ITO, Ward - 36(2), Kolkata, Kolkata v. M/s. Steel House, Kolkata

ITA 2079/KOL/2010 | 2005-2006
Pronouncement Date: 31-01-2011 | Result: Dismissed

Appeal Details

RSA Number 207923514 RSA 2010
Assessee PAN AAKFS2320M
Bench Kolkata
Appeal Number ITA 2079/KOL/2010
Duration Of Justice 2 month(s) 12 day(s)
Appellant ITO, Ward - 36(2), Kolkata, Kolkata
Respondent M/s. Steel House, Kolkata
Appeal Type Income Tax Appeal
Pronouncement Date 31-01-2011
Appeal Filed By Department
Order Result Dismissed
Bench Allotted B
Tribunal Order Date 31-01-2011
Assessment Year 2005-2006
Appeal Filed On 18-11-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL BENCH-B: KO LKATA [BEFORE HONBLE SHRI B.R. MITTAL J.M. & HONBLE SH RI C.D. RAO A.M] I.T.A. NO. 2079/KOL./2010 ASSESSMENT YEAR : 2005-2006 INCOME TAX OFFICER WARD-36(2) KOLKATA -VS.- M/S. STEEL HOUSE KOLKATA (PAN : AAKFS 2320 M) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI P.C. NAYAK SR. D.R. RESPONDENT BY : SHRI YOGESH SHARMA A.R. O R D E R PER SHRI B. R. MITTAL JUDICIAL MEMBER : THE DEPARTMENT HAS FILED THIS APPEAL FOR THE ASSES SMENT YEAR 2005-06 ALONG WITH AN APPLICATION FOR CONDONATION OF DELAY FOR FIVE DAYS AGAINST THE ORDER OF LD. COMMISSIONER OF INCOME-TAX (APPEALS)-XX KOLKATA DATED 31.08.2010 O N THE FOLLOWING GROUND :- ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD . CIT(A.) IS NOT JUSTIFIED IN ALLOWING FULL RELIEF BY DELETING THE ADDITION ON ACCOUNT OF INTRODUCTION OF CAPITAL FOR RS.2 60 000/- & RS.60 000/- (TOTALIN G RS.3 20 000/-) BY THE TWO PARTNERS I.E. SRI YOGESH SHARMA AND SRI SAGAR D UTT SHARMA RESPECTIVELY DURING THE YEAR WHICH WAS TREATED BY T HE ASSESSING OFFICER AS INCOME OF THE ASSESSEE FIRM FROM UNDISCLOSED SOURCE S IN THE GUISE OF PARTNERS CAPITAL. 2. IN RESPECT OF DELAY WE HAVE HEARD THE LD. REPRE SENTATIVES OF THE PARTIES AND HAVE CONSIDERED THE CONTENTS OF APPLICATION DATED 16.11. 2010 FILED BY THE DEPARTMENT. WE ARE SATISFIED THAT THE DELAY WAS DUE TO A REASONABLE CA USE. HENCE WE CONDONE THE DELAY. 3. IN RESPECT OF APPEAL FILED BY THE DEPARTMENT TH E LD. AUTHORISED REPRESENTATIVE OF THE ASSESSEE SUBMITTED THAT THE TAX EFFECT IS LESS THAN RS. 2.00 LAKHS. HE SUBMITTED THAT PURSUANT TO CBDT CIRCULAR NO.279/MISC.-64/05-ITJ DATED 24.10.05 READ WITH INSTRUCTION NO.5 OF 2008 DATED 15.05.2008 THE APPEAL OF THE DEPARTMENT IS N OT MAINTAINABLE. HE SUBMITTED THAT THE DEPARTMENT IN ABOVE INSTRUCTION DATED 15.05.2008 HA S SPECIFIED 3 GROUNDS IN PARA 8 STATING THAT THE APPEAL COULD BE FILED BEFORE THE TRIBUNAL WHERE THE TAX EFFECT IS LESS THAN RS.2.00 LAKHS ONLY IN RESPECT OF THE FOLLOWING 3 CASES :- ITA NO.2079/KOL./2010 2 (A) WHERE THE CONSTITUTIONAL VALIDITY OF THE PROVIS IONS OF AN ACT OR RULE ARE UNDER CHALLENGE. (B) WHERE BOARDS ORDER NOTIFICATION INSTRUCTION OF CIRCULAR HAS BEEN HELD TO BE ILLEGAL OR ULTRA VIRES. (C) WHERE REVENUE AUDIT OBJECTION IN THE CASE HAS B EEN ACCEPTED BY THE DEPARTMENT. HE SUBMITTED THAT NONE OF THE ABOVE CIRCUMSTANCES S TATED BY C.B.D.T. APPLIES TO THE CASE OF THE ASSESSEE AND HENCE APPEAL OF THE DEPARTMENT BE DIS MISSED IN LIMINE. 4. THE LD. DEPARTMENTAL REPRESENTATIVE REFERRED CIR CULAR NO.2 OF 2001 DATED 09.02.2001 AND SUBMITTED THAT THE DEPARTMENT COULD FILE THE AP PEAL. HOWEVER THE LD. AUTHORISED REPRESENTATIVE OF THE ASSESSEE IN HIS REJOINDER SUB MITTED THAT THE SAID CIRCULAR DATED 09.02.2001 IS NOT COVERED BY CBDT INSTRUCTION DATED 15.05.2008 . 5. WE HAVE CONSIDERED THE SUBMISSIONS OF THE LD. RE PRESENTATIVES OF THE PARTIES AND THE RELEVANT CBDT CIRCULARS. THERE IS NO DISPUTE ON THE FACT THAT THE CBDT VIDE INSTRUCTION NO.2/2005 DATED 24.10.05 ISSUES GUIDELINES TO THE REVENUE AUTHORITIES WITH REGARD TO FILING OF APPEALS BEFORE THE TRIBUNAL HIGH COURT AND SUPREME COURT. FROM THE SAID INSTRUCTION IT IS EVIDENT THAT SINCE 1987 THE CBDT HAS BEEN INSTRUCT ING ITS OFFICERS NOT TO FILE THE APPEAL WHERE THE TAX EFFECT IS BELOW CERTAIN MONETARY LIMITS. VI DE INSTRUCTION NO.1903 DATED 28.10.1992 THE MONETARY LIMITS WAS REVISED UPWARD AND THE OFFICERS WERE DIRECTED NOT TO FILE APPEAL BEFORE THE INCOME TAX APPELLATE TRIBUNAL WHERE THE TAX EFFECT WAS BELOW RS.25 000/-. THE ABOVE MONETARY LIMIT WAS FURTHER REVISED UPWARD BY INSTRU CTION NO.1979 DATED 27.03.2000 AND THE OFFICERS WERE DIRECTED NOT TO FILE THE APPEAL TO I. T.A.T. WHERE THE TAX EFFECT IS BELOW RS.1 00 000/-. THEREAFTER IN PARTIAL MODIFICATION O F THE ABOVE INSTRUCTION THE BOARD VIDE INSTRUCTION NO.2/2005 DATED 24.10.2005 HAS FURTHER RAISED THE ABOVE MONETARY LIMIT TO RS.2 00 000 WITH THE SAME DIRECTIONS. THUS THE C.B .D.T. SINCE 1987 HAS NOT ONLY TAKEN A CONSISTENT APPROACH OF INSTRUCTING ITS OFFICERS FOR NOT FILING THE APPEAL WHERE THE TAX EFFECT IS BELOW THE MONETARY LIMIT BUT SUCH MONETARY LIMIT I S ALSO REVISED UPWARD FROM TIME TO TIME. THE CIRCULAR UNDER INSTRUCTION NO.1979 DATED 27.03. 2000 WAS CONSIDERED BY THE HONBLE BOMBAY HIGH COURT IN THE CASE OF CAMCO COLOUR CO. 2 54 ITR 565 AND THEIR LORDSHIPS HELD AT PAGE 568 AS UNDER :- IT APPEARS THAT DESPITE THE ABOVE CIRCULAR THE RE VENUE HAS CHOSEN TO FILE THE PRESENT APPEAL KNOWINGLY FULLY WELL THAT THE CORRID ORS OF THE COURTS ARE ITA NO.2079/KOL./2010 3 FLOODED WITH PENDING LITIGATIONS. THE PRESENTATION 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 DIRECTOR TAXES WE ARE SATISFIED T HAT THE BOARD HAS TAKEN A POLICY DECISION NOT TO FILE APPEAL IN A TYPE OF CAS E IN HAND AND THE SAME IS BINDING ON THE REVENUE (APPELLANT HEREIN). IN THE R ESULT WE DISMISS THIS APPEAL ON THIS COUNT IN LIMINE WITH NO ORDER AS TO COSTS. 6. WE FIND THAT RECENTLY THE APEX COURT HAS CONSIDE RED THE EFFECT OF CIRCULAR ISSUED BY THE C.B.D.T. IN THE CASE OF COMMISSIONER OF CUSTOMS VS. INDIAN OIL CORPORATION LTD. 267 ITR 272. THEIR LORDSHIPS EXAMINED THE EARLIER DECISIONS OF THE APEX COURT WITH REGARD TO BINDING OF THE CIRCULAR AND LAID DOWN THE FOLLOWING PRINCIP LES AT PAGE 277 OF THE REPORTS THE PRINCIPLES LAID DOWN BY ALL THESE DECISIONS AR E 1) ALTHOUGH A CIRCULAR IS NOT BINDING ON A COURT ON AN ASSESSEE IT IS NOT OPEN TO THE REVENUE TO RAISE A CONTENTION THAT IS C ONTRARY TO A BINDING CIRCULAR BY THE BOARD. WHEN A CIRCULAR REMAINS IN O PERATION THE REVENUE IS BOUND BY IT AND CANNOT BE ALLOWED TO PLE AD THAT IT IS NOT VALID NOR THAT IT IS CONTRARY TO THE TERMS OF THE S TATUTE. 2) DESPITE THE DECISION OF THIS COURT THE DEPARTMENT 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 EXISTING CIRCULARS OF THE BOARD ARE AB INITIO VOID. 4) IT IS NOT OPEN TO THE REVENUE TO ADVANCE AN ARGUMEN T OR FILE AN APPEAL CONTRARY TO THE CIRCULARS. WE ALSO OBSERVE FROM THE INSTRUCTION DATED 15.05.20 08 THAT THE BOARD HAS SPECIFIED 3 CASES WHEREIN THE APPEAL COULD BE FILED BY THE DEPARTMENT IRRESPECTIVE OF THE TAX EFFECT AS UNDER :- (A) WHERE THE CONSTITUTIONAL VALIDITY OF THE PROVIS IONS OF AN ACT OR RULE ARE UNDER CHALLENGE. (B) WHERE BOARDS ORDER NOTIFICATION INSTRUCTION OF CIRCULAR HAS BEEN HELD TO BE ILLEGAL OR ULTRA VIRES. (C) WHERE REVENUE AUDIT OBJECTION IN THE CASE HAS B EEN ACCEPTED BY THE DEPARTMENT. SINCE THE CASE OF THE DEPARTMENT DOES NOT FALL IN A NY OF THE EXCEPTION STATED HEREINABOVE AND THE TAX EFFECT IS ADMITTEDLY BELOW RS.2 00 000/- LA KHS WE HOLD THAT APPEAL FILED BY THE ITA NO.2079/KOL./2010 4 DEPARTMENT IS CONTRARY TO THE SAID CIRCULAR/INSTRUC TIONS ISSUED BY C.B.D.T. ACCORDINGLY APPEAL OF THE DEPARTMENT IS NOT ADMITTED AND IS BEING DISM ISSED IN LIMINE. 7. IN THE RESULT THE APPEAL FILED BY THE DEPARTMEN T IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 31.01. 2011. SD/- SD/- [ C. D. RAO ] [ B.R. MITTAL ] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 31 / 01 / 2011 COPY OF THE ORDER FORWARDED TO: 1. M/S. STEEL HOUSE 27 BRABOURNE ROAD KOLKATA-1. 2 ITO WARD-36(2) KOLKATA 18 RABINDRA SARANI KOLK ATA-1 3. CIT KOLKATA- 4. CIT(A)- KOLKATA 5. DR KOLKATA BENCHES KOLKATA (TRUE COPY) BY ORDER DEPUTY REGISTRAR I.T.A.T. KOLKATA. LAHA SR. P.S.