Dy.Commissioner of Income Tax, Circle-3(1)(1), Ahmedabad V. M/s.Prudent Corporate Advisory Service, Ahmedabad

MA 88/AHD/2015

• Counselvise Citation: [2018] 123 COUNSELVISE.COM (IT) 5642 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 2 month(s) 3 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 05-01-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2007-2008
• Appeal Filed On: 02-11-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL

Judgement Text

MA NO. 88/AHD/2012 DCIT VS. PRUDENT CORPORATE ADVISORY SERVICES LTD ASSESSMENT YEAR: 2007-08 PAGE 1 OF 3 IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, AHMEDABAD [ BEFORE SHRI PRAMOD KUMAR, ACCOUNTANT MEMBER ] MA NO. 88/AHD/2015 (ARISING OUT OF ITA NO. 1392/AHD/2010) ASSESSMENT YEAR : 2007-08 DCIT ...... APPLICANT CENTRAL CIRCLE 1(1), AHMEDABAD VS. M/S. PRUDENT CORPORATE ADVISORY SERVICE LTD., .................RESPONDENT 701, SEAS TOWER, GULBAI TEKRA ROAD, OFF. C.G. ROAD, AHMEDABAD [PAN : AADCP 1830 B] APPEARANCES BY: VK SINGH FOR THE APPLICANT MEHUL K PATEL FOR THE RESPONDENT DATE OF CONCLUDING THE HEARING : 05.01.2018 DATE OF PRONOUNCING THE ORDER : 05.01.2018 O R D E R 1. BY WAY OF THIS PETITION, THE APPLICANT STATES AS FOLLOWS:- 1. KINDLY REFER TO THE APPELLATE ORDER DATED 24/0 4/2015 IN ITA NO. 1392/ AHD/ 2010 IN THE CASE OF M/S. PRUDENT CORPORATE ADVISORY SERVICES LIMITED (PAN- AADCP1830A), 701, SEAS TOWER, GULBAI TEKRA, OFF C.G . ROAD, AHMEDABAD FOR THE ASSESSMENT YEAR 2007-08. 2. AS CAN BE SEEN FROM THE GROUNDS OF APPEAL, YOU A RE REQUESTED TO RECONSIDER THE MATTER ON MERIT IN LIGHT OF DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF CIT-VIII, NEW DELHI VS. SUMAN DHAMIJA IN APPEAL NUMBERS 4919-4920 OF 2015 (SC) WHEREIN IT WAS HELD THAT INSTRUCTION NO. 3/2011 DATED 09/02/2011 WILL GOVERN ONLY SUCH CASES WHICH HAVE BEEN FILED AFTER ISSUANCE OF THE AFORESAID. 3. IT IS THEREFORE REQUESTED, THAT THE ISSUE MAY K INDLY BE ADJUDICATED AND THE ADDITIONS MADE MAY KINDLY BE ADJUDICATED ON MERITS. COPIES OF ASSESSMENT ORDER, ORDER OF THE CIT(A) AND THE ORDER OF HON'BLE ITAT ARE ENCLOSED. 4. IN VIEW OF ABOVE, THIS MISCELLANEOUS APPLICATION IS BEING FILED TO DRAW ATTENTION OF THE HON'BLE ITAT IN THE ABOVE MATTER. 5. THIS MISCELLANEOUS APPLICATION IS BEING FILED W ITH THE PRIOR APPROVAL OF THE CIT, AHMEDABAD-LLL, AHMEDABAD VIDE HIS LETTER NO.PR .CIT-3/HQ (OSD) /260A/PCASL/2015-16 DATED 16/10/2015. MA NO. 88/AHD/2012 DCIT VS. PRUDENT CORPORATE ADVISORY SERVICES LTD ASSESSMENT YEAR: 2007-08 PAGE 2 OF 3 2. THE ISSUE, HOWEVER, IS NOW SQUARELY COVERED, AG AINST THE APPLICANT, BY HONBLE SUPREME COURTS JUDGMENT DATED 23.11.2017 I N THE CASE OF DIT VS. SRMB DAIRY FARMING PVT LTD [(2017) 87 TAXMANN.COM 288 (S C)] WHEREIN THEIR LORDSHIPS HAVE, INTER ALIA , OBSERVED AS FOLLOWS 18. THE VIEW ADOPTED BY THE DELHI HIGH COURT MAKIN G THE CIRCULAR APPLICABLE TO PENDING MATTERS CAME UP BEFORE A THREE JUDGE BEN CH OF THIS COURT IN CIT V. SURYA HERBAL LTD. [2013] 350 ITR 300/[201 1] 202 TAXMAN 462/14 TAXMANN.COM 142 (SC) WHEN THE FOLLOWING ORDER WAS P ASSED ON 29.8.2011: 'DELAY CONDONED. LIBERTY IS GIVEN TO THE DEPARTMENT TO MOVE THE HIGH COURT POINTING OUT THAT THE CIRCULAR DATED 9TH FEBRUARY, 2011, SHOULD NOT BE APPLIED IPSO FACTO, PARTICULARLY, WHEN THE MATTER HAS A CASCADIN G EFFECT. THERE ARE CASES UNDER THE INCOME TAX ACT, 1961, IN WHICH A CO MMON PRINCIPLE MAY BE INVOLVED IN SUBSEQUENT GROUP OF MATTERS OR L ARGE NUMBER OF MATTERS. IN OUR VIEW, IN SUCH CASES IF ATTENTION OF THE HIGH COURT IS DRAWN, THE HIGH COURT WILL NOT APPLY THE CIRCULAR I PSO FACTO. FOR THAT PURPOSE, LIBERTY IS GRANTED TO THE DEPARTMENT TO MO VE THE HIGH COURT IN TWO WEEKS. THE SPECIAL LEAVE PETITION IS, ACCORDING LY, DISPOSED OF.' 19. THE AFORESAID ORDER, IN OUR VIEW, ACTUALLY SHOU LD HAVE LAID THE CONTROVERSY TO REST. THE RETROSPECTIVE APPLICABILITY OF THE CIR CULAR DATED 9.2.2011 WAS NOT INTERFERED WITH, BUT WITH TWO CAVEATS (I) CIRCULA R SHOULD NOT BE APPLIED BY THE HIGH COURTS IPSO FACTO WHEN THE MATTER HAD A CASCAD ING EFFECT; (II) WHERE COMMON PRINCIPLES MAY BE INVOLVED IN SUBSEQUENT GRO UP OF MATTERS OR A LARGE NUMBER OF MATTERS. IT WAS OPINED THAT IN SUCH CASES , THE ATTENTION OF THE HIGH COURT WOULD BE DRAWN AND THE DEPARTMENT WAS EVEN GI VEN LIBERTY TO MOVE THE HIGH COURT IN TWO WEEKS. IN OUR VIEW THIS ORDER HOL DS THE FIELD AND SHOULD CONTINUE TO HOLD THE FIELD. 20. UNFORTUNATELY, THIS ORDER WAS NOT BROUGHT TO TH E NOTICE OF THE SUBSEQUENT TWO JUDGES BENCH OF THIS COURT IN CIT V. SUMAN DHAM IJA [2015] 60 TAXMANN.COM 460 (SC), AGAIN ARISING FROM A DELHI HI GH COURT ORDER, WHEREIN IT WAS SIMPLY STATED THAT SINCE THE APPEALS WERE PR EFERRED BEFORE 2011 AND THE INSTRUCTIONS WERE DATED 9.2.2011, THE EARLIER C ASES WOULD NOT BE COVERED BY THE INSTRUCTION. THIS ORDER IN TURN HAD BEEN FOL LOWED BY ANOTHER TWO JUDGES BENCH IN CIT V. GEMINI DISTILLERIES [2017] 87 TAXMA NN.COM 112 (SC). 21. ONCE AGAIN, IN ANOTHER MATTER CIT V. CENTURY PA RK [2015] 373 ITR 32/63 TAXMANN.COM 17/[2016] 236 TAXMAN 5 (SC) , THE LINE ADOPTED BY THE THREE JUDGES BENCH IN SURYA HERBAL LTD. CASE (SUPRA) HAS BEEN FOLLOWED. 22. WE HAVE ALREADY GIVEN OUR IMPRIMATUR TO THE OBS ERVATIONS MADE BY THE KARNATAKA HIGH COURT IN A DETAILED ANALYSIS IN RANK A & RANKA CASE (SUPRA), WHICH HAS DEALT WITH THE LITIGATION POLICY PHILOSOP HY BEHIND APPLYING THE CIRCULAR AND THE BENEFIT BEING EXTENDED IN VIEW THE REOF TO ALL ASSESSEES WHERE APPEALS HAVE BEEN PENDING, BUT BELOW THE FINA NCIAL LIMIT, AS OTHERWISE AN ANOMALOUS SITUATION WOULD ARISE. MA NO. 88/AHD/2012 DCIT VS. PRUDENT CORPORATE ADVISORY SERVICES LTD ASSESSMENT YEAR: 2007-08 PAGE 3 OF 3 23. WE MAY ALSO TAKE NOTE OF THE JUDGMENT OF THIS C OURT IN SUCHITRA COMPONENTS LTD. V. CCE 2007 TAXMANN.COM 1555 (SC) O N THE GENERAL PRINCIPLE OF APPLICATION OF CIRCULARS. RELIANCE WAS PLACED ON THE VIEW EXPRESSED IN CCE V. MYSORE ELECTRICALS INDUSTRIES L TD. [2008] 12 STT 25 (SC) OPINING THAT A BENEFICIAL CIRCULAR HAS TO BE A PPLIED RETROSPECTIVELY WHILE AN OPPRESSIVE CIRCULAR HAS TO BE APPLIED PROSPECTIV ELY. 24. WE ARE OF THE VIEW THAT THE MATTER NEEDS TO BE PUT TO REST AND A CLARITY BE OBTAINED IN VIEW OF THE IMPACT OF THIS ISSUE ON PEN DING CASES BEFORE THE HIGH COURTS AS WELL AS THE CASES WHICH HAVE BEEN DISPOSE D OF BY VARIOUS HIGH COURTS BY APPLYING THE CIRCULAR OF 2011 TO PENDING LITIGATIONS. IN OUR VIEW THE MATTER HAS BEEN SQUARELY PUT TO REST TAKING FURTHER CARE OF THE INTEREST OF THE REVENUE BY THE ORDER PASSED BY THE THREE JUDGES BEN CH OF THIS COURT IN SURYA HERBAL LTD. CASE (SUPRA), WHICH HAD PUT TW O CAVEATS EVEN TO THE RETROSPECTIVE APPLICATION OF THE CIRCULAR. THE SUBS EQUENT ORDERS HAVE BEEN PASSED BY THE TWO JUDGES BENCH WITHOUT THOSE ORDERS BEING BROUGHT TO THE NOTICE OF THE COURT, A DUTY WHICH WAS CAST ON THE D EPARTMENT TO HAVE DONE SO TO AVOID THE AMBIGUITY WHICH HAS ARISEN. THUS, THE SAID VIEW OF THE THREE JUDGES BENCH WOULD HOLD WATER AND THE CIRCULAR WOUL D APPLY EVEN TO PENDING MATTERS BUT SUBJECT TO THE TWO CAVEATS PROVIDED IN SURYA HERBAL LTD. CASE (SUPRA). 25. THE APPEALS OF THE REVENUE ARE, THUS, DISMISSED IN THE AFORESAID TERMS. 3. THE PLEA RAISED BY THE ASSESSING OFFICER IS THUS NO LONGER SUSTAINABLE IN LAW. 4. IN VIEW OF THE ABOVE DISCUSSIONS, THE RECTIFICAT ION PETITION IS DEVOID OF MERITS. WE, THEREFORE, REJECT THE SAME. 5. IN THE RESULT, THE PETITION IS DISMISSED. PRONOU NCED IN THE OPEN COURT TODAY ON THE 5 TH JANUARY, 2018. SD/- PRAMOD KUMAR (ACCOUNTANT M EMBER) AHMEDABAD, THE 5 TH DAY OF JANUARY, 2018 **BT COPIES TO: (1) THE APPELLANT (2) THE RESPONDENT (3) COMMISSIONER (4) CIT(A) (5) DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER TRUE COPY ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCHES, AHMEDABAD