ITO(E), Delhi v. Dr. Shroffs Charity, New Delhi

ITA 3705/DEL/2008 | 2005-2006
Pronouncement Date: 13-01-2010 | Result: Dismissed

Appeal Details

RSA Number 370520114 RSA 2008
Bench Delhi
Appeal Number ITA 3705/DEL/2008
Duration Of Justice 1 year(s) 27 day(s)
Appellant ITO(E), Delhi
Respondent Dr. Shroffs Charity, New Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 13-01-2010
Appeal Filed By Department
Order Result Dismissed
Bench Allotted G
Tribunal Order Date 13-01-2010
Date Of Final Hearing 13-01-2010
Next Hearing Date 13-01-2010
Assessment Year 2005-2006
Appeal Filed On 17-12-2008
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH G DELHI) BEFORE SHRI A.D. JAIN AND SHRI K.D. RANJAN ITA NO. 3705(DEL)2008 ASSESSMENT YEAR: 2005-06 INCOME TAX OFFICER(EXEMPTIONS) DR. SHROFFS CH ARITY EYE HOSPITAL TRUST WARD III LAXMI NAGAR V. KEDAR NATH R OAD DARYA GANJ DISTT. CENTRE DELHI. NEW DELHI-2. (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI KISHORE B. SR. DR RESPONDENT BY: SHRI AVDHESH BANSAL CA ORDER PER A.D. JAIN J.M. THIS IS AN APPEAL FILED BY THE REVENUE FOR THE AS SESSMENT YEAR 2005-06 TAKING THE FOLLOWING GROUNDS:- 1. THAT THE INCOME TAX OFFICER(E) TRUST WARD-III NEW DELHI HAS GROSSLY ERRED ON FACTS AND IN LAW IN HOLDING TH AT INCOME OF RS. 6 27 840/- BEING SURPLUS FROM THE OPTICAL SHOP AND MISC.INCOME ARE INCOME FROM BUSINESS AND ALLEGING T HAT NO SEPARATE ACCOUNT U/S 11 (4A) OF THE I.T. ACT HAVE B EEN MAINTAINED AND CHARGING TAX ON THE SAME. ITA 3705(DEL)2008 2 2. THAT THE ASSESSMENT ORDER U/S 143(3) PASSED BY THE ITO(E) TRUST WARD-III NEW DELHI IS ILLEGAL AND VOID AB IN ITIO. 3. THAT THE APPELLANT MAY PLEASE BE PERMITTED TO AMEND OR ALTER ANY OF THE FOREGOING GROUNDS OR TO ADDUCE ANY ADDITIONAL GROUND AT OR BEFORE THE TIME OF HEARING. 2. IT IS OBSERVED FROM THE ORDER OF CIT(A) THAT TOT AL TAX EFFECT OF PRESENT APPEAL IS LESS THAN RS. 2 LAKHS. IN VIEW OF C.B.D. T. INSTRUCTIONS NO. 2 DATED 24.10.2005 THE DEPARTMENT SHOULD NOT HAVE FILED TH E APPEAL BEFORE THE TRIBUNAL. FOR THIS PURPOSE RELIANCE MAY BE PLACED ON THE DECISION ITAT DELHI BENCH IN CASE OF SHRI VIKRAM BHATNAGAR ITA N O. 60/D/2002 ORDER DATED 10-3-2006. 3. HONBLE BOMBAY HIGH COURT IN THE CASE OF PITHWA ENGG. WORKS (276 ITR 519) HAVE OBSERVED AS UNDER: ONE FAILS TO UNDERSTAND HOW THE REVENUE CAN CONTEN D THAT SO FAR AS NEW CASES ARE CONCERNED THE CIRCULAR ISSUED BY THE BOARD IS BINDING ON THEM AND IN COMPLIANCE WITH THE SAID INSTRUCTIONS THEY DO NOT FILE REFERENCES IF THE TAX EFFECT IS LE SS THAN RS.2 LAKHS. BUT THE SAME APPROACH IS NOT ADOPTED WITH RESPECT T O THE OLD REFERRED CASES EVEN IF THE TAX EFFECT IS LESS THAN RS.2 LAKHS. IN OUR VIEW THERE IS NO LOGIC BEHIND THIS APPROACH. THIS COURT CAN VERY WELL TAKE JUDICIAL NOTICE OF TH E FACT THAT BY PASSAGE OF TIME MONEY VALUE HAS GONE DOWN THE COST OF LITIGATION EXPENSES HAS GONE UP THE ASSESSEES ON THE FILE OF THE DEPARTMENTS HAVE INCREASED; CONSEQUENTLY THE BURDEN ON THE DEP ARTMENT ALSO ITA 3705(DEL)2008 3 INCREASED TO A TREMENDOUS EXTENT. THE CORRIDORS OF THE SUPERIOR COURTS ARE CHOKED WITH HUGE PENDENCY OF CASES. IN T HIS VIEW OF THE MATTER THE BOARD HAS RIGHTLY TAKEN A DECISION NOT TO FILE REFERENCES IF THE TAX EFFECT IS LESS THAN RS. 2 LAKHS. THE SAM E POLICY FOR OLD MATTERS NEEDS TO BE ADOPTED BY THE DEPARTMENT. IN O UR VIEW THE BOARDS CIRCULAR DATED MARCH 27 2000 IS VERY MUCH APPLICABLE EVEN TO THE OLD REFERENCES WHICH ARE STILL UNDECIDE D. THE DEPARTMENT IS NOT JUSTIFIED IN PROCEEDING WITH THE OLD REFERENCES WHEREIN THE TAX IMPACT IS MINIMAL. THUS THERE IS N O JUSTIFICATION TO PROCEED WITH DECADES OLD REFERENCES HAVING NEGLIGIB LE TAX EFFECT. 4. IT IS ALSO SEEN THAT RECENTLY THE HONBLE JURI SDICTIONAL HIGH COURT VIDE THEIR ORDER DATED 1.8.2007 IN ITA NO. 683/2007 IN THE CASE OF CIT V. MANISH BHAMBRI HAVE UPHELD THE ORDER OF TRIBUNAL VI DE WHICH THE APPEAL FILED BY THE REVENUE WAS REFUSED TO BE ENTERTAINED BECAUSE OF LOW TAX EFFECT. THE SAID ORDER OF HONBLE JURISDICTIONAL HIGH COURT IS REPRODUCED BELOW FOR THE SAKE OF CONVENIENCE:- THE REVENUE IS AGGRIEVED BY AN ORDER DATED 8TH AUGU ST 2006 PASSED BY THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH 'D' IN IT(SS) NO. 513/DEL/2003 RELEVANT FOR THE BLOCK PERIOD 1ST APRI L 1990 TO 14TH FEBRUARY 2001. THE QUESTION THAT AROSE BEFORE THE ASSESSING OFFICE R WAS WITH REGARD TO CERTAIN DEPOSITS IN THE BANK ACCOUNT OF THE ASSESSE E AND SINCE THE AMOUNTS WERE NOT EXPLAINED TAX WAS LEVIED. IN APPEAL THE COMMISSIONER OF INCOME TAX (APPEALS) ACCEPTED THE VIEW CANVASSED BY THE ASSESSEE AND HELD THAT THE EXPLANA TION GIVEN BY HIM WAS ACCEPTABLE AND IN ANY CASE THE ASSESSEE CANNOT BE EXPECTED TO RECOLLECT EACH AND EVERY ENTRY MADE IN THE BANK. ITA 3705(DEL)2008 4 IT MAY BE MENTIONED THAT THE AMOUNT IN DISPUTE IS R S.30 000/- FOR THE ASSESSMENT YEAR 1999-2000 AND RS.83 000/- FOR THE A SSESSMENT YEAR 2001- 2002. IT MAY ALSO BE MENTIONED THAT FOR THE ASSESSM ENT YEAR 1999-2000 THE ASSESSING OFFICER HAS ALREADY ACCEPTED THE EXPLANAT ION WITH REGARD TO A GIFT OF RS.60 000/-. AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) -AN APPEAL WAS FILED BEFORE THE INCOME TAX APPELLATE TRIBUNAL. THE TRIBUNAL FOUND THAT IN VIEW OF INSTRUCTIONS ISSUED BY THE CBDT WHE RE THE TAX EFFECT IS LESS THAN RS.L LAC THE DEPARTMENT SHOULD NOT FILE AN AP PEAL BEFORE THE TRIBUNAL. IN THE PRESENT CASE THE TAX EFFECT IS LESS THAN RS .L LAC. UNDER THE CIRCUMSTANCES THE TRIBUNAL DID NOT ENTERTAIN THE A PPEAL. THE REVENUE FEELING AGGRIEVED BY THE DECISION OF T HE TRIBUNAL HAS COME UP BEFORE US UNDER SECTION 260A OF THE INCOME TAX A CT 1961. IT IS CONTENDED BY LEARNED COUNSEL FOR THE REVENUE THAT T HE TRIBUNAL IS A FACT FINDING AUTHORITY AND SHOULD HAVE ADJUDICATED THE M ATTER ON MERITS. WE ARE OF THE VIEW THAT THE ISSUE RAISED BY THE REVENUE IS NOT AT ALL SUBSTANTIAL AND THE AMOUNT IN DISPUTE IS QUITE INSIGNIFICANT CONSI DERING THAT THE CASE IS ONE OF A BLOCK ASSESSMENT. THERE IS NO JUSTIFICATION FO R THE INCOME TAX DEPARTMENT TO GO ON BURDENING THE TRIBUNAL THE COU RT WITH EVERY CASE RIGHT UP TO THE END. APART FROM BURDENING THE TRIBU NAL AND COURTS IT ALSO CAUSES AVOIDABLE EXPENSES TO THE ASSESSEE. IT IS CO MMON KNOWLEDGE THAT THE ASSESSEE HAS TO PAY FOR LEGAL FEES AND MERELY BECAU SE THE INCOME TAX DEPARTMENT HAS GOT UNLIMITED RESOURCES THERE IS NO JUSTIFICATION THAT EVERY CASE SHOULD BE DRAGGED ON. UNDER THE CIRCUMSTANCES WE ARE OF THE VIEW THAT TH E TRIBUNAL WAS JUSTIFIED IN REFUSING TO ENTERTAIN THE APPEAL BECAUSE OF THE INSIGNIFICANT AMOUNT INVOLVED IN THE MATTER. NO SUBSTANTIAL QUESTION OF LAW ARISES. WE THEREFORE DISMISS THIS APPEAL. ITA 3705(DEL)2008 5 5. IN VIEW OF THE ABOVE DISCUSSIONS THE APPEAL FIL ED BY THE REVENUE IS DISMISSED BEING UNADMITTED ON ACCOUNT OF LOW TAX EFFECT. ORDER PRONOUNCED IN THE OPEN COURT ON 13.01.2010. SD/- SD/- (K.D. RANJAN) (A.D. JAIN) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 13.01.2010 *RM COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR TRUE COPY BY ORDER DEPUTY REGISTRAR