HAS NO EFFECT ON THE MERITS OF THIS CASE. 4 MA NO. 78/PUN/2017 6. SIMILAR VIEW HAS BEEN TAKEN BY THE HYDERABAD BENCH OF THE TRIBUNAL IN THE CASE OF INCOME TAX OFFICER VS. P. PRASEN KUMAR (SUPRA) AND DELHI BENCH OF THE TRIBUNAL IN THE CASE OF ACIT VS. M/S. DALLAS FINANCE LTD. (SUPRA). THE LD. DR HAS NOT BEEN ABLE TO CONTROVERT THE DECISIONS. NO CONTRARY DECISION OF HIGHER FORUM HAS BEEN BROUGHT TO OUR NOTICE . THUS, WE DO NOT FIND ANY MERIT IN THE MISCELLANEOUS APPLICATION FILED BY THE REVENUE. ACCORDINGLY, THE SAME IS DISMISSED. 7. IN THE RESULT, THE MISCELLANEOUS APPLICATION BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED ON FRIDAY, THE 02 ND DAY OF FEBRUARY, 201 8 . SD/ - SD/ - ( / ANIL CHATU RVEDI ) ( / VIKAS AWASTHY) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / PUNE; / DATED : 02 ND FEBRUARY, 2018 RK / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 12, PUNE 4. / THE CIT , CENTRAL, PUNE 5. , , , / DR, ITAT, B BENCH, PUNE. 6. / GUARD FILE. / / // TRUE COPY// / BY ORDER, / PRIVATE SECRETARY, , / ITAT, PUNE