ITO 20(1)-1, MUMBAI v. ASHOK G. DHNDHIARIA, MUMBAI

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH A MUMBAI BEFORE SHRI P.M. JAGTAP (AM) AND SMT. ASHA VIJAYARA GHAVAN (JM) ITA NO. 2460/MUM/2010 ASSESSMENT YEAR- 2005-06 THE ITO 20(1) - 1 PIRAMAL CHAMBER PAREL MUMBAI-400 012 VS. SHRI ASHOK. G. DH ANDHARIAI B-1/403 GREEN LAND APT J.B. NAGAR ANDHERI(E) MUMBAI-400 059 PAN-AABPD 7691P (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI VIJAY SHANKAR RESPONDENT BY: SHRI REEPAL TRALSHAWALA O R D E R PER ASHA VIJAYARAGHAVAN (JM) THIS APPEAL PREFERRED BY THE REVENUE IS DIRECTED AG AINST THE ORDER DATED 1.1.2010 PASSED BY THE LD. CIT(A)-31 FOR THE ASSESSMENT YEAR 2005-06. 2. THE LD. COUNSEL FOR THE ASSESSEE SHRI VIJAY REEP AL TRALSHAWALA POINTED OUT THAT BY INSTRUCTION NO. 3 DT. 9.2.2011 THE MONETARY LIMIT FOR FILING THE DEPARTMENTAL APPEAL BEFORE THE APPELLATE TRIBUNAL HAS BEEN FIXED AT RS. 3 LACS I.E. TO SAY THAT DEPARTMENT APP EALS SHALL NOT BE FILED IN CASES WHERE THE TAX EFFECT DOES NOT EXCEED THE MONE TARY LIMIT OF 3 LAKHS. THE LD. COUNSEL ALSO SUBMITTED THE WORKING OF TAX E FFECT IN THE PRESENT CASE WHICH CAME TO RS. 2 65 856/-. 3. THE LD. DEPARTMENTAL REPRESENTATIVE SHRI VIJAY S HANKAR OBJECTED TO THE LD. COUNSELS PLEA. THE LD. DR FURTHER RE LIED ON THE DECISION OF CIT VS CHHAJER PACKAGING & PLASTICS PVT. LTD. 300 I TR 180. THE LD. DR ITA NO. 2460/M/10 2 FURTHER ARGUED THAT THE BOARDS INSTRUCTION IS TO BE APPLIED PROSPECTIVELY AND THAT IT MAKES NO REFERENCE TO PENDING MATTERS. 4. THE LD. COUNSEL FOR THE ASSESSEE ON THE OTHER HA ND RELIED ON THE DECISION OF THE BOMBAY HIGH COURT IN THE CASE OF CI T VS. MADHUKAR K. INAMDAR (HUF) 318 ITR 149 AND CIT VS PITHWA ENGG. WORKS 276 ITR 519 (BOM) . 5. WE HEARD BOTH THE PARTIES. THE CASE OF CIT VS CHHAJER PACKAGING & PLASTICS PVT. LTD.300 ITR 180 RELIED ON BY THE DR IS DISTINGUISHABLE FROM THE FACTS OF THE PRESENT CASE. AT PARA 12 PAG E 184 OF THE DECISION IN THE CASE OF CHHAJER PACKAGING & PLASTICS PVT. LTD. IT HAS BEEN HELD AS FOLLOWS: OTHERWISE ALSO PARAGRAPH 3 OF THIS CIRCULAR ITSELF SAVES CERTAIN APPEALS FROM BEING OBSTRUCTED DUE TO FINANCIAL LIMITS. PARAGRAPH 3 READS : THE BOARD HAS ALSO DECIDED THAT IN CASES INVOLVING SUBSTANTIAL QUESTION OF LAW OF IMPORTANCE AS WELL AS IN CASES WHERE THE SAME QUESTION OF LAW WILL REPEATEDLY ARISE EITHER IN THE CASE CONCERNED OR IN SIMILAR CASES SHOULD BE SEPARATELY CONSIDERED ON THE MERITS WITHOUT BEING H INDERED BY THE MONETARY LIMITS. IT IS EVIDENT THAT WHENEVER THERE IS A SUBSTANTIAL QUESTION OF LAW OR QUESTION OF LAW WHICH IS LIKELY TO RECUR IN FUTURE THE DEPARTM ENT IS NOT PROHIBITED FROM FILING AND PURSUING APPEALS. WE BELIEVE THAT THE SAVING C LAUSE SAVES THE PRESENT APPEAL SINCE IT INVOLVES A QUESTION OF LAW REGARDIN G INTERPRETATION OF SECTION 275(1)(C) OF THE ACT AND MORE PARTICULARLY THE AS PECT OF MANNER IN WHICH THE LIMITATION SHOULD BE COMPUTED IN THE LIGHT OF THE SAID PROVISIONS. WE HAVE THEREFORE PROCEEDED TO HEAR THE ADVOCATES ON THE MERITS. 6. IN OUR OPINION THE CASE OF CIT VS CHHAJER WAS WITH RESPECT TO INTERPRETATION OF 275 (1)(C) OF THE ACT AND HENCE C AME UNDER THE EXCEPTION CLAUSE UNDER THE CBDT CIRCULAR AND WAS NO T OBSTRUCTED BY THE MONETARY LIMIT OF RS. 3 LAKS PRESCRIBED BY THE CIRC ULAR. THEREFORE THE CASE OF 300 ITR 180 IS INAPPLICABLE TO THE FACTS OF OUR CASE. FURTHER INSTRUCTION NO. 5 DT. 15.5.2008 FIXING THE MONETARY LIMIT AT RS. 2 LAKHS IS ITA NO. 2460/M/10 3 SIMILAR TO THAT OF INSTRUCTION NO. 3 DT. 9.2.2011 W HICH THE ASSESSEE HAS BROUGHT TO OUR NOTICE IN SUPPORT OF HIS CONTENTION. SINCE BOTH THE INSTRUCTION NOS. 5 & 3 ARE IDENTICAL THE RATIO OF THE DECISION IN THE CASE OF CIT VS PITHWA ENGG. WORK WHICH DEALS WITH INSTR UCTION NO.5 DT. 15.5.2008 SHALL EQUALLY APPLY TO THE PRESENT CASE W HICH FALLS UNDER INSTRUCTION NO. 3 DT. 9.2.2011. FOLLOWING THE RATIO OF THE DECISION IN THE CASE OF CIT VS PITHWA ENGG. WORK WHEREIN IT HAS B EEN HELD THAT IN OUR VIEW THE BOARDS CIRCULAR DT. 27 TH MARCH 2000 IS VERY MUCH APPLICABLE EVEN TO THE OLD REFERENCES WHICH ARE STILL UNDECIDE D. WE DISMISS THE DEPARTMENTAL APPEAL ON THE GROUND THAT THE TAX EFFE CT IS LESS THAN 3 LAKHS. 6. IN THE RESULT THE APPEAL FILED BY THE REVENUE I S DISMISSED. ORDER PRONOUNCED ON THIS 28 TH DAY OF FEBRUARY 2011 SD/- SD/- ( P.M. JAGTAP) (ASHA VIJAYARAGHAVAN) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI DATED 28 TH FEBRUARY 2011 RJ COPY TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT-CONCERNED 4. THE CIT(A)-CONCERNED 5. THE DR A BENCH TRUE COPY BY ORDER ASSTT. REGISTRAR I.T.A.T MUMBAI ITA NO. 2460/M/10 4 DATE INITIALS 1 DRAFT DICTATED ON: 24 . 02 .201 1 SR. PS/PS 2. DRAFT PLACED BEFORE AUTHOR: 24 .02.2011 ______ SR. PS/PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER: _________ ______ JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER: _______ __ ______ JM/AM 5. APPROVED DRAFT COMES TO THE SR. PS/PS: _________ ______ SR. PS/PS 6. KEPT FOR PRONOUNCEMENT ON: _________ ______ SR. PS/PS 7. FILE SENT TO THE BENCH CLERK: _________ ______ SR. PS/PS 8. 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK: DATE ON WHICH FILE GOES TO AR _________ ______ 10 . DATE OF DISPATCH OF ORDER: _________ ______