DCIT, CC-III, Ludhiana V. Sh. Parshotam Aggarwal, Mandi Gobindgarh

MA 91/CHANDI/2017

• Counselvise Citation: [2017] 123 COUNSELVISE.COM (IT) 5609 (ITAT-CHANDIGARH)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 21-12-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2006-2007
• Appeal Filed On: 03-01-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANJIT SINGH
• Keywords: Tax effect

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH B, CHANDIGARH BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER AND MS. ANNAPURNA GUPTA, ACCOUNTANT MEMBER M.A.NO.91/CHD/2017 IN ITA NO.128/CHD/2014 (ASSESSMENT YEAR : 2006-07) DCIT, CENTRAL CIRCLE-III, VS. SH.PARSHOTAM AGGARWAL, LUDHIANA. GIRDHAR MARKET, MANDI GOBINDGARH. PAN: ABBPA0540P (APPELLANT) (RESPONDENT) APPLICANT BY : SHRI MANJIT SINGH, SR. DR RESPONDENT BY : SHRI ASHOK GOYAL DATE OF HEARING : 15.12.2017 DATE OF PRONOUNCEMENT : 21.12.2017 ORDER PER ANNAPURNA GUPTA, A.M . : THIS MISCELLANEOUS APPLICATION IS FILED BY THE REVENUE FOR RECALLING OF THE ORDER OF THE TRIBUNAL DATED 28.12.2015 RELATING TO ASSESSMENT YEAR 2006-07. 2. IT HAS BEEN PLEADED BY THE DEPARTMENT THAT THE A BOVE STATED APPEAL OF THE REVENUE WAS DISMISSED BY THE T RIBUNAL ON THE GROUND THAT THE TAX EFFECT IN THE APPEALS WA S LESS THAN RS.10 LACS AND AS PER CBDT CIRCULAR NO. 21/201 5 DATED 10.12.2015, THE APPEALS WHEREIN THE TAX EFFEC T DOES NOT EXCEED THE MONETARY LIMIT OF RS.10 LACS SHOULD NOT BE FILED BY THE DEPARTMENT. THE SAID INSTRUCTIONS OF T HE CBDT HAVE BEEN MADE APPLICABLE TO THE PENDING APPEALS AL SO. 3. NOW THE REVENUE HAS COME UP WITH THE PRESENT MISCELLANEOUS APPLICATION PLEADING THAT THE TAX INC LUDES 2 SURCHARGE AND EDUCATION CESS ALSO. THE FOLLOWING CALCULATION OF THE TAX EFFECT HAS BEEN GIVEN BY THE REVENUE. A YEAR 2006-07 ASSESSMENT YEAR INCOME TAX 2006-07 913190.00 223957.00 ADD; EDUCATIO CESS 4479.00 TOTAL TAX 224404.00 ADDITION U/S 153AVIDE ORDER DT 25-03-201 3 3078640.00 TAX 30% ON ADDITION AMOUNT 923592.00 ADD;SURCHARGE@10% 92359.00 TOTAL TAX INCLUDING SURCHARGE 1015951.00 ADD; EDUCATION CESS 20319.00 TOTAL TAX INCLUDING SURCHARGE AND EDUCATION CESS 1036270.00 TAX SLABS FOR THE A YEAR 2006-07 INCOME OF RS.100000.00 TAX NIL NEXT INCOME OF RS. 50000.00 TAX @ 10% NEXT INCOME OF RS. 100000.00 TAX @ 20% NEXT INCOME ABOVE RS.250000.00 TAX @ 30% SURCHARGE @10% ON INOCME EXCESS OF RS. 1000000.00 EDUCATION CESS @ 2% 4. IT HAS, THEREFORE, BEEN PLEADED THAT THE TOTAL T AX PAYABLE BY THE ASSESSEE INCLUDING EDUCATION CESS WAS MORE T HAN RS. 10 LACS. HENCE, CIRCULAR NO. 21/2015 DATED 10.12.2 015 OF THE CBDT WAS NOT APPLICABLE TO THIS APPEAL. 5. THE LD. AR OF THE ASSESSEE SHRI ASHOK GOYAL HAS PLACED ON RECORD COPY OF THE ORDER PASSED BY ITAT, DELHI BENCH IN M.A. NO.168/DEL/2016 WHEREIN THE TRIBUNAL HAS CONSIDERED A SIMILAR ISSUE. IT WAS POINTED OUT THEREFROM THAT THE TRIBUNAL HAD HELD THAT TAX WOULD NOT INC LUDE SURCHARGE & CESS. THE LD. COUNSEL FOR THE ASSESS EE FURTHER 3 CONTENDED THAT OTHERWISE ALSO, IT WAS A DEBATABLE ISSUE WHETHER SURCHARGE IS TO BE INCLUDED OR NOT WHICH DO ES NOT FALL WITHIN THE AMBIT OF APPARENT ERROR PROVIDED U/S 25 4(2) OF THE INCOME TAX ACT, 1961. RELIANCE IN THIS RESPECT HAS ALSO BEEN PLACED ON THE DECISION OF THE LUCKNOW BENCH OF THE TRIBUNAL IN THE CASE OF DCIT VS. YUVRAJ SINGH IN ITA NO.408 /LKW/2011 &CO NO.29/LKW/2011 DATED 23.12.2013 AND THE DECISI ON OF THE BOMBAY BENCH OF THE TRIBUNAL IN THE CASE OF DC IT VS. M/S DOME BELL ELECTRONICS INDIA LTD IN ITA NO. 2480/MUMBAI/2012 VIDE ORDER DATED 22.7.2016. 6. WE HAVE HEARD THE RIVAL CONTENTIONS. THE ISSUE W HETHER THE TAX INCLUDES SURCHARGE AND EDUCATION CESS ALSO HAS ALREADY BEEN SETTLED BY VARIOUS DECISIONS OF THE TR IBUNAL AND IT HAS TIME AND AGAIN BEEN HELD THAT THE DEFINITION OF TAX AS PROVIDED U/S 3(43) OF THE INCOME TAX ACT DOES NOT I NCLUDE SURCHARGE AND EDUCATION CESS FOR THE PURPOSE OF EXA MINING THE TAX EFFECT AS ENVISAGED IN CBDT CIRCULAR NO. 21/201 5 DATED 10.12.2015. THE ITAT, CHENNAI BENCH IN THE CASE OF ACIT VS. SHRI R. VISWANATHAN, MP NO.155/MDS /2011 ORDER DATED 23.9.2011, HAS MADE THE FOLLOWING OB SERVATIONS ON THIS SUBJECT:- 2. WE HAVE GONE THROUGH THE ORDER AND HEAR D THE RIVAL CONTENTIONS. TOTAL OF THE ADDITIONS WHICH WERE DELETED BY LD. CIT (APPEALS) IN T HIS CASE WAS RS.9,67,500/-. THIS TRIBUNAL BASED O N A FINDING THAT THE TAX EFFECT WAS LESS THAN RS. 3 LAKHS, APPLYING CIRCULAR NO.5 OF 2008 DATED 15.5.2008, HAD DISMISSED THE APPEAL OF THE REVENUE. NOW, AS PER LEARNED D.R., THE TAX EFFECT OF RS. 9,67,500/- WOULD BE RS.3,19,277/-. ACCORDING TO HIM, THIS AMOUNT WAS ARRIVED AT 4 BASED ON 30% TAX SLAB AGGREGATED WITH SURCHARGE OF 10% VIZ., RS.2,90,250/- AND RS.29,025/-RESPECTIVELY. 3. WE FIND THAT IN CLAUSE (4) OF INSTRUCTIO N NO.5 OF 2008 DATED 15 TH MAY, 2008 OF CBDT, TAX EFFECT IS DEFINED AS UNDER:- 4. FOR THIS PURPOSE, 'TAX EFFECT' MEANS THE DIFFERENCE BETWEEN THE TAX ON THE TOTAL INCOME ASSESSED AND THE TAX THAT WOULD HAVE BEEN CHARGEABLE HAD SUCH TOTAL INCOME BEEN REDUCED BY THE AMOUNT OF INCOME IN RESPECT OF THE ISSUE AGAINST WHICH APPEAL IS INTENDED TO BE FILED (HEREAFTER REFERRED TO AS 'DISPUTED ISSUES'). HOWEVER, THE TAX WILL NOT INCLUDE ANY INTEREST THEREON. SIMILARLY, IN LOSS CASES NOTIONAL TAX EFFECT SHOULD BE TAKEN INTO ACCOUNT. IN THE CASE OF PENALTY ORDERS, THE TAX EFFECT WILL MEAN QUANTUM OF PENALTY DELETED OR REDUCED IN THE ORDER TO BE APPEALED AGAINST.' NOTHING HAS BEEN MENTIONED IN THE ABOVE DEFINITION TO SHOW THAT TAX WILL INCLUDE SURC HARGE FOR THE PURPOSE OF APPLYING THE SAID CIRCULA R. NOW IF WE LOOK AT THE DEFINITION OF 'TAX' AS P ER SUB- SECTION (43) OF SECTION 2OF INCOME-TAX ACT, 1961, IT RUNS AS UNDER:- '(43) 'TAX' IN RELATION TO THE ASSESSMENT YEAR COMMENCING ON THE 1ST DAY OF APRIL, 1965, AND ANY SUBSEQUENT ASSESSMENT YEAR MEANS INCOME-TAX CHARGEABLE UNDER THE PROVISIONS OF THIS ACT, AND IN RELATION TO ANY OTHER ASSESSMENT YEAR INCOME-TAX AND SUPER- TAX CHARGEABLE UNDER THE PROVISIONS OF THIS ACT PRIOR TO THE AFORESAID DATE [AND IN RELATION TO THE ASSESSMENT YEAR COMMENCING ON THE 1ST DAY OF APRIL, 2006, AND ANY SUBSEQUENT ASSESSMENT YEAR INCLUDES THE FRINGE BENEFIT TAX PAYABLE UNDER SECTION 115WA]' IT IS CLEAR THAT TAX, AS PER THE ABOVE DEFINITION, WOULD INCLUDE SUPER-TAX AND ALSO FRINGE BENEFIT TAX BUT N OT SURCHARGE. ADMITTEDLY, HERE, THE TAX WAS ONLY RS. 2,90,250/-WHICH IS BELOW THE LIMIT OF RS.3 LAKHS 5 PRESCRIBED IN THE CIRCULAR FOR FILING APPEALS BE FORE THIS TRIBUNAL. RESULTANTLY, WE DO NOT FIND AN Y MISTAKE IN THE ORDER OF THIS TRIBUNAL MUCH LESS ANY MISTAKE APPARENT ON RECORD. 7. THERE IS NO DISPARITY ON FACTS. EVEN SIMILAR OBSERVATIONS HAVE BEEN MADE BY DELHI BENCH OF THE TRIBUNAL IN TH E CASE OF ACIT VS. M/S DALLAS FINANCE LTD (SUPRA) AND BY MU MBAI BENCH OF THE TRIBUNAL IN DCIT VS. M/S DOME BELL EL ECTRONICS INDIA LTD (SUPRA). RESPECTFULLY FOLLOWING DECISION S OF COORDINATE BENCHES OF THE TRIBUNAL, WE DO NOT FIND ANY APPARENT ERROR IN THE IMPUGNED ORDER, AND REJECT T HE MA OF THE REVENUE. 8. IN THE RESULT, THE MISCELLANEOUS APPLICATIONS FILED BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (SANJAY GARG) (ANNAPURNA GUPTA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 21 ST DECEMBER, 2017 *RATI* COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. THE CIT 5. THE DR ASSISTANT REGISTRAR, ITAT, CHANDIGARH