ITO, Ward 1(3), Nashik v. Late Shri Ramesh Murlidhar Joshi through L/H Smt. Pushpa Ramesh Joshi,, Nashik

ITA 320/PUN/2013 | 2005-2006
Pronouncement Date: 27-11-2014 | Result: Dismissed

Appeal Details

RSA Number 32024514 RSA 2013
Assessee PAN AAKPJ5902C
Bench Pune
Appeal Number ITA 320/PUN/2013
Duration Of Justice 1 year(s) 9 month(s) 26 day(s)
Appellant ITO, Ward 1(3), Nashik
Respondent Late Shri Ramesh Murlidhar Joshi through L/H Smt. Pushpa Ramesh Joshi,, Nashik
Appeal Type Income Tax Appeal
Pronouncement Date 27-11-2014
Appeal Filed By Department
Order Result Dismissed
Bench Allotted A
Tribunal Order Date 27-11-2014
Date Of Final Hearing 27-11-2014
Next Hearing Date 27-11-2014
Assessment Year 2005-2006
Appeal Filed On 01-02-2013
Judgment Text
INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B PUNE BEFORE SHRI R.S. PADVEKAR JUDICIAL MEMBER AND SHRI R.K. PANDA ACCOUNTANT MEMBER ITA NO. 320/PN/2013 (ASSESSMENT YEAR 2005-06) ITO WARD-1(3) NASHIK .. APPELLANT VS. LATE SHRI RAMESH MURLIDHAR JOSHI THROUGH LEGAL HEIR SMT. PUSHPA RAMESH JOSHI 480/8/0 JOSHI SADAN OPP : KBH HIGH SCHOOL SHARANPUR ROAD NASHIK PAN NO. AAKPJ5902C .. RESPONDENT ASSESSEE BY : SHRI NIKHIL PATHAK DEPARTMENT BY : SHRI MAZHAR AKRAM DATE OF HEARING : 27-11-2014 DATE OF PRONOUNCEMENT : 27-11-2014 ORDER PER R.K. PANDA AM : THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAINS T THE ORDER DATED 02-11-2012 OF THE CIT(A)-I NASHIK RELA TING TO ASSESSMENT YEAR 2005-06. 2. GROUNDS RAISED BY THE REVENUE AREA AS UNDER : 1. WHETHER ON THE FACTS OF THE CASE THE CIT(A) WAS J USTIFIED IN QUASHING THE PROCEEDINGS U/S.147 EVEN THOUGH THE PROCE EDINGS WERE DULY INITIATED AS PER LAW AND PROVISIONS. 2. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O THE CASE THE LD.CIT(A)-I NASHIK WAS JUSTIFIED IN DELETING THE DISAL LOWANCE MADE ON ACCOUNT OF ACCRUED INTEREST OF RS.9 96 892/- ON FIXED DEPOSIT. 3. THE APPELLANT PRAYS THAT THE ORDER OF THE AO MAY BE RESTORED. 4. THE APPELLANT PRAYS LEAVE TO ADD ALTER CLARIFY AMEND AND OR WITHDRAW ANY GROUNDS OF APPEAL AS AND WHEN THE OCCASIO N DEMANDS. 2 3. THE LD. COUNSEL FOR THE ASSESSEE AT THE OUTSET S UBMITTED THAT THE TAX EFFECT IN THE ABOVE APPEAL FILED BY TH E REVENUE IS ONLY RS.3 55 555/- WHICH IS LESS THAN THE REVISED M ONETARY LIMIT PRESCRIBED BY THE CBDT VIDE INSTRUCTION NO.05/2014 DATED 10-07- 2014 AT RS.4 LAKHS. REFERRING TO THE DECISION OF T HE HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. SMT VIJAYA V. KAVEKAR REPORTED IN 350 ITR 237 HE SUBMITTED THAT IN VIEW O F THE RATIO OF THE DECISION OF THE HONBLE BOMBAY HIGH COURT THE R EVISED INSTRUCTION NO.05/2014 ISSUED BY THE CBDT REVISING THE MONETARY LIMIT WILL BE APPLICABLE EVEN TO PENDING CASES. HE ACCORDINGLY SUBMITTED THAT SINCE THE TAX EFFECT IS LESS THAN RS .4 LAKHS THEREFORE THE APPEAL FILED BY THE REVENUE SHOULD B E DISMISSED. 4. THE LD. DEPARTMENTAL REPRESENTATIVE ON THE OTHER HAND STRONGLY OBJECTED TO SUCH ARGUMENTS. HE SUBMITTED THAT THE SAID CBDT INSTRUCTION IS APPLICABLE ONLY TO THE APPEALS FILED ON OR AFTER THE DATE OF SUCH INSTRUCTION. 5. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY B OTH THE SIDES PERUSED THE ORDERS OF THE ASSESSING OFFICER AND THE CIT(A) AND THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. THIS APPEAL HAS BEEN FILED BY THE REVENUE ON 01-02-2013. THERE IS NO DISPUTE TO THE FACT THAT THE TAX EFFECT IN THE INST ANT CASE IS LESS THAN RS. 4 LAKHS AND TO BE PRECISE IT IS ONLY RS.3 01 003/-. WE FIND AN IDENTICAL ISSUE HAD COME UP BEFORE THE TRIB UNAL IN THE CASE OF SHRI SANJAY PRABHAKAR JUNNARKAR VIDE ITA NO.791/ PN/2013 ORDER DATED 26-11-2014 WHERE ONE OF US (AM) IS A PA RTY. THE 3 RELEVANT OBSERVATIONS OF THE TRIBUNAL WHILE DISMISS ING THE APPEAL FILED BY THE REVENUE ON THE ISSUE OF MONETARY LIMIT ARE AS UNDER : 4. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE REVENUE IS IN APPEAL AGAINST THE RELIEF GRANTED T O THE ASSESSEE BY THE CIT(A) IN RESPECT OF ADDITION MADE BY THE ASSESSING OFFICER. THE ASSESSING OFFICER HAD MADE THE ADDITION WHILE COMPLETIN G ASSESSING PROCEEDINGS UNDER SECTION 143(3) OF THE ACT WHICH IN TURN DELETED BY THE CIT(A) AS UNDER:- PARTICULARS AMOUNT DEPOSIT EXPENSES FOR BUSINESS ASSOCIATES 5 58 948 PROVISION FOR VAT AND OTHER TAXES 2 00 000 EXPENSES FOR FRANCHISEE DEVELOPMENT 2 67 640 EXPENSES FOR MLM DEVELOPMENT 2 67 640 LAPTOP/IT SOLUTION EXPENSES 90 000 TOTAL 11 48 931 5. THE REVENUE HAD FILED APPEAL AGAINST SUCH DELETIO N OF ABOVE ADDITION BY THE CIT(A). WHEN THE MATTER WAS TAKEN UP FOR HEARING IT WAS POINTED OUT BY THE LEARNED AUTHORIZED REPRESENTAT IVE FOR THE ASSESSEE THAT AS PER CBDT INSTRUCTION NO.5 OF 2014 DATED 10.07.2014 THE APPEAL FOR THE YEAR IS NOT MAINTAINABLE. 6. UNDER THE PROVISIONS OF SECTION 268(1) OF THE ACT THE CBDT IS EMPOWERED TO ISSUE INSTRUCTIONS FIXING THE MONETARY LIM ITS FOR THE REVENUE TO FILE APPEALS BEFORE THE TRIBUNAL ALL TH E HIGH COURTS AND THE SUPREME COURT. THE CBDT FROM TIME TO TIME ISSUES INST RUCTIONS FIXING THE MONETARY LIMITS WITH THE OBJECT OF NOT BURDENING THE COURTS AND THE TRIBUNAL WITH MATTERS WHERE THE TAX EFFECT WAS ON A L OWER SIDE. THE CBDT VIDE INSTRUCTION NO.5 OF 2014 ISSUED ON 10.07.20 14 HAD REVISED THE EARLIER INSTRUCTION NO.3 OF 2011 DATED 09.02.20 11 WHEREIN THE MONETARY LIMITS AND OTHER CONDITIONS FOR FILING THE D EPARTMENTAL APPEALS IN INCOME TAX MATTERS BEFORE THE APPELLATE TR IBUNALS HIGH COURTS AND SUPREME COURT WERE SPECIFIED. THE INSTRUCT IONS ISSUED ON 10.07.2014 WERE IN SUPERSESSION OF THE EARLIER INSTRUCTI ONS AND THE MONETARY LIMITS HAVE BEEN ENHANCED BY THE PRESENT INST RUCTION AND IT HAS BEEN PROVIDED THAT THE APPEALS SHALL NOT BE FILED IN CASES WHERE THE TAX EFFECT DOES NOT EXCEED THE MONETARY LIMITS GIVEN HEREUNDER: S NO APPEALS IN INCOME-TAX MATTERS MONETARY LIMIT (I N RS) 1. BEFORE APPELLATE TRIBUNAL 4 00 000/- 2. U/S 260A BEFORE HIGH COURT 10 00 000/- 3. BEFORE SUPREME COURT 25 00 000/- 7. THE REVISED MONETARY LIMIT FOR FILING THE APPEALS BEFORE THE APPELLATE TRIBUNAL WAS FIXED AT IN EXCESS OF RS.4 LACS. FURTHER UNDER THE SAID INSTRUCTION IT WAS ALSO DIRECTED THAT THE ASSESSING O FFICER SHALL CALCULATE THE TAX EFFECT SEPARATELY FOR EVERY ASSESSMEN T YEAR IN RESPECT OF THE DISPUTED ISSUES. IN CASE OF EVERY ASSESSEE WHERE TH E DISPUTED ISSUE ARISES IN MORE THAN ONE ASSESSMENT YEAR IT WAS DIRECT ED THAT APPEAL COULD BE FILED IN RESPECT OF SUCH ASSESSMENT YEAR OR YEARS IN WHICH THE TAX EFFECT IN RESPECT OF THE DISPUTED ISSUE EXCEEDED THE 4 MONETARY LIMIT FIXED. IN OTHER WORDS AND HENCEFORTH THE APPEALS CAN BE FILED ONLY WITH REFERENCE TO THE TAX EFFECT IN THE RELEVANT ASSESSMENT YEAR. IN CASE OF COMPOSITE ORDER OF ANY HIGH COURT O R APPELLATE AUTHORITY IT WAS FURTHER CLARIFIED THAT IF THE APPE AL IS TO BE FILED IN RESPECT OF THE YEAR/S IN WHICH TAX EFFECT EXCEEDS THE MONETARY LIMIT PRESCRIBED THEN SUCH APPEALS COULD ALSO BE FILED IN RE SPECT OF ALL SUCH ASSESSMENT YEARS EVEN IF THE TAX EFFECT IS LESS THAN PRESCRI BED MONETARY LIMITS. 8. IN THE FACTS OF THE PRESENT CASE THE REVENUE HAD F ILED THE APPEALS ON 04.04.2013. ADMITTEDLY IN ALL THE YEARS UNDER A PPEAL THE TAX EFFECT IS LESS THAN RS.4 LACS AS PRESCRIBED IN INSTRUCTION NO.5 OF 2014 ISSUED BY THE CBDT. AT THE TIME OF HEARING OF THE APPEALS TH E MONETARY LIMITS PRESCRIBED BY THE CBDT STAND REVISED BY THE SAID INSTRUC TION NO.5 OF 2014 DATED 10.07.2014 UNDER WHICH IT HAS BEEN PROV IDED THAT WHERE THE TAX EFFECT DOES NOT EXCEED RS.4 LACS IN ANY OF TH E ASSESSMENT YEARS THEN NO APPEALS CAN BE FILED BEFORE THE APPELLATE T RIBUNAL. THE ISSUE ARISING BEFORE US IS WHETHER THE SAID REVISED INSTRUCTION S WHICH WERE ISSUED SUBSEQUENT TO THE FILING OF THE APPEALS BY THE RE VENUE COULD BE APPLIED TO THE PENDING APPEALS OR APPLICABLE ONLY TO THE NEW CASES TO BE FILED BY THE REVENUE AFTER THE DATE OF ISSUE OF THE I NSTRUCTIONS. 9. WE FIND THAT THE SAID ISSUE HAS BEEN CONSIDERED BY TH E HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. SMT. VIJAYA V. KAVEKAR (SUPRA). THE HONBLE HIGH COURT IN THE CASE OF CIT VS. SMT. VI JAYA V. KAVEKAR (SUPRA) HAD IN TURN FOLLOWED THE RATIO LAID DOWN BY ANOTHER DIVISION OF BOMBAY HIGH COURT IN THE CASE OF CIT VS. POLYCOTT COR PORATION REPORTED IN (2009) 318 ITR 144 (BOM) WHEREIN IT WAS HELD AS U NDER:- 8. IN CASE OF 'COMMISSIONER OF INCOME TAX V/S POLYC OTT CORPORATION' REPORTED AT '(2009) 318 ITR 144 (BOM) A ANOTHER DI VISION BENCH OF THIS COURT CONSTRUED THE SAME INSTRUCTION NO. 2 OF 2005 DATED 24TH OCTOBER 2005. THE DIVISION BENCH OBSERVED WHILE CONSTRUING THE PARAGRAPH NO. 5 OF THE CIRCULAR AS THUS : '9. HAVING CONSIDERED THE CONTENTIONS IN OUR OPINI ON THE INSTRUCTIONS CANNOT BE INTERPRETED AS A STATUTE THOUGH IT IS PUR SUANT TO THE POWER CONFERRED UNDER SECTION 268A OF THE IT ACT. WHAT TH E COURT HAS TO CONSIDER IS THE PLAIN LANGUAGE OF THE PARA AND THE OBJECT BEHIND THE SAID PROVISIONS. THE OBJECT APPEARS TO BE NOT TO BURDEN COURTS AND TRIBUNALS IN RESPECT OF MATTERS WHERE THE TAX EFFECT IS LESS THAN THE LIMIT PRESCRIBED. EVEN BEFORE THIS INSTRUCTION CBDT HAS BEEN ISSUING INSTRUCTIONS THE LAST ONE BEING ON 24TH OCT. 2005 WHERE THE MONETARY LIM IT HAS BEEN FIXED. IN THOSE INSTRUCTIONS THE ONLY EXCEPTION HAD BEEN THAT IN CASES INVOLVING SUBSTANTIAL QUESTION OF LAW OF IMPORTANCE AS WELL A S IN CASES WHERE THE SAME QUESTION OF LAW WILL REPEATEDLY ARISE EITHER IN THE CASE CONCERNED OR IN SIMILAR CASE APPEAL SHOULD BE FILED WITHOUT BEI NG HINDERED BY THE MONETARY LIMITS. THE PRESENT INSTRUCTIONS SEEM EVEN TO LIMIT THE ISSUES INSOFAR AS THE SAME QUESTION OF LAW OR RECURRING IS SUE EXCEPT TO THE EXTENT PROVIDED IN PARA 5. ON A PROPER READING OF PARA 5 OF THE INSTRUCTIONS I T WOULD BE CLEAR THAT A DUTY IS CAST ON THE AO THAT EVEN IF THE DISPUTED QU ESTIONS ARISE FOR MORE THAN ONE ASSESSMENT YEAR THEN AN APPEAL SHOULD BE F ILED ONLY IN RESPECT OF THOSE YEARS WHERE THE MONETARY LIMIT AS SPECIFIED I N PARA 3 OF THE INSTRUCTION. THE EXCEPTION HOWEVER IS CARVED OUT I N RESPECT OF A COMPOSITE ORDER OF THE HIGH COURT OR APPELLATE AUTH ORITY. IN OTHER WORDS WHERE THE HIGH COURT OR TRIBUNAL HAS PASSED A COMPO SITE ORDER IN RESPECT 5 OF THE SAME ASSESSEE ON THE SAME QUESTION AND/OR ON DIFFERENT QUESTION AND FOR ONE OF THE ASSESSMENT YEARS THE TAX EFFECT IS MORE THAN THE MONETARY LIMIT THEN THE APPEAL SHALL ALSO BE FILED IN RESPECT OF ALL THE ASSESSMENT YEARS. THE SUBMISSION ON BEHALF OF THE A SSESSEE IS THAT THE COMPOSITE ORDER MUST RELATE TO A COMMON ISSUE. WE B EG TO DISAGREE ON A PLAIN AND LITERAL CONSTRUCTION OF THE INSTRUCTION. THE EXPRESSION 'WHICH INVOLVES MORE THAN ONE YEAR' WOULD HAVE NO MEANING IF IT WAS RESTRICTED ONLY TO THE EXPRESSION 'COMMON ISSUES'. THE EXPRESS ION THEREFORE OF A COMPOSITE ORDER WILL HAVE TO BE READ TO MEAN AN ORD ER IN RESPECT OF THE SAME ASSESSEE FOR MORE THAN ONE YEAR. AN (ORDER) DI SPOSING OF SEVERAL APPEALS ON A COMMON QUESTION OF LAW BY APPELLATE AU THORITY CANNOT BE SAID TO BE A COMPOSITE ORDER AS THE ORDER INVOLVES APPEALS BY DIFFERENT PERSONS WHICH APPEALS FOR THE SAKE OF CONVENIENCE HAVE BEEN ONLY CLUBBED TOGETHER FOR THE PURPOSE OF DISPOSAL ON THA T ISSUE. IN OUR OPINION THIS WOULD BE THE CORRECT READING OF PARA 5 OF THE INSTRUCTION.' 10. THE HONBLE BOMBAY HIGH COURT FURTHER HELD AS U NDER:- 15. THE POSITION OF LAW THEREFORE EMERGING FROM THE AFORESAID JUDGEMENTS IS THAT THE CIRCULARS OR INSTRUCTIONS I SSUED UNDER SECTION 268A OF THE INCOME TAX ACT BY THE CENTRAL BOARD OF D IRECT TAXES ARE APPLICABLE NOT ONLY TO NEW CASES BUT TO PENDING CAS ES AS WELL. SUCH CIRCULARS HAVE BEEN ISSUED UNDER SECTION 268A OF TH E INCOME TAX ACT WHICH IS AN EXCEPTION TO THE PROVISIONS OF SECTION 2 60 OF THE ACT. THE CBDT BEING MINDFUL OF THIS POSITION HAS ISSUED THE AFORESAID INSTRUCTIONS. IN OUR OPINION THEREFORE THE INSTRUCTIONS WOULD B E APPLICABLE TO PENDING CASES AS WELL. WE HAVE ALREADY FOUND THAT THE INSTR UCTION NO. 5 OF 2008 AND INSTRUCTION NO. 3 OF 2011 ARE PARA-MATERIA. THE INSTRUCTION NO. 5 OF 2008 HAS ALREADY BEEN INTERPRETED BY THIS COURT IN CIT V/S MADHUKAR INAMDAR (SUPRA). IT IS NOT DISPUTED THAT THIS JUDGE MENT HAS NOT BEEN CHALLENGED BY THE REVENUE AND THEREFORE STILL HOLDS THE FIELD. 11. FOLLOWING THE ABOVE SAID PROPOSITION LAID DOWN BY THE HONBLE HIGH COURT IN THE CASE OF CIT VS. SMT. VIJAYA V. KAVE KAR (SUPRA) WE HOLD THAT IN VIEW OF THE REVISED INSTRUCTION ISSUED BY THE CBDT UNDER WHICH THE MONETARY LIMIT FOR FILING THE APPEALS BEFORE THE APPELLATE AUTHORITIES TRIBUNALS HAS BEEN REVISED AND FIXED AT RS. 4 LACS I.E. ONLY APPEALS WITH TAX EFFECT EXCEEDING RS.4 LACS WERE MAINT AINABLE. IN THE PRESENT APPEAL FILED BY THE REVENUE THE MONETARY LI MIT ADMITTEDLY IS LESS THAN RS.4 LACS. IN VIEW OF INSTRUCTION NO.5 OF 20 14 WHICH ARE APPLICABLE NOT ONLY TO THE NEW APPEALS TO BE FILED B Y THE REVENUE BUT ALSO TO THE APPEALS PENDING BEFORE THE TRIBUNAL WE D ISMISS THE APPEAL FILED BY THE REVENUE BECAUSE OF SMALL TAX EFFECT. 5.1 SINCE THE TAX EFFECT IN THE IMPUGNED APPEAL FIL ED BY THE REVENUE IS ADMITTEDLY BELOW RS.4 LAKHS THEREFORE IN VIEW OF THE DECISION OF THE COORDINATE BENCH OF THE TRIBUNAL CI TED (SUPRA) WE HOLD THAT THE CBDT INSTRUCTION NO.05/2014 RAISING T HE MONETARY LIMIT FOR FILING OF APPEAL BY THE REVENUE TO RS. 4 LAKHS IS APPLICABLE TO THIS CASE ALSO EVEN THOUGH THE APPEAL HAS BEEN FILED 6 PRIOR TO THE DATE OF ISSUE OF SUCH INSTRUCTION REVI SING THE MONETARY LIMIT. THEREFORE THE APPEAL FILED BY THE REVENUE IS NOT MAINTAINABLE. ACCORDINGLY THE SAME IS DISMISSED. 6. IN THE RESULT THE APPEAL FILED BY THE REVENUE I S DISMISSED. PRONOUNCED IN THE OPEN COURT AT THE TIME OF HEARING ITSELF I.E. ON 27 TH DAY OF NOVEMBER 2014. SD/- SD/- (R.S. PADVEKAR) (R.K. PANDA) JUDICIAL MEMBER ACCOUNTANT MEMBER PUNE DATED: 27 TH NOVEMBER 2014 SATISH COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE 2. DEPARTMENT 3. CIT(A)-I NASHIK 4. CIT-I NASHIK 5. THE D.R B PUNE BENCH 6. GUARD FILE BY ORDER // TRUE COPY // ASSISTANT REGISTRAR ITAT PUNE BENCHES PUNE