INCOME TAX OFFICER 9(2)(2), MUMBAI V. CANBARA CONSTRUCTION PRIVATE .LIMITED, MUMBAI

MA 95/MUM/2017

• Counselvise Citation: [2018] 124 COUNSELVISE.COM (IT) 6765 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 3 month(s) 29 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 27-06-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2006-2007
• Appeal Filed On: 28-02-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V JUSTIN
• Keywords: Audit objection; Tax effect
• Section: 147

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY, JUDICIAL MEMBER AND SHRI G. MANJUNATHA, ACCOUNTANT MEMBER M.A NO. 95 /MUM./2017 ARISING OUT OF ITA NO. 2597 /MUM./2014 ASSESSMENT YEAR : 20 06 07 ) INCOME TAX OFFICER WARD 9(2)(2), MUMBAI . APPL IC ANT V/S M/S. CANBARA CONSTRUCTION PVT. LTD. C/O SHOP NO.1, 2 & 3, NATRAJ CHS LTD. VILE PARLE (W), MUMBAI 400 056 PAN AABCC6892L . RESPONDENT ASSESSEEBY : SHR I VIJAY MEHTA A/W SHRI GOVINDJHAVERI REVENUE BY : SHRI V. JUSTIN DATE OF HEARING 06 . 04.2018 DATE OF ORDER 27.06.2018 ORDER PER SAKTIJIT DEY, J.M. B Y WAY OF THIS MISC. APPLICATION , PURPORTEDLY FILED UNDER SECTION 254(2) OF THE INCOME TAX ACT, 1961 (FOR SHORT THE ACT ), THE REVENUE SEEKS RECTIFICATION / RECALL OF ORDER DATED 17 TH FEBRUARY 2016, PASSED IN ITA NO.2597/MUM./ 2014, FOR THE ASSESSMENT YEAR 2006 07. 2 . AS STATED IN THE MISC. APPLICATION AND ALSO SUBMITTED BY THE LEARNED DEPARTMENTAL REPRESENTATIVE, THOUGH, THE REVENUES APPEAL WAS DISMISSED DUE TO LOW TAX EFFECT AS PER CBDT CIRCULAR NO.21/2015, 2 M/S. CANBARA CONSTRUCTION PVT. LTD. DATED 20 TH DECEMBER 2015, HOWEVER, ON THE BASIS OF THE VERY SAME CIRC ULAR, THE DEPARTMENTS APPEAL WAS REQUIRED TO BE DECIDED ON MERIT AS THE ASSESSMENT WAS ON THE BASIS OF REVENUE AUDIT OBJECTION ACCEPTED BY THE DEPARTMENT, HENCE, COMES WITHIN THE EXCEPTION PROVIDED UNDER PARA 8 OF CBDT CIRCULAR NO.21/2015, DATED 10 TH DECE MBER 2015. 3 . THE LEARNED DEPARTMENTAL REPRESENTATIVE SUBMITTED , THE APPEAL SHOULD NOT HAVE BEEN DISMISSED FOR THE REASON OF LOW TAX EFFECT BUT SHOULD HAVE BEEN DECIDED ON MERIT. 4 . THE LEARNED AUTHORISED REPRESENTATIVE STRONGLY OPPOSING THE SUBMISSIONS MADE ON BEHALF OF THE DEPARTMENT SUBMITTED THAT ON THE BASIS OF SUBMISSIONS MADE BY THE DEPARTMENTAL REPRESENTATIVE THAT DUE TO LOW TAX EFFECT REVENUES APPEAL HAS TO BE DISMISSED AS PER CBDT CIRCULAR NO.21/2015, THE TRIBUNAL WITHOUT DECIDING THE ISSUE IN MERI T DISMISSED THE APPEAL OF THE DEPARTMENT. THAT BEING THE CASE, THERE IS NO MISTAKE APPARENT ON RECORD. HE SUBMITTED , IN THE COURSE OF APPEAL HEARING, THE LEARNED DEPARTMENTAL REPRESENTATIVE DID NOT MAKE ANY SUBMISSION THAT THE ISSUE RAISED IN THE APPEAL HA S TO BE CONTESTED ON MERIT , SINCE , THE ASSESSMENT WAS ON THE BASIS OF REVENUE AUDIT OBJECTION, THEREFORE, COMES WITHIN THE EXCEPTION PROVIDED UNDER THE CBDT CIRCULAR NO.21/2015. THUS, HE SUBMITTED , THERE IS NO MERIT IN THE APPLICATION FILED BY THE REVENUE. 3 M/S. CANBARA CONSTRUCTION PVT. LTD. 5 . WITHOUT PREJUDICE TO THE AFORESAID SUBMISSIONS, THE LEARNED AUTHORISED REPRESENTATIVE SUBMITTED , EVEN ACCEPTING THE CONTENTION OF THE DEPARTMENT THAT THE DISPUTED ISSUE AROSE ON THE BASIS OF REVENUE AUDIT OBJECTION, HOWEVER, THAT BY ITSELF W OULD NOT MAKE THE CBDT CIRCULAR NO.21/2015, INAPPLICABLE TO THE PRESENT APPEAL. HE SUBMITTED , EVEN IN RESPECT OF EXCEPTIONS PROVIDED UNDER PARA 8 OF CBDT CIRCULAR NO.21/2015, IT HAS BEEN MADE CLEAR THAT THE ISSUE SHOULD BE CONTESTED ON MERIT NOTWITHSTANDING THE TAX E FFECT. THE LEARNED AUTHORISED REPRESENTATIVE SUBMITTED , THE EXPRESSION CONTESTED ON MERIT AS EMPLOYED IN PARA 8 OF CBDT CIRCULAR NO.21/2015, WAS CLARIFIED IN CBDT CIRCULAR NO.5/2017, DATED 23 RD JANUARY 2017, BY STATING THAT THE DIRECTION TO CONTEST ON M ERIT DOES NOT MEAN MECHANICAL FILING OF APPEALS. HE SUBMITTED , THE C B DT BEING CONSCIOUS OF THE FACT THAT THE EXCEPTION PROVIDED IN PARA 8(C) OF CIRCULAR NO.21/2015, IS BEING ERRONEOUSLY INTERPRETED AND APPEALS ARE BEING MECHANICALLY FILED BY THE REVENUE W ITHOUT PROPE R EXAMINATION OF CASE ON MERITS ,T HE BOARD IN THE AFORESAID CIRCULAR HAS MADE IT CLEAR THAT APPEAL S SHOULD NOT BE FILED BY THE DEPARTMENT IN VIOLAT I ON OF INST R UCTIONS MENTIONED IN THESE CIRCULARS. IT WAS ALSO MADE CLEAR THAT APPEALS WHICH HAVE B EEN FILED IN VIOLATION OF THE INSTRUCTIONS MAY BE WITHDRAWN . THUS, HE SUBMITTED, MERELY BECAUSE THE DEPARTMENT HAS ACCEPTED THE REVENUE AUDIT OBJECTION , IT CANNOT FILE THE APPEAL 4 M/S. CANBARA CONSTRUCTION PVT. LTD. MECHANICALLY IF THERE IS NO MERIT IN THE APPEAL. HE SUBMITTED , THE REVENUE HA S NOT DEMONSTRATED WHETHER THE APPEAL WAS FILED ON MERITS IN COMPLIANCE TO INSTRUCTIONS ISSUED IN CBDT CIRCULAR NO.21/2015, AND 5/2017. THEREFORE, HE SUBMITTED , TH E MISC. APPLICATION FILED BY THE DEPARTMENT SHOULD BE DISMISSED. 6 . WE HAVE CONSIDERED RIVAL SU BMISSIONS AND PERUSED MATERIALS ON RECORD. BEFORE WE PROCEED TO EXAMINE THE MERITS OF THE PRESENT APPLICATION FILED BY THE DEPARTMENT, WE THOUGHT IT APPROPRIATE TO DEAL WITH CERTAIN FALLACIOUS STATEMENT S MADE IN THE MISC. APPLICATION. AS COULD BE SEEN FROM PARA 4.1 AND 4.2 OF THE PRESENT APPLICATION, A STATEMENT HAS BEEN MADE THAT THE APPEAL ORDER PASSED BY THE TRIBUNAL IS ERRONEOUS , SINCE , THE TRIBUNAL HAS NOT EXAMINED THE MERIT OF THE ISSUE INVOLVED AND DECIDED THE APPEAL MERELY ON T HE BASIS OF TAX EFFECT BY RELYING UPON CBDT CIRCULAR NO.21/2015, DATED 10 TH DECEMBER 2015. IN THIS CONTEXT, IT NEEDS TO BE MENTIONED , A READING OF THE APPEAL ORDER DATED 17THE FEBRUARY 2016 PASSED BY THE TRIBUNAL WOULD MAKE IT AMPLY CLEAR THAT ON THE SPECI FIC SUBMISSIONS OF THE LEARNED DEPARTMENTAL REPRESENTATIVE THAT TAX EFFECT ON THE AMOUNT DISPUTED BY THE DEPARTMENT IS LESS THAN ` 10 LAKH, HENCE, COVERED BY CBDT CIRCULAR NO.21/2015, THE TRIBUNAL DISMISSED THE APPEAL OF THE DEPARTMENT W ITHOUT DECIDING THE ISSUES ON MERIT. THIS FACT HAS BEEN CLEARLY CAPTURED IN PARA 2 OF THE APPEAL ORDER. THEREFORE, THE 5 M/S. CANBARA CONSTRUCTION PVT. LTD. ALLEGATION THAT THE TRIBUNAL WITHOUT DECIDING THE APPEAL ON MERIT HAS DISMISSED IT ON THE BASIS OF TAX EFFECT IS WHOLLY MISCONCEIVED AND CONTRARY TO THE FAC TS ON RECORD. IN THE MISC. APPLICATION THE REVENUE HAS FURTHER STATED THAT THE APPEAL COULD NOT HAVE BEEN DISMISSED ON THE BASIS OF LOW TAX EFFECT , SINCE , THE ASSESSMENT WAS MADE ON THE BASIS OF REVENUE AUDIT OBJECTION , HENCE, IT COMES WITHIN THE EXCEPTION PROVIDED IN PARA 8 OF CBDT CIRCULAR NO.21/2015. HOWEVER, IN COURSE OF HEARING OF APPEAL, THERE WAS NOT EVEN A WHISPER BY THE LEARNED DEPARTMENTAL REPRESENTATIVE THAT THE ASSESSMENT MADE WAS ON THE BASIS OF REVENUE AUDIT OBJECTION, HENCE, THE CASE FALLS WI THIN THE EXCEPTION PROVIDED IN PARA 8(C) OF CBDT CIRCULAR NO.21/2015. FURTHER, NEITHER THE ASSESSMENT ORDER NOR THE AUTHORIZATION MEMO DATED 16 TH APRIL 2014 OF LEARNED COMMISSIONER 8, MUMBAI, AUTHORIZING FILING OF THE IMPUGNED APPEAL KEPT ON RECORD , NOWHER E MENTION THAT THE ASSESSMENT ORDER PASSED WAS ON THE BASIS OF REVENUE AUDIT OBJECTION. THEREFORE, IN THE ABSENCE OF ANY SUBMISSION MADE BY LEARNED DEPARTMENTAL REPRESENTATIVE AND ANY MATERIAL PLACED BEFORE THE BENCH THAT THE SUBJECT MATTER OF DISPUTE WAS AS A RESULT OF REVENUE AUDIT OBJECTION , THE TRIBUNAL COULD NOT HAVE VISUALIZED THAT THE APPEAL FILED BY THE REVENUE COMES WITHIN THE EXCEPTION PROVIDED IN PARA 8(C) OF CBDT CIRCULAR NO.21/2015. THEREFORE, IN THE AFORESAID CIRCUMSTANCES, WHEN THE LEARNED DEPARTMENTAL REPRESENTATIVE HAS HIMSELF SUBMITTED THAT DUE TO LOW TAX EFFECT THE APPEAL WAS NOT 6 M/S. CANBARA CONSTRUCTION PVT. LTD. MAINTAINABLE AS PER CBDT CIRCULAR NO.21/2015 AND FURTHER , IT WAS NOT BROUGHT TO THE NOTICE OF THE TRIBUNAL THAT THE CASE FALLS WITHIN THE EXCEPTION PROVIDED UN DER SECTION 8(C) OF THE CIRCULAR NO.21/2015, IT IS ABSOLUTELY UNFAIR AND UNJUST ON THE PART OF THE DEPARTMENT TO ALLEGE THAT THE TRIBUNAL FAILED TO DECIDE THE ISSUE ON MERIT, HENCE, THERE IS MISTAKE APPARENT ON THE FACE OF RECORD. WHETHER IN A PARTICULAR C ASE THERE IS REVENUE AUDIT OBJECTION OR NOT IS COMPLETELY WITHIN THE KNOWLEDGE OF THE DEPARTMENT. THE TRIBUNAL BEING THE SECOND APPELLATE AUTHORITY CERTAINLY CANNOT BE EXPECTED TO KNOW THE EXISTENCE OF REVENUE AUDIT OBJECTION, UNLESS, SUCH FACT IS BROUGHT TO ITS NOTICE BY THE DEPARTMENT. FOR I TS OWN LAPSES IN BRINGING CERTAIN FACTS TO THE NOTICE OF THE TRIBUNAL IN COURSE OF APPEAL HEARING, THE DEPARTMENT CERTAINLY CANNOT PUT THE BLAME ON THE TRIBUNAL. FOR THE AFORESTATED REASONS, THE PRESENT APPLICATION F ILED BY THE REVENUE BEING DEVOID OF MERIT DESERVES TO BE DISMISSED. 7 . HAVING HELD SO, IT IS NECESSARY TO EXAMINE WHETHER THE APPEAL FILED BY THE REVENUE REALLY COMES WITHIN THE EXCEPTION PROVIDED IN PARA 8 OF CBDT CIRCULAR NO.21/2015. IT IS WELL KNOWN THAT ON 10 TH DECEMBER 2015, THE CBDT ISSUED CIRCULAR NO.21/2015, REVISING THE MON E T A RY LIMIT FOR FILING OF APPEALS BY THE DEPARTMENT BEFORE THE INCOME TAX APPELLATE TRIBUNAL, HIGH COURT AND SUPREME COURT. INSOFAR AS INCOME TAX APPELLATE TRIBUNAL IS CONCERNED, AS PER THE AFORESAID 7 M/S. CANBARA CONSTRUCTION PVT. LTD. CIRCULAR, APPEALS HAVING TAX EFFECT BELOW ` 10 LAKH ARE NOT TO BE FILED. PARA 10 OF THE AFORESAID CIRCULAR ALSO MADE IT CLEAR THAT THE MON E T A RY LIMIT FIXED IN THE AFORESAID CIRCULAR WILL APPLY RETROSPECTIVELY TO PENDING APPEALS AS WELL AS APPEALS TO BE FILED. IT WAS FURTHER MADE CLEAR, PENDING APPEALS BELOW THE SPECIFIED TAX LIMIT MAY BE WITHDRAWN / NOT PRESSED. HOWEVER, PARA 8 OF THE SAID CIRCULAR SET OUT EXCEPTIONS REGARDING APPLICABILITY OF THE MONETARY LIMIT IN CERTAIN TYPES OF CASE S. AT THIS JUNCTURE, IT IS NECESSARY TO LOOK AT SUCH EXCEPTIONS WHICH ARE REPRODUCED HEREUNDER: 8. ADVERSE JUDGMENTS RELATING TO THE FOLLOWING ISSUES SHOULD BE CONTESTED ON MERITS NOTWITHSTANDING THAT THE TAX EFFECT ENTAILED IS LESS THAN THE MONETARY L IMITS SPECIFIED IN PARA 3 ABOVE OR THERE IS NO TAX EFFECT: ( A ) WHERE THE CONSTITUTIONAL VALIDITY OF THE PROVISIONS OF AN ACT OR RULE ARE UNDER CHALLENGE; OR ( B ) WHERE BOARDS ORDER, NOTIFICATION, INSTRUCTION OR CIRCULAR HAS BEEN HELD TO BE ILLEGAL OR ULTRA VIRES, OR ( C ) WHERE REVENUE AUDIT OBJECTION IN THE CASE HAS BEEN ACCEPTED BY THE DEPARTMENT; OR ( D ) WHERE THE ADDITION RELATES TO UNDISCLOSED FOREIGN ASSETS / BANK ACCOUNTS. 8 . AS COULD BE SEEN FROM A READING OF THE EXTRACTED PORTION OF THE CIRCULAR , IN CERTAIN SITUATION S INCLUDING ACCEPTANCE OF REVENUE AUDIT OBJECTION BY THE DEPARTMENT, THE ISSUES RAISED IN APPEAL SHOULD BE CONTESTED ON MERIT IRRESPECTIVE OF THE TAX EFFECT / MON E T A RY LIMIT MENTIONED IN PARA 3 OF THE SAID CIRCULAR. THUS, IT IS THE CON TENTION OF 8 M/S. CANBARA CONSTRUCTION PVT. LTD. THE REVENUE THAT IN THE PRESENT CASE , THE ISSUES RAISED IN THE APPEAL HAVE TO BE CONTESTED ON MERIT AS THEY ARE ON ACCOUNT OF REVENUE AUDIT OBJECTION BEING ACCEPTED BY THE DEPARTMENT. IT IS WORTH MENTIONING, S UBSEQUENTLY, THE BOARD FINDING THAT BY WRONG/ERRONEOUS INTERPRETATION OF PARA 8 OF CIRCULAR NO.21/2015, APPEALS ARE BEING FILED MECHANICALLY , CAME UP WITH ONE MORE CIRCULAR VIDE CIRCULAR NO.5 OF 2017 DATED 23 RD JANUARY 2017, EXPLAINING THE T RUE IMPORT OF THE EXPRESSION CONTESTED ON MERIT S AS EMPLOYED IN PARA 8 OF CBDT CIRCULAR NO.21/2015 . FOR BETTER APPRECIATION, IT IS NECESSARY TO REPRODUCE THE AFORESAID CIRCULAR HEREIN BELOW: CIRCULAR NO. 5 /2017 FTS NO. 279 157/ITJ GOVERNMENT OF INDIA MINISTRY OF FINANCE CENTRAL BOARD OF DIRECT TAXES ***** NEW DELHI, DATED 23 TD JANUARY, 2017 SUBJECT: MEASURES FOR REDUCING LITIGATION - CLARIFICATION ON CIRCULARS 21/2015 AND 8/2016 REG . INSTRUCTIONS WERE ISSUED VIDE CBDT CIRCULAR NO. 21/2015 DATED 10.12.2015, TO THE EFFECT THAT APPEALS/SLPS SHOULD NOT BE FILED IN CASES WHERE TAX EFFECT DOES NOT EXCEED THE MONETARY LIMITS SPECIFIED UNDER PARA 3 OF THE SAID CIRCULAR. IT WAS ALSO CLARIFIED THEREIN THAT AN APPEAL SHOULD NOT BE FILED MERELY BECAUSE THE TAX EFFECT IN A CASE EXCEEDS THE MONETARY LIMITS PR ESCRIBED IN THE SAID CIRCULAR. 2. IN PARA 8 OF THE AFORESAID CIRCULAR NO. 21/2015, IT HAS BEEN UNAMBIGUOUSLY AND EXPRESSLY PROVIDED THAT ADVERSE JUDGEMENTS RELATING TO THE FOLLOWING ISSUES SHOULD BE CONTESTED ON MERITS NOTWITHSTANDING THAT THE TAX EFFECT ENTAILED IS LESS THAN THE MONETARY LIMITS SPECIFIED IN CIRCULAR OR EVEN IF THERE IS NO TAX EFFECT: 9 M/S. CANBARA CONSTRUCTION PVT. LTD. A . WHERE THE CONSTITUTIONAL VALIDITY OF THE PROVISIONS OF AN ACT OR RULE ARE UNDER CHALLENGE, OR B . WHERE BOARD'S ORDER, NOTIFICATION, INSTRUCTION OR CIRCULAR HAS BEEN HELD TO BE ILLEGAL OR ULTRA VIRES, OR C . WHERE REVENUE AUDIT OBJECTION IN THE CASE HAS BEEN ACCEPTED BY THE DEPARTMENT D . WHERE THE ADDITION RELATES TO UNDISCLOSED FOREIGN ASSETS/BANK ACCOUNTS. THE DIRECTION TO 'CONTEST ON MERITS' NEGATES THE MECHANICAL F ILING OF APPEALS IN THESE CASES. 3. HOWEVER, IT HAS BEEN NOTICED THAT PARA 8 (C) OF CIRCULAR NO. 21/2015, REGARDING CASES WHERE ADDITION MADE ON ACCOUNT OF REVENUE AUDIT OBJECTION IS DELETED, IS BEING ERRONEOUSLY INTERPRETED AND APPEALS ARE BEING MECHANICALLY FILED BY THE DEPARTMENT WITHOUT PROPER EXAMINATION OF THE CASE ON MERITS. THIS IS CONTRARY TO THE INSTRUCTIONS CONTAINED IN CIRCULAR NO. 21/2015 AND CIRCULAR NO. 8/2016. IT IS, THEREFORE, CLARIFIED THAT THE IMPORT AND INTENT OF PARA 8 OF THE C IRCULAR NO. 21/2015 IS THAT EVEN ON ISSUES MENTIONED IN THE SAID PARA, APPEALS AGAINST THE ADVERSE JUDGMENT SHOULD ONLY BE FILED ON MERITS. 4. ACCORDINGLY, HENCEFORTH, APPEALS SHOULD NOT BE FILED BY THE DEPARTMENT IN VIOLATION OF INSTRUCTIONS MENTIONED AB OVE. FURTHER, APPEALS THAT MAY HAVE BEEN FILED IN VIOLATION OF THESE INSTRUCTIONS MAY BE WITHDRAWN. 5. THE ABOVE MAY BE BROUGHT TO THE NOTICE OF ALL CONCERNED. SD/ (NEETIKA BANSAL DS (ITJ) CBDT, NEW DELHI COPY TO: 1 . THE CHAIR MAN, MEMBERS AND OFFICERS OF THE CBDT OF THE RANK OF UNDER SECRETARY AND ABOVE. 2 . OSD TO REVENUE SECRETARY. 3 . ALL PR. CHIEF COMMISSIONERS OF INCOME - TAX 86 ALL DIRECTORS GENERAL OF INCOME - TAX WITH A REQUEST TO BRING TO THE ATTENTION OF ALL OFFICERS. 4 . THE COMPTROLLER AND AUDITOR GENERAL OF INDIA. 5 . THE PR. DIRECTOR GENERAL OF INCOME - TAX NADT, NAGPUR. 6 . THE PR.DGIT (SYSTEMS), ARA CENTRE, JHANDEWALAN EXTENSION, NEW DELHI. 7 . THE PR. DGIT (VIGILANCE), NEW DELHI 10 M/S. CANBARA CONSTRUCTION PVT. LTD. 8 . THE ADG (PR,PP OL), MAYUR BHAWAN, NEW DELHI FOR PRINTING IN THE QUARTERLY TAX BULLETIN AND FOR CIRCULATION AS PER USUAL MAILING LIST. 9 . THE ADG - 4 (SYSTEMS) FOR UPLOADING O ITD WEBSITE. 10 . DATA BASE CELL FOR UPLOADING ON IRSOFFICERSONLINE. 11 . GUARD FILE. SD/ (NEETIKA BANSAL DS (ITJ) CBDT, NEW DELHI 9 . A READING OF THE AFORESAID CIRCULAR , AND MORE SPECIFICALLY , PARA 2 AND 3 OF THE SAID CIRCULAR MAKES IT CLEAR THAT THE EXPRESSION CONTESTED ON MERITS , AS EMPLOYED IN CIRCULAR NO.21/2015, DOES NOT MEAN MECHANICAL FILING OF APPEALS IN RESPECT OF CASES COMING WITHIN THE EXCEPTION PROVIDED IN PARA 8 OF CIRCULAR NO.21/2015. THE AFORESAID CIRCULAR SPECIFICALLY REFERRING TO PARA 8(C) OF CIRCULAR NO.21/2015, WH ICH RELATES TO REVENUE AUDIT OBJECTION CASES , HAS STATED THAT MECHANICAL FILING OF APPEAL BY THE DEPARTMENT WITHOUT PROPER EXAMINATION OF THE CASE ON MERIT IS CONTRARY TO THE INSTRUCTIONS CONTAINED IN CIRCULAR NO.21/2015. THUS, CBDT CIRCULAR NO.5/2017, IN EFFECT, EXPLAINS AND CLARIFIES THE TRUE IMPORT AND INTENT OF PARA 8 OF CBDT CIRCULAR NO.21/2015. IN THE CASE BEFORE US, IT IS THE CONTENTION OF THE REVENUE THAT , SINCE , THE ISSUE INVOLVED IN THE APPEAL ARIS ES OUT OF REVENUE AUDIT OBJECTION , IT HAS TO BE CO NTESTED ON MERIT. HOWEVER, WHEN THE BENCH CALLED UPON THE LEARNED DEPARTMENTAL REPRESENTATIVE TO DEMONSTRATE THAT THE APPEAL OF THE DEPARTMENT WAS NOT FILED MECHANICALLY, HENCE, IS IN COMPLIANCE TO THE RESTRICTIONS / CONDITIONS 11 M/S. CANBARA CONSTRUCTION PVT. LTD. IMPOSED IN CIRCULAR NO.5/201 7 DATED 23 RD JANUARY 2017 R/W PARA 8 OF CIRCULAR NO.21/2015, DATED 20 TH DECEMBER 2015, THE LEARNED DEPARTMENTAL REPRESENTATIVE SUBMITTED BEFORE US THE FOLLOWING DOCUMENTS; (I) COPY OF THE REVENUE AUDIT OBJECTION DATED 29 TH MARCH 2010 ; (II) LETTER DATED 30 TH MARCH 2010 OF INCOME TAX OFFICER 8(1)(2), MUMBAI, ACCEPTING THE AUDIT OBJECTION ; (III) LETTER DATED 5 TH MAY 2010 OF INCOME TAX OFFICER 8(1)(2), MUMBAI; (IV) LETTER DATED 24 TH FEBRUARY 2012 OF ACIT HQ MUMBAI, RECORDING APPROVAL OF COMMISSIONER OF INCOME TAX FOR RE OPENING OF ASSESSMENT UNDER SECTION 147 OF THE ACT. FURTHER, THE LEARNED DEPARTMENTAL REPRESENTATIVE FURNISHED LETTER DATED 27 TH FEBRUARY 2018, OF INCOME TAX OFFICER 9(2)(2), MUMBAI, CONTAINING THE ORDER SHEET NOTING OF THE PRINCIPAL CIT RECOMME NDING FILING OF MISC. APPLICATION BEFORE THE TRIBUNAL ON THE REASONING THAT THE MATTER ARISES OUT OF ACCEPTED AUDIT OBJECTION. THUS, NONE OF THE AFORESAID DOCUMENTS SUBMITTED BY THE LEARNED DEPARTMENTAL REPRESENTATIVE EITHER EXPRESSLY OR IMPLIEDLY DEMONSTR ATE THAT THE PRESENT APPEAL WAS FILED FOR CONTESTING ON MERIT WITH PROPER AND DUE APPLICATION OF MIND AND WAS NOT FILED MECHANICALLY MERELY BECAUSE OF REVENUE AUDIT OBJECTION. THUS, THE REVENUE HAS FAILED TO DEMONSTRATE AND CONVINCE US THAT THE PRESENT A PPEAL IS IN COMPLIANCE TO THE INSTRUCTIONS ISSUED IN CIRCULAR NO.21/2017, DATED 20 TH DECEMBER 2015, R/W CBDT CIRCULAR NO.5/2017 DATED 23 RD JANUARY 2017. MOREOVER, IN PARA 2 OF THE MISC. APPLICATION, THE REVENUE HAS ADMITTED THAT THE 12 M/S. CANBARA CONSTRUCTION PVT. LTD. ISSUE RAISED IN THE APP EAL FILED BY IT IS ESSENTIALLY A QUESTION OF FACT. AS COULD BE SEEN FROM THE IMPUGNED ORDER OF THE LEARNED COMMISSIONER (APPEALS) , WHICH IS THE SUBJECT MATTER OF THE APPEAL BEFORE THE TRIBUNAL, THE FIRST APPELLATE AUTHORITY AFTER EXAMINING THE FACTS ON REC ORD AS WELL AS REMAND REPORT OF THE ASSESSING OFFICER HAS RECORDED A FINDING OF FACT THAT THE INTEREST PAID BY THE ASSESSEE IS IN RELATION TO OTHER BORROWINGS AND NOT RELATING TO FUNDS USED FOR PURCHASE OF TDR . IN VIEW OF SUCH FACTUAL FINDING BY LEARNED CO MMISSIONER (APPEALS), IT WAS ALL THE MORE NECESSARY FOR THE DEPARTMENT TO DEMONSTRATE THAT THE APPEAL WAS NOT FILED MECHANICALLY MERELY BECAUSE OF REVENUE AUDIT OBJECTION AND WHICH T HE REVENUE HAS FAILED TO DO. THOUGH, WE ARE CONSCIOUS OF THE FACT THAT AT THE TIME OF FILING OF THE PRESENT APPEAL, THE CBDT CIRCULARS REFERRED TO HEREINBEFORE WERE NOT IN VOGUE, HOWEVER, THE INTENTION OF THE BOARD TO WEED OUT AND NOT CONTEST CERTAIN APPEALS AS MENTIONED IN THESE CIRCULARS HAVE TO BE APPRECIATED AND TAKEN TO ITS L OGICAL END CONSIDERING THE FACT THAT AFORESAID CIRCULARS HAVE BEEN MADE APPLICABLE, EVEN TO PENDING APPEALS. IN VIEW OF THE AFORESAID, THERE BEING NO MISTAKE , MUCH LESS, ANY MISTAKE APPARENT ON THE FACE OF RECORD AS ENVISAGED UNDER SECTION 252(2) OF THE ACT, WE DECLINE TO RECALL THE APPEAL ORDER DATED 17 TH FEBRUARY 2016, PASSED IN ITA NO.2597/MUM./2015. 13 M/S. CANBARA CONSTRUCTION PVT. LTD. 10 . IN THE RESULT, MISC. APPLICATION IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 27.06.2018 SD/ - G. MANJUNATHA ACCOUNTANT MEMBER SD/ - SAKTIJIT DEY JUDICIAL MEMBER MUMBAI, DATED : 27.06.2018 COPY OF THE ORDER FORWARDED TO : ( 1 ) THE ASSESSEE; ( 2 ) THE REVENUE; ( 3 ) THE CIT(A); ( 4 ) THE CIT, MUMBAI CITY CONCERNED; ( 5 ) THE DR, ITAT, MUMBAI; ( 6 ) GUARD FILE . TRUE COPY BY ORDER PRADEEP J. CHOWDHURY SR. PRIVATE SECRETARY ( SR. PRIVATE SECRETARY ) ITAT, MUMBAI