ITO, Ward-2(1), Cuttack v. M/S. Agarwal Transport Corporation, Cuttack

IN THE INCOME TAX APPELLATE TRIBUNAL CUTTACK BENCH CUTTACK BEFORE SHRI C.M. GARG JM & SHRI L.P. SAHU AM . / ITA NO. 204 /CTK/201 9 ( / ASSESSMENT YEAR : 20 1 4 - 20 1 5 ) ITO WARD - 2(1) CUTTACK VS. M/S AGARWAL TRANSPORT CORPORATION MANGALABAG CUTTACK ./ PANNO. : A A FFA 2795 K ( / APPELLANT ) .. ( / RESPONDENT ) /REVENUE BY : SHRI SUBHENDU DUTTA DR /ASSESSEE BY : SHRI S.N.SAHU AD VOCATE / DATE OF HEARING : 05 / 1 1 /2019 / DATE OF PRONOUNCEMENT : 06 / 1 1 /2019 / O R D E R PER L.P.SAHU A M : THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) CUTT ACK DATED 20.03.2019 FOR THE ASSESSMENT YEAR 201 4 - 201 5 . 2 . AT THE OUTSET LD. AR OF THE ASSESSEE SUBMITTED THAT THE APPEAL OF REVENUE IS NOT MAINTAINABLE AS PER THE CBDT CIRCULAR NO.17/2019 DATED 8 TH AUGUST 2019 AND THEREFORE THE SAME DESERVES TO BE DI SMISSED. 3 . LD. DR ALSO FAIRLY CONCEDED THAT NO DOUBT THE TAX EFFECT INVOLVED IN THE APPEAL IS LESS THAN RS.50 LAKHS THUS BOUND BY THE DEPARTMENTAL INSTRUCTION HOWEVER LD. DR DREW OUR ATTENTION TO PARA 10 OF THE ITA NO. 204 /CTK/201 9 2 CIRCULAR NO.3/2018 DATED 11 TH JULY 201 8 WHICH HAS BEEN MODIFIED BY CIRCULAR DATED 20 TH AUGUST 2018 AND IN TERMS OF SAID MODIFICATION THE DEPARTMENTAL REPRESENTATIVES MADE A PRAYER THAT PERMISSION TO PRAY FOR RECALL OF THE ORDER MAY BE GRANTED IN CASE ANY OF THE CONDITIONS IN THE REPORTS MAD E AVAILABLE BY THE AO SUBSEQUENTLY SHOW THAT THE ISSUES WERE REQUIRED TO BE CONTESTED. THE MODIFIED PARA IS EXTRACTED HEREUNDER: 10. ADVERSE JUDGMENTS RELATING TO THE FOLLOWING ISSUES SHOULD BE CONTESTED ON MERITS NOTWITHSTANDING THAT THE TAX EFFECT ENTAI LED IS LESS THAN THE MONETARY LIMITS SPECIFIED IN PARA 3 ABOVE OR THERE IS NO TAX EFFECT: (A) WHERE THE CONSTITUTIONAL VALIDITY OF THE PROVISIONS OF AN ACT OR RULE IS UNDER CHALLENGE OR (B) WHERE BOARD'S ORDER NOTIFICATION INSTRUCTION OR CIRCULAR HA S 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 ADDITION RELATES TO UNDISCLOSED FOREIGN INCOME/UNDISCLOSED FOREIGN ASSETS (INCLUDING FINANCIAL ASSETS)/ UNDISCLO SED FOREIGN BANK ACCOUNT. (E) WHERE ADDITION IS BASED ON INFORMATION RECEIVED FROM EXTERNAL SOURCES IN THE NATURE OF LAW ENFORCEMENT AGENCIES SUCH AS CBI/ED/DRI/SFIO/ DIRECTORATE GENERAL OF GST INTELLIGENCE (DGGI). (F) CASES WHERE PROSECUTION HAS BEEN FILED BY THE DEPARTMENT AND IS PENDING IN THE COURT. 4 . EARLIER IN CIRCULAR NO.3/2018 DATED 11 TH JULY 2018 IT HAS BEEN DECIDED BY THE CBDT THAT DEPARTMENTAL APPEALS MAY BE FILED ON MERITS BEFORE INCOME TAX APPELLATE TRIBUNAL AND HIGH COURTS AND SLPS/ APPEALS BEFORE SUPREME COURT KEEPING IN VIEW THE MONETARY LIMITS AND CONDITIONS SPECIFIED BELOW. HENCEFORTH APPEALS/SLPS SHALL ITA NO. 204 /CTK/201 9 3 NOT BE FILED IN CASES WHERE THE TAX EFFECT DOES NOT EXCEED THE MONETARY LIMITS GIVEN HEREUNDER: S. NO . APPEALS/SLPS IN INCOME - TA X MATTERS MONETARY LIMIT (RS.) 1. BEFORE APPELLATE TRIBUNAL 20 00 000 2. BEFORE HIGH COURT 50 00 000 3. BEFORE SUPREME COURT 1 00 00 000 5 . FURTHER THE CBDT AMENDED THE ABOVE CIRCULAR VIDE CIRCULAR NO.17/2019 DATED 8 TH AUGUST 2019 WHEREBY ENHANCIN G THE MONETARY LIMITS FOR FILING OF APPEALS BY THE DEPARTMENT BEFORE THE INCOME TAX APPELLATE TRIBUNALS HIGH COURTS AND SLPS/APPEALS BEFORE THE SUPREME COURT AS UNDER : - S. NO . APPEALS/SLPS IN INCOME - TAX MATTERS MONETARY LIMIT (RS.) 1. BEFORE APPELLATE T RIBUNAL 50 00 000 2. BEFORE HIGH COURT 1 00 00 000 3. BEFORE SUPREME COURT 2 00 00 000 6 . GOING BY THE PRESCRIPTION OF AMENDED CIRCULAR NO. 17/2019 DATED 8 TH AUGUST 2019 WE ARE OF THE VIEW THAT THE REVENUE SHOULD HAVE EITHER NOT FILED THE INSTANT A PPEAL BEFORE THE TRIBUNAL OR WITHDRAWN THE SAME AS THE TAX EFFECT IN THE APPEAL IS ADMITTEDLY LESS THAN THE PRESCRIBED LIMIT I.E. RS. 50 00 000/ - FOR NOT FILING THE APPEAL WHICH IS NOT MAINTAINABLE AS PER THE PROVISIONS OF SECTION 268A OF THE INCOME TAX ACT 1961. ITA NO. 204 /CTK/201 9 4 7 . THE COORDINATE BENCH OF THE TRIBUNAL IN ITA NO.1398/AHD/2004 ORDER DATED 14.08.2009 HAS DISMISSED THE APPEALS FILED BY THE REVENUE BELOW THE MONETARY LIMIT OF RS.50 00 000/ - AS PRESCRIBED BY THE CBDT VIDE CIRCULAR NO.17/2019 DATED 8 TH AUG UST 2019. THE RELEVANT OBSERVATIONS OF THE TRIBUNAL ARE AS UNDER : - 5. HAVING CONSIDERED THE RIVAL SUBMISSIONS AND HAVING PERUSED THE MATERIAL ON RECORD WE DO NOT HAVE SLIGHTEST OF HESITATION IN HOLDING THAT THE CONCESSION EXTENDED BY THE CBDT NOT ONLY APPLIES TO THE APPEALS TO BE FILED IN FUTURE BUT IT IS ALSO EQUALLY APPLICABLE TO THE APPEALS PENDING FOR DISPOSAL AS ON NOW. OUR LINE OF REASONING IS THIS. THE CIRCULAR DATED 8 TH AUGUST 2019 IS NOT A STANDALONE CIRCULAR. IT IS TO BE REA D IN CONJUNCTION WITH THE CBDT CIRCULAR NO 3 OF 2018 (AND SUBSEQUENT AMENDMENT THERETO) AND ALL IT DOES IS TO REPLACE PARAGRAPH NOS. 3 AND 5 OF THE SAID CIRCULAR. THIS IS EVIDENT FROM THE FOLLOWING EXTRACTS FROM THE CIRCULAR DATED 8 TH AUGUST 2019: 2. AS A STEP TOWARDS FURTHER MANAGEMENT OF LITIGATION. IT HAS BEEN DECIDED BY THE BOARD THAT MONETARY LIMITS FOR FILING OF APPEALS IN INCOME - TAX CASES BE ENHANCED FURTHER THROUGH AMENDMENT IN PARA 3 OF THE CIRCULAR MENTIONED ABOVE AND ACCORDINGLY. THE TABL E FOR MONETARY LIMITS SPECIFIED IN PARA 3 OF THE CIRCULAR SHALL READ AS FOLLOWS: S.NO . APPEALS/SLPS IN INCOME - TAX MATTERS MONETARY LIMIT (RS.) 1. BEFORE APPELLATE TRIBUNAL 50 00 000 2. BEFORE HIGH COURT 1 00 00 000 3. BEFORE SUPREME COURT 2 00 00 000 3. FURTHER WITH A VIEW TO PROVIDE PARITY IN FILING OF APPEALS IN SCENARIOS WHERE SEPARATE ORDER IS PASSED BY HIGHER APPELLATE AUTHORITIES FOR EACH ASSESSMENT YEAR VIS - A - VIS WHERE COMPOSITE ORDER FOR MORE THAN ONE ASSESSMENT YEARS IS PASSED. PARA 5 OF THE CIRCULAR IS SUBSTITUTED BY THE FOLLOWING PARA: 5. THE ASSESSING OFFICER SHALL CALCULATE THE TAX EFFECT SEPARATELY FOR EVERY ASSESSMENT YEAR IN RESPECT OF THE DISPUTED ISSUES IN THE CASE OF EVERY ASSESSEE. IF IN THE CASE OF AN ASSESSEE THE DIS PUTED ISSUES ARISE IN MORE THAN ONE ASSESSMENT YEAR APPEAL CAN BE FILED IN RESPECT OF SUCH ASSESSMENT YEAR OR YEARS IN WHICH THE TAX EFFECT IN RESPECT OF THE DISPUTEDISSUES EXCEEDS THE MONETARY LIMIT SPECIFIED IN PARA ITA NO. 204 /CTK/201 9 5 3. NO APPEAL SHALL BE FILED IN RESPECT OF AN ASSESSMENT YEAR OR YEARS IN WHICH THE TAX EFFECT IS LESS THAN THE MONETARY LIMIT SPECIFIED IN PARA 3. FURTHER EVEN IN THE CASE OF COMPOSITE ORDER OF ANY HIGH COURT OR APPELLATE AUTHORITY WHICH INVOLVES MORE THAN ONE ASSESSMENT YEAR AND COMMON ISSU ES IN MORE THAN ONE ASSESSMENT YEAR NO APPEAL SHALL BE FILED IN RESPECT OF AN ASSESSMENT YEAR OR YEARS IN WHICH THE TAX EFFECT IS LESS THAN THE MONETARY LIMIT SPECIFIED IN PARA 3. IN CASE WHERE A COMPOSITE ORDER/ JUDGEMENT INVOLVES MORE THAN ONE AS SESSEE EACH ASSESSEE SHALL BE DEALT WITH SEPARATELY 4. THE SAID MODIFICATIONS SHALL COME INTO EFFECT FROM THE DATE OF ISSUE OF THIS CIRCULAR. 6. CLEARLY ALL OTHER PORTIONS OF THE CIRCULAR NO. 3 OF 2018 (SUPRA) HAVE REMAINED INTACT. THE PORTION WHICH H AS REMAINED INTACT INCLUDES PARAGRAPH 13 OF THE AFORESAID CIRCULAR WHICH IS AS FOLLOWS: 13.THIS CIRCULAR WILL APPLY TO SLPS/ APPEALS/ CROSS OBJECTIONS/REFERENCES TO BE FILED HENCEFORTH IN SC/HCS/TRIBUNAL AND IT SHALL ALSO APPLY RETROSPECTIVELY TO PENDING SLPS/ APPEALS/ CROSS OBJECTIONS/REFERENCES. PENDING APPEALS BELOW THE SPECIFIED TAX LIMITS IN PARE 3 ABOVE MAY BE WITHDRAWN/ NOT PRESSED. 7. IN VIEW OF THE ABOVE DISCUSSIONS WE HEREBY HOLD THAT THE RELAXATION IN MONETARY LIMITS FOR DEPARTMENTAL APPEALS VIDE CBDT CIRCULAR DATED 8 TH AUGUST 2019 (SUPRA) SHALL BE APPLICABLE TO THE PENDING APPEALS IN ADDITION TO THE APPEALS TO BE FILED HENCEFORTH. 8. LEARNED COMMISSIONER (DR) THEN SUBMITS LIBERTY MAY KINDLY BE GIVEN TO POINT OUT UPON NECESSARY F URTHER VERIFICATIONS AND TO SEEK RECALL THE DISMISSAL OF APPEALS AND RESTORATION OF THE APPEALS IN THE CASES (I) IN WHICH IT CAN BE DEMONSTRATED THAT THE APPEALS ARE COVERED BY THE EXCEPTIONS AND (II) WHICH ARE INADVERTENTLY INCLUDED IN THIS BUNCH OF APPE ALS WHEREIN THE TAX EFFECT IN TERMS OF THE CBDT CIRCULAR (SUPRA) EXCEEDS RS 50 00 000. NONE OPPOSES THIS PRAYER; WE ACCEPT THE SAME. WE MAKE IT CLEAR THAT THE APPELLANTS SHALL BE AT LIBERTY TO POINT OUT THE CASES WHICH ARE WRONGLY INCLUDED IN THE APPEALS SO SUMMARILY DISMISSED EITHER OWING TO WRONG COMPUTATION OF TAX EFFECT OR OWNING TO SUCH CASES BEING COVERED BY THE PERMISSIBLE EXCEPTIONS - OR FOR ANY OTHER REASON AND WE WILL TAKE APPROPRIATE REMEDIAL STEPS IN THISREGARD. 9. IN THE LIGHT OF THE ABOVE DISCUSSIONS ALL THE APPEALS STAND DISMISSED AS WITHDRAWN. AS THE APPEALS FILED BY THE REVENUE ARE ITA NO. 204 /CTK/201 9 6 FOUND TO BE NON - MAINTAINABLE AND AS ALL THE RELATED CROSS - OBJECTIONS OF THE ASSESSEE ARISE ONLY AS A RESULT OF THOSE APPEALS AND MER ELY SUPPORT THE ORDER OF THE CIT(A) THE CROSS OBJECTIONS FILED BY THE ASSESSEE ARE ALSO DISMISSED AS INFRUCTUOUS. ORDERED ACCORDINGLY. 8 . LD D.R. SUBMITTED THAT AS PER PARA 4 OF CBDT CIRCULAR NO.17/2019 DATED 8 TH AUGUST 2019 THE MODIFICATIONS SHALL COME INTO EFFECT FROM THE DATE OF THIS ISSUE OF THIS CIRCULAR I.E. 8.8.2019. THEREFORE IT IS NOT APPLICABLE TO THE PENDING APPEALS. 9 . AFTER CONSIDERING THE SUBMISSION OF BOTH THE PARTIES AND KEEPING IN VIEW THE ORDER DATED 14.8.2019 OF THE ITAT AHMEDABA D BENCH IN THE CASE OF DINESH MUDHAVLAL PATEL (SUPRA) WE ARE OF THE VIEW THAT THE RELAXATION IN THE MONETARY LIMIT IN DEPARTMENTAL APPEALS VIDE CIRCULAR DATED 8 TH AUGUST 2019 SHALL BE APPLICABLE TO THE PENDING APPEALS IN ADDITION TO THE APPEALS TO BE FIL ED HENCEFORTH. THUS THE CONTENTION OF LD D.R. IS DISMISSED. 10 . ACCORDINGLY WE DISMISS THE APPEAL FILED BY THE REVENUE WITHOUT GOING INTO MERITS OF THE CASE. HOWEVER IT IS MADE CLEAR THAT THE DEPARTMENT IS AT LIBERTY TO FILE MISCELLANEOUS APPLICATION IF THE TAX EFFECT IS FOUND TO BE MORE THAN THE PRESCRIBED LIMIT OF RS.50 00 000/ - AS PER THE AMENDMENT CARRIED OUT BY THE CBDT IN CIRCULAR NO.17/2019 DATED 8 TH AUGUST 2019 OR ANY OF THE CONDITIONS ETC. AS AVAILABLE IN THE AMENDED PARA 10 OF CIRCULAR NO. 3/2018 DATED 20 TH AUGUST 2018. ACCORDINGLY THE APPEAL OF THE REVENUE DESERVES TO BE DISMISSED. ITA NO. 204 /CTK/201 9 7 11 . IN THE RESULT THE APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 06 /1 1 /2019. SD/ - ( C.M.GARG ) SD/ - (L.P.SAH U) / JUDICIAL MEMBER / ACCOUNTANT MEMBER CUTTACK; DATED 06 / 1 1 /201 9 PRAKASH KUMAR MISHRA SR.P.S. / COPY OF THE ORDER FORWARDED TO : / BY ORDER ( SENIOR PRIVATE SECRETARY ) ITAT CUTTACK BENCH CUTTACK 1. / THE APPELLANT - ITO WARD - 2(1) CUTTACK 2. / THE RESPONDENT - M/S AGARWAL TRANSPORT CORPORATION MANGALABAG CUTTACK 3. ( ) / THE CIT(A) 4. / CIT 5. / DR ITAT CUTTACK 6. / GUARD FILE. //TRUE COPY//