The ITO, Ward-15(1),, Ahmedabad v. Shri Madhusudan Jethigiri Goswami, Ahmedabad

ITA 171/AHD/2010 | 2007-2008
Pronouncement Date: 09-02-2010 | Result: Dismissed

Appeal Details

RSA Number 17120514 RSA 2010
Assessee PAN AEKPG5961J
Bench Ahmedabad
Appeal Number ITA 171/AHD/2010
Duration Of Justice 21 day(s)
Appellant The ITO, Ward-15(1),, Ahmedabad
Respondent Shri Madhusudan Jethigiri Goswami, Ahmedabad
Appeal Type Income Tax Appeal
Pronouncement Date 09-02-2010
Appeal Filed By Department
Order Result Dismissed
Bench Allotted SMC
Tribunal Order Date 09-02-2010
Date Of Final Hearing 09-02-2010
Next Hearing Date 09-02-2010
Assessment Year 2007-2008
Appeal Filed On 19-01-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH SMC AHMEDABAD BEFORE SHRI I.S. VERMA JUDICIAL MEMBER I.T.A. NO.171/AHD/2010 (ASSESSMENT YEAR 2007-08) ITO WD.15(1) VS SHRI MADHUSUDAN JETHIGIRI AHMEDABAD GOSWAMI 6/2 CHANCHAL BA APARTMENT JAYANT PARK SOCIETY NEAR ISHWAR NAGAR ISANPUR AHMEDABAD PAN : AEKPG5961J (APPELLANT) (RESPONDENT) APPELLANT BY : SMT. NEETU SHAH RESPONDENT BY: WRITTEN SUBMISSION O R D E R IN THIS APPEAL REVENUE HAS OBJECTED TO THE ORDER O F CIT(A)-XXI AHMEDABAD DATED 12-11-2009 FOR THE ASSESSMENT YEAR 2007-08 BY WAY OF FOLLOWING GROUNDS: 1. THE LEARNED CIT(A) HAS ERRED IN LAW AND ON FACT S IN DELETING THE ADDITION OF RS.4 62 464/- US 10(10C) OF THE I.T . ACT 1961. 2. IT IS THEREFORE PRAYED THAT THE ORDER OF THE LEA RNED CIT(A MAY BE CANCELLED AND THAT THE ORDER OF THE ASSESSING OF FICER BE RESTORED. 2. AT THE OUTSET IT IS NOTICED THAT THE TAX EFFECT IN THIS APPEAL IS BELOW THE PRESCRIBED LIMIT UNDER INSTRUCTION NO.2/2005 DATED 24-10-2005 . THE ASSESSEE FILED CALCULATION OF TAX EFFECT WHEREIN THE QUANTU M UNDER DISPUTE IS AMOUNTING TO RS.4 62 464/- AND THE TAX EFFECT ON THIS IS LESS TH EN RS.2 LACS. WHEN THIS WAS CONFRONTED TO THE DR HE HAS NOT DISPUTED THE SAME. 3. IT IS SEEN THAT RECENTLY HONBLE GUJARAT HIGH CO URT IN THE CASE OF CIT V. CONCORD PHARMACEUTICALS IN TAX APPEAL NO.402/2001 VIDE ORDER DATED 05-08- ITA NO.171/AHD/2010 2 2008 HAS FINALLY SETTLED THE ISSUE REGARDING TAX EF FECT CASES. HONBLE HIGH COURT IN THIS CASE HAS HELD AS UNDER:- 20. THERE IS ALSO DIFFERENCE OF OPINION AMONGST TH E COURTS WITH REGARD TO THE APPLICABILITY OF THE CIRCULAR. IF ON THE DA TE OF FILING OF AN APPEAL A CIRCULAR IS NOT IN FORCE OR CERTAIN EXCEPTIONS ARE NOT THERE OR MONETARY LIMIT IS LESS THAN WHAT WAS THERE AT THE TIME OF DECIDING THIS APPEAL IN SUCH CASES THE TRIBUNAL WILL HAVE TO GIVE DUE WEIGHTAGE TO THE PROVISIONS CONTAINED IN THE CIRCULAR PREVALENT ON THE DATE OF FILING OF APPEAL AND NOT ON THE DATE OF THE DECISION OF THE APPEAL. IN CIT V. CHHAGER PACKAGING & PLASTICS (P) LTD. (2008) 214 CTR 389 (BOM) THE BOM BAY HIGH COURT TOOK THE VIEW THAT CIRCULARS / INSTRUCTIONS ISSUED BY TH E BOARD ARE APPLICABLE ONLY PROSPECTIVELY AND IF THERE IS NO REFERENCE TO THEIR APPLICABILITY TO THE PENDING MATTERS SUCH PENDING MATERS CANNOT BE DECI DED ON THE BASIS OF CIRCULARS / INSTRUCTIONS. IN CIT V. PITHWA ENGINEE RING WORKS 276 ITR 519 (BOM) THE BOMBAY HIGH COURT TOOK THE VIEW THAT TAK ING JUDICIAL NOTICE OF THE MONEY VALUE HAVING GONE DOWN AND COST OF LITIGA TION EXPENSES HAVING GONE UP AS WELL AS HUGE PENDENCY OF CASES THE BOAR D SHOULD EVOLVE A POLICY OF APPLYING THE CIRCULAR EVEN TO THE OLD REF ERENCES WHICH ARE STILL UNDIVIDED. THE DEPARTMENT SHOULD NOT HAVE PROCEEDED WITH THE APPEALS / REFERENCES WHEREIN THE TAX IMPACT IS MINIMAL IRRES PECTIVE OF THEIR DATE OF FILING. 21. THERE IS NO DISPUTE ABOUT THE FACT THAT WHERE S UBSTANTIAL QUESTION OF LAW OF IMPORTANCE IS INVOLVED OR WHERE QUESTION OF LAW IS IMPORTANCE IS INVOLVED OR WHERE QUESTION OF LAW IS REPEATEDLY ARISING OR WHERE THE ISSUE IS COVERED BY THE JUDGME NT OF TERRITORIAL HIGH COURT OR SUPREME COURT THE TRIBUNAL WILL HAVE TO DECIDE THE APPEAL ON MERITS AND IN TERMS OF THE LAW DECLARED B Y THE SUPREME COURT OR BY THE TERRITORIAL HIGH COURT. HOWEVER O N THIS GROUND THE MATTERS CANNOT BE REMANDED TO THE TRIBUNAL DIRECTIN G THE TRIBUNAL TO DECIDE THE SAME AFRESH. IF NO OBJECTIONS ARE RA ISED BY THE DEPARTMENTAL REPRESENTATIVE AT THE TIME OF HEARING OF THE APPEAL AGAINST THE APPLICABILITY OF THE CIRCULAR DESPITE T HERE BEING AN EXCEPTION THE DEPARTMENT HAS MISSED THE BUS AND SE COND INNING CANNOT BE GRANTED FOR THAT PURPOSE. HOWEVER IN MA TTERS WHERE SUCH OBJECTIONS ARE RAISED AND DESPITE THOSE OBJECT IONS OR WITHOUT DEALING WITH THOSE OBJECTIONS IF THE TRIBUNAL HAS D ISMISSED THE APPEAL ONLY ON THE GROUND OF LOW TAX EFFECT IN SUCH MATTER AN INDULGENCE IS REQUIRED TO BE SHOWN BY THIS COURT AN D FOR THIS LIMITED PURPOSES THE DEPARTMENT IS PERMITTED TO MOVE AN AP PROPRIATE APPLICATION BEFORE THE TRIBUNAL FOR DECIDING THE AP PEAL ON MERITS. 22. WE ARE OF THE VIEW THAT SIMPLY BECAUSE THE APPE AL IS FILED BY THE DEPARTMENT IN CONTRAVENTION OF THE CIRCULAR THE TRI BUNAL IS NOT BOUND TO DECIDE THE APPEAL ON MERITS. DUE WEIGHTAG E SHOULD ITA NO.171/AHD/2010 3 INVARIABLY BE GIVEN BY THE TRIBUNAL TO THE CIRCULAR ISSUED BY THE BOARD. EVEN OTHERWISE THE NEWLY INSERTED PROVISIO NS CONTAINED IN SECTION 268A(4) MAKE IT OBLIGATORY FOR THE TRIBUNAL TO CONSIDER SUCH CIRCULAR. IT IS NOT OPEN FOR THE DEPARTMENT TO CON TEND THAT CIRCULARS ARE INTERNAL MATTERS OF THE DEPARTMENT AND ASSESSEE CANNOT OBJECT TO FILING OF AN APPEAL ON THE BASIS OF SUCH CIRCULA R. IT IS TRUE THAT FILING OF AN APPEAL IS A STATUTORY RIGHT BUT IT CAN CERTAINLY BE REGULATED BY THE BOARD BY ISSUANCE OF ORDERS INSTR UCTIONS OR CIRCULARS. THIS WOULD NOT AMOUNT TO TAKING AWAY TH E RIGHT OF FILING OF APPEAL OR THAT SUCH RIGHT IS PROHIBITED BY EXECUTIV E INSTRUCTIONS. SECTION 268A(1) OF THE ACT NOW RECOGNIZES SUCH RIGH T OF THE BOARD TO REGULATE THE FILING OF APPEAL OR APPLICATION BEF ORE THE TRIBUNAL OR THE COURT. IT IS ALSO TRUE THAT WHEN THE HONBLE S UPREME COURT OR THE TERRITORIAL HIGH COURT HAVE DECLARED THE LAW ON A QUESTION IT IS NOT OPEN TO THE TRIBUNAL TO DIRECT THAT THE CIRCULA R ISSUED BY THE BOARD PRESCRIBING THE MONETARY LIMIT SHOULD BE GIVE N EFFECT TO AND NOT THE DECISION OF HONBLE SUPREME COURT OR THE TE RRITORIAL HIGH COURT. IT IS HOWEVER EQUALLY TRUE THAT THE TRIBUN ALS ATTENTION MUST BE DRAWN BY THE DEPARTMENTAL REPRESENTATIVE TO SUCH DECISION OF THE HONBLE SUPREME COURT OR THE HIGH COURT. AN OB JECTION MUST BE RAISED BY THE DEPARTMENTAL REPRESENTATIVE. 23. CONSIDERING ALL THE AFORESAID ISSUES WE DISMIS S ALL THESE TAX APPEALS RESERVING LIBERTY TO THE DEPARTMENT ONL Y ON THOSE CASES TO APPLY TO THE TRIBUNAL TO DECIDE THE APPEAL ON MERITS WHERE THE OBJECTIONS WERE RAISED BEFORE THE TRIBUNAL EITH ER IN THE APPEAL MEMO OR AT THE TIME OF HEARING OF APPEAL RAISING A SPECIFIC CONTENTION THAT A PARTICULAR APPEAL IS COVERED BY A N EXCEPTION AND DESPITE THIS OBJECTION THE TRIBUNAL HAS NOT DEALT W ITH THE SAID CONTENTION AND DISMISSED THE APPEAL ON THE GROUND O F LOW TAX EFFECT. IT IS EXPECTED FROM THE TRIBUNAL TO CONSIDE R THIS BROAD PARAMETERS WHILE APPLYING THE RELEVANT CIRCULAR TO THE FATS OF THE CASE AT THE TIME OF DECIDING APPEALS. 4. AT THE TIME OF HEARING BEFORE US THE LD. DEPART MENTAL REPRESENTATIVE WAS SPECIFICALLY ASKED BY THE BENCH WHETHER THIS APPEA L FALLS UNDER ANY OF THE EXCEPTIONS AS PROVIDED IN BOARDS INSTRUCTION NO.2/2005 DATED 24-10-2005 THE SUBJECT-MATTER OF THE APPEALS ARE COVERED BY ANY OF THE JUDGMENT OF JURISDICTIONAL HIGH COURT OR OF SUPREME COURT ANY SUBSTANTIAL QUE STION OF LAW IS INVOLVED OR NOT. THE LD DR STATED THAT IN THESE APPEALS THE IS SUES ARE FACTUAL AND DOES NOT FALL IN ANY OF THE EXCEPTIONS AS PROVIDED BY BOARD S INSTRUCTION OR ANY OF THE CRITERIA LAID DOWN BY THE HONBLE HIGH COURT IN THE CASE OF CONCORD ITA NO.171/AHD/2010 4 PHARMACEUTICALS (SUPRA). THE RELEVANT EXCEPTIONS AS PROVIDED IN B OARDS INSTRUCTION NO.1979/2000 DATED 27-03-2000 READS AS UNDER:- 3. ADVERSE JUDGMENTS RELATING TO THE FOLLOWING SHOULD BE CONTESTED IRRESPECTIVE OF REVENUE EFFECT : (I) WHERE REVENUE AUDITED OBJECTION IN THE CASE HA S BEEN ACCEPTED B THE DEPARTMENT (II) WHERE THE BOARDS ORDER NOTIFICATION INSTRUC TION OR CIRCULAR IS THE SUBJECT-MATTER OF AN ADVERSE ORDER. (III) WHERE PROSECUTION PROCEEDINGS ARE CONTEMPLATE D AGAINST THE ASSESSEE. (IV) WHERE THE CONSTITUTIONAL VALIDITY OF THE PROVI SIONS OF THE ACT ARE UNDER CHALLENGE. 5. WE FIND THAT THIS APPEAL RELATES TO LOW TAX EFFE CT AND COVERED BY THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CONCORD PHARMACEUTICALS (SUPRA). RESPECTFULLY FOLLOWING CONCORD PHARMACEUTICALS (SUPRA) WE DISMISS THIS APPEAL OF THE REVENUE. 6. ORDER PRONOUNCED ON THIS 09 TH DAY OF FEBRUARY 2010. SD/- (I.S. VERMA) JUDICIAL MEMBER AHMEDABAD DT : 09 TH FEBRUARY 2010 PK/- COPY TO: 1. THE ASSESSEE 2. THE REVENUE 3. THE CIT(A)-XXI AHMEDABAD 4. THE CIT AHMEDABAD BY ORDER 5. THE DR SMC BENCH (TRUE COPY) DEPUTY REGISTRAR ITAT AHMEDABAD