Shri Ranchhodray M.Rami, Ahmedabad v. The Income tax Officer,Ward-15(4),, Ahmedabad

CO 301/AHD/2010 | 2007-2008
Pronouncement Date: 21-01-2011 | Result: Allowed

Appeal Details

RSA Number 30120523 RSA 2010
Assessee PAN SINCE1987H
Bench Ahmedabad
Appeal Number CO 301/AHD/2010
Duration Of Justice 3 month(s) 23 day(s)
Appellant Shri Ranchhodray M.Rami, Ahmedabad
Respondent The Income tax Officer,Ward-15(4),, Ahmedabad
Appeal Type Cross Objection
Pronouncement Date 21-01-2011
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted B
Tribunal Order Date 21-01-2011
Date Of Final Hearing 21-01-2011
Next Hearing Date 21-01-2011
Assessment Year 2007-2008
Appeal Filed On 28-09-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD AHMEDABAD B BENCH (BEFORE S/SHRI G.D. AGARWAL VICE-PRESIDENT AND MUKUL KUMAR SHRAWAT JUDICIAL MEMBER) ITA NO.1276/AHD/2010 WITH CO.301/AHD/2010 [ASSTT. YEAR : 2007-2008] ITO WARD-15(4) AHMEDABAD. VS. SHRI RANCHHODRAY M. RAMI E-202 APARNA SOCIETY JIVRAJ PARK AHMEDABAD. (APPELLANT) (RESPONDENT) REVENUE BY : SHRI K.MADHUSUDAN ASSESSEE BY : NONE O R D E R PER G.D. AGARWAL VICE-PRESIDENT : THIS APPEAL IS BY THE REVENUE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-XXI AHMEDABAD DATED 25.2.2010 ARISING OUT OF THE ORDER OF THE ASSESSING OFFICER PASSED UNDER SECTION 143(3) OF THE INCOME TAX ACT 1961. THE ASSESSEE HAS ALSO FILED CO AGAINST THE APPEAL OF THE REVENUE PLE ADING THAT THE REVENUES APPEAL IS NOT MAINTAINABLE AS THE TAX EFFECT IN RES PECT OF THE GROUNDS URGED IS LESS THAN RS.2 LAKHS IN VIEW OF CBDT INSTRUCTION N O.5/2008 DATED 15-5-2008. 2. IN THIS APPEAL BY THE REVENUE THE ONLY GROUND R AISED IS AGAINST DELETION OF ADDITION OF RS.5 00 000/- UNDER SECTION 10(10C) BY THE LEARNED CIT(A) RELYING UPON THE ORDER OF THE ITAT AHMEDABAD A B ENCH IN ITA NO.1209/AHD/2007 IN THE CSE OF SMT. JAYA NARAYNA & 13 OTHERS DATED 17.7.2007. 3. AT THE OUTSET A QUERY WAS ASKED TO THE LD. DEPA RTMENTAL REPRESENTATIVE BY THE BENCH AS TO WHY THE APPEAL OF THE REVENUE SH OULD NOT BE TREATED AS UN- ADMITTED IN VIEW OF CIRCULAR F.NO.279/MISC.-64/05-I TJ DATED 24TH OCTOBER 2005 AND THE DECISION OF THE HONBLE BOMBAY HIGH CO URT IN THE CASE OF CIT VS. CAMCO COLOUR CO. [254 ITR 565 (BOM)] AND THE HO NBLE APEX COURT IN THE ITA NO.1276/AHD/2010 -2- CASE OF COMMISSIONER OF CUSTOMS VS. INDIAN OIL CORP ORATION LTD. [267 ITR 272 (SC)] BY WHICH THE REVENUE IS RESTRICTED IN FIL ING APPEAL BEFORE THE TRIBUNAL WHERE TAX EFFECT IS BELOW THE MONETARY LIM IT PRESCRIBED BY THE CBDT. THE LD. DEPARTMENTAL REPRESENTATIVE CONTENDED THAT THE HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF RANI PALIWAL VS. C.I.T. [268 I.T.R. 220] AND ALLAHABAD HIGH COURT IN THE CASE OF JUGAL KISHORE A RORA VS. DCIT [269 I.T.R. 133] HAVE TAKEN THE VIEW THAT ONCE AN APPEAL IS FIL ED BY THE REVENUE THE TRIBUNAL SHOULD DISPOSE OF THE APPEAL ON MERITS AND THE ASSESSEE CANNOT RAISE THE OBJECTION AGAINST THE MAINTAINABILITY OF SUCH A PPEAL. 4. WE HAVE CAREFULLY CONSIDERED THE ARGUMENTS OF TH E LD. DEPARTMENTAL REPRESENTATIVE AND PERUSED THE MATERIAL PLACED BEFO RE US. WE FIND THAT THE CBDT VIDE INSTRUCTION NO.2/2005 DATED 24TH OCTOBER 2005 ISSUES GUIDELINES TO THE REVENUE AUTHORITIES WITH REGARD TO FILING OF APPEAL BEFORE THE TRIBUNAL HIGH COURT AND SUPREME COURT. FROM THE ABOVE INSTRU CTION IT IS EVIDENT THAT SINCE 1987 THE CBDT IS INSTRUCTING ITS OFFICERS NO T TO FILE THE APPEAL WHERE THE TAX EFFECT IS BELOW CERTAIN MONETARY LIMITS. VIDE I NSTRUCTION NO. 1903 DATED 28TH OCTOBER 1992 THE MONETARY LIMIT WAS REVISED UPWARD AND THE OFFICERS WERE DIRECTED NOT TO FILE THE APPEAL BEFORE THE INC OME-TAX APPELLATE TRIBUNAL WHERE THE TAX EFFECT WAS BELOW RS.25 000/-. THE ABO VE MONETARY LIMIT WAS FURTHER REVISED UPWARD BY INSTRUCTION NO.1979 DATED 27TH MARCH 2000 AND THE OFFICERS WERE DIRECTED NOT TO FILE THE APPEAL TO IT AT WHERE THE TAX EFFECT IS BELOW RS.1 LAC. THEREAFTER IN PARTIAL MODIFICATION OF THE ABOVE INSTRUCTION THE BOARD VIDE INSTRUCTION NO.2/2005 DATED 24.10.2005 H AS FURTHER RAISED THE ABOVE MONETARY LIMIT TO RS. 2 LAKHS WITH THE SAME D IRECTIONS. THUS THE CBDT SINCE 1987 HAS NOT ONLY TAKEN A CONSISTENT APPROACH OF INSTRUCTING ITS OFFICERS FOR NOT FILING THE APPEAL WHERE THE TAX EFFECT IS B ELOW THE MONETARY LIMIT BUT SUCH MONETARY LIMIT IS ALSO REVISED UPWARD FROM TIM E TO TIME. THE CIRCULAR UNDER INSTRUCTION NO.1979 DATED 27.3.2000 WAS CONSI DERED BY THE BOMBAY HIGH COURT IN THE CASE OF CAMCO COLOUR CO. (SUPRA) AND THEIR LORDSHIPS HELD AT PAGE 568 AS UNDER :- ITA NO.1276/AHD/2010 -3- IT APPEARS THAT DESPITE THE ABOVE CIRCULAR THE RE VENUE HAS CHOSEN TO FILE THE PRESENT APPEAL KNOWING FULLY WELL THAT THE CORRIDORS OF THE COURTS ARE FLOODED WITH PENDING LITIGATIONS. THE PR ESENTATION OF THIS APPEAL IS QUITE CONTRARY TO THE INSTRUCTION ISSUED IN THE CIRCULAR WHICH IS BINDING ON THE REVENUE. IN THE ABOVE VIEW OF THE MATTER CONSIDERING THE IN STRUCTIONS ISSUED BY THE CENTRAL BOARD OF DIRECT TAXES WE ARE SATISF IED THAT THE BOARD HAS TAKEN A POLICY DECISION NOT TO FILE APPEAL IN A TYPE OF CASE IN HAND AND THE SAME IS FINDING ON THE REVENUE (APPELL ANT HEREIN). IN THE RESULT WE DISMISS THIS APPEAL ON THIS COUNT IN LIMINE WITH NO ORDER AS TO COSTS. 5. THE LD. DEPARTMENTAL REPRESENTATIVE HAS RELIED U PON THE CONTRARY DECISIONS GIVEN BY THE HONBLE PUNJAB & HARYANA HIG H COURT IN THE CASE OF RANI PALIWAL (SUPRA) AND ALLAHABAD HIGH COURT IN TH E CASE OF JUGAL KISHORE ARORA (SUPRA). HOWEVER WE FIND THAT RECENTLY THE APEX COURT HAS CONSIDERED THE EFFECT OF CIRCULAR ISSUED BY THE CBDT IN THE CA SE OF COMMISSIONER OF CUSTOMS VS. INDIAN OIL CORPORATION LTD. 267 ITR 272 . THEIR LORDSHIPS EXAMINED THE EARLIER DECISIONS OF THE APEX COURT WI TH REGARD TO BINDING NATURE OF THE CIRCULAR AND LAID DOWN THE FOLLOWING PRINCIP LES AT PAGE 277 OF THE REPORTS :- THE PRINCIPLES LAID DOWN BY ALL THESE DECISIONS ARE (1) ALTHOUGH A CIRCULAR IS NOT BINDING ON A COURT O R AN ASSESSEE IT IS NOT OPEN TO THE REVENUE TO RAISE A CONTENTION THAT IS CONTRARY TO A BINDING CIRCULAR BY THE BOARD. WHEN A CIRCULAR REMAINS IN OPERATION THE REVENUE IS BOUND BY IT AND CANNOT BE ALLOWED TO PLEAD THAT IT IS NOT VALID NOR THAT IT IS CONTRARY TO THE TERMS OF THE STATUTE. (2) DESPITE THE DECISION OF THIS COURT THE DEPARTM ENT CANNOT BE PERMITTED TO TAKE A STAND CONTRARY TO THE INSTRUCTI ONS ISSUED BY THE BOARD. (3) A SHOW CAUSE NOTICE AND DEMAND CONTRARY TO EXIS TING CIRCULARS OF THE BOARD ARE AB INITIO BAD. (4) IT IS NOT OPEN TO THE REVENUE TO ADVANCE AN AR GUMENT OR FILE AN APPEAL CONTRARY TO THE CIRCULARS. (EMPHASIS SU PPLIED) ITA NO.1276/AHD/2010 -4- FROM THE ABOVE IT IS EVIDENT THAT THE HONBLE APEX COURT HAS LAID DOWN THAT IT IS NOT OPEN TO THE REVENUE TO ADVANCE AN ARGUMENT OR FILE AN APPEAL CONTRARY TO THE CIRCULAR. THE APPEAL UNDER CONSIDERATION HAS CERTAINLY BEEN F ILED CONTRARY TO THE CIRCULAR ISSUED BY THE CBDT VIDE CIRCULAR F. NO. 279/MISC-64/05-ITJ DATED 24TH OCTOBER 2005. THEREFORE THE ABOVE DECISION OF THE HONBLE APEX C OURT WOULD BE SQUARELY APPLICABLE. EVEN OTHERWISE THE REVENUE HAS BEEN TA KING A CONSISTENT APPROACH SINCE 1987 NOT TO FILE APPEAL WHERE THE REVENUE EFFECT IS BELOW CERTAIN MONETARY LIMIT TO REDUCE THE LITIGATION PENDING BEFORE THE TRIBUNAL A ND THE COURTS. IF THE APPEALS CONTRARY TO SUCH CIRCULAR ARE ADMITTED IT WOULD FR USTRATE THE PURPOSE OF ISSUING SUCH INSTRUCTIONS. IN THE ABOVE CIRCUMSTANCES WE RESPEC TFULLY FOLLOWING THE DECISION OF THE HONBLE APEX COURT IN THE CASE OF INDIAN OIL CORPOR ATION LTD. (SUPRA) AND BOMBAY HIGH COURT IN THE CASE OF CAMCO COLOUR CO. (SUPRA) HOLD THAT THE REVENUE SHOULD NOT HAVE FILED THE APPEAL CONTRARY TO THE CIRCULAR ISSUED BY THE CBDT. ACCORDINGLY THE SAME IS NOT ADMITTED AND BEING DISMISSED IN LIMINE . 6. SINCE WE DISMISSED THE APPEAL OF THE REVENUE IN VIEW OF THE ABOVE CBDT CIRCULAR CONSEQUENTIALLY THE CO IS ALLOWED. 7. IN RESULT THE REVENUES APPEAL IS DISMISSED AND THE CO OF THE ASSESSEE IS ALLOWED AS ABOVE. ORDER PRONOUNCED IN OPEN COURT ON 21 ST JANUARY 2011. SD/- SD/- (MUKUL KR. SHRAWAT) JUDICIAL MEMBER (G.D. AGARWAL) VICE-PRESIDENT PLACE : AHMEDABAD DATE : 21-01-2011 COPY OF THE ORDER FORWARDED TO: 1) : APPELLANT 2) : RESPONDENT 3) : CIT(A) 4) : CIT CONCERNED 5) : DR ITAT. BY ORDER DR/AR ITAT AHMEDABAD