ITO, Ward - 40(3), Kolkata, Kolkata v. Shri Jayanta Saha, Kolkata

1 IN THE INCOME TAX APPELLATE TRIBUNAL 'B BENCH : KOLKATA (BEFORE HONBLE SRI B.R.MITTAL J.M. AND HON BLE SRI B.C.MEENA A.M.) I.T.A. NO. 492 /KOL/2010 ASSESSME NT YEAR : 2005-06 ITO WARD 40(3) KOLKATA VS SRI JAYANTA SAHA (PAN NO. BCZPS 2770 R) (APPELLANT) (RESPONDENT) APPELLANT BY : SMT JYOTI KUMARI. RESPONDENT BY : SRI SOUMITRA CHOWDHURY. O R D E R PER SHRI B.C.MEENA A.M. THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF THE CIT(A)- XXXVI KOLKATA DATED 21.12.2009 FOR THE ASSESSMEN T YEAR 2005-06. 2. GROUNDS RAISED ARE AS FOLLOWS : 1. THAT THE LD. CIT(A)-XXXVI KOLKATA ERRED IN DELETING THE ADDITION FOR RS.48 070/- 2. THAT THE LD. CIT(A)-XXXVI KOLKATA HAS VIOL ATED RULE 46A OF INCOME TAX RULES 1962 IN PASSING THE ORDER. 3. IN THIS APPEAL THE TAX EFFECT INVOLVED IS LESS T HAN RS. 2 LAKHS. 4. THE LD. D.R. WAS ASKED WHY THE APPEAL OF THE RE VENUE SHOULD NOT BE TREATED AS UNADMITTED IN VIEW OF THE CIRCULAR F. NO . 279/MISC.-64/05-ITJ DATED 24 TH OCTOBER 2005 AND THE DECISION OF THE HONBLE HIGH COURT IN THE CASE OF CIT VS. CAMCO COLOUR CO. [ 254 ITR 565 (BOM)] AND THE H ONBLE APEX COURT IN THE CASE OF COMMISSIONER OF CUSTOMS VS. INDIAN OIL CORP ORATION LTD. [ 267 ITR 272 (SC) ]. THE LD. D.R. CONTENDED THAT THE HONBLE PU NJAB & HARYANA HIGH COURT IN THE CASE OF RANI PALIWAL VS. CIT [268 ITR 220 ] AN D ALLAHABAD HIGH COURT IN THE CASE OF JUGAL KISHORE ARORA VS. DCIT [ 269 ITR 133 ] HAVE TAKEN THE VIEW THAT ONCE AN APPEAL IS FILED BY THE REVENUE THE TRIBUNA L SHOULD DISPOSE OF THE APPEAL ON MERITS AND THE ASSESSEE CANNOT RAISE THE OBJECTI ON AGAINST THE MAINTAINABILITY OF SUCH APPEAL. 2 5. WE HAVE CAREFULLY CONSIDERED THE ARGUMENTS OF BO TH THE PARTIES AND PERUSED THE MATERIAL PLACED BEFORE US. WE FIND THAT THE CB DT VIDE INSTRUCTION NO. 2/2005 DATED 24 TH OCTOBER 2005 ISSUES GUIDELINES TO THE REVENUE AUT HORITIES WITH REGARD TO FILING OF APPEAL BEFORE THE TRIBUNAL HIGH COURT AND SUPREME COURT. FROM THE ABOVE INSTRUCTION IT IS EVIDENT THAT SINCE 1987 T HE CBDT IS INSTRUCTING ITS OFFICERS NOT TO FILE THE APPEAL WHERE THE TAX EFFECT IS BELO W CERTAIN MONETARY LIMITS. VIDE INSTRUCTION NO. 1903 DATED 28 TH OCTOBER 1992 THE MONETARY LIMIT WAS REVISED UPWARD AND THE OFFICERS WERE DIRECTED NOT TO FILE THE APPEAL BEFORE THE INCOME-TAX APPELLATE TRIBUNAL WHERE THE TAX EFFECT WAS BELOW R S.25 000/-. THE ABOVE MONETARY LIMIT WAS FURTHER REVISED UPWARD BY INSTRU CTION NO. 1979 DATED 27 TH MARCH 2000 AND THE OFFICERS WERE DIRECTED NOT TO FI LE THE APPEAL TO ITAT WHERE THE TAX EFFECT IS BELOW RS. 1 LAC. THEREAFTER IN PARTI AL MODIFICATION OF THE ABOVE INSTRUCTION THE BOARD VIDE INSTRUCTION NO. 2/2005 DATED 24.10.2005 HAS FURTHER RAISED THE ABOVE MONETARY LIMIT TO RS.2 LAKHS WITH THE SAME DIRECTIONS. THUS THE CBDT SINCE 1987 HAS NOT ONLY TAKEN A CONSISTENT APP ROACH OF INSTRUCTING ITS OFFICERS FOR NOT FILING THE APPEAL WHERE THE TAX EF FECT IS BELOW THE MONETARY LIMIT BUT SUCH MONETARY LIMIT IS ALSO REVISED UPWARD FROM TIME TO TIME. THE CIRCULAR UNDER INSTRUCTION 1979 DATED 27.3.2006 WAS CONSIDER ED BY THE BONBAY HIGH COURT IN THE CASE OF CAMCO COLOUR CO. ( SUPRA ) 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 KNOWING FULLY WELL THAT THE CORR IDORS OF THE COURTS ARE 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 DIRECT TAXES WE ARE SATISFIED THA T THE BOARD HAS TAKEN A POLICY DECISION NOT TO FILE APPEAL IN A TYPE OF CAS E IN HAND AND THE SAME IS FINDING ON THE REVENUE (APPELLANT HEREIN). IN THE RESULT WE DISMISS THIS APPEAL ON THIS COUNT IN LIMINE WITH NO ORDER AS TO COSTS. 6. THE LD. D.R. HAS RELIED UPON THE CONTRARY DECISI ONS GIVEN BY THE HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF RANI PAL IWAL (SUPRA) AND ALLAHABAD HIGH COURT IN THE CASE OF JUGAL KISHORE ARORA ( SUP RA ). HOWEVER WE FIND THAT RECENTLY THE APEX COURT HAS CONSIDERED THE EFFECT O F CIRCULAR ISSUED BY THE CBDT 3 IN THE CASE OF COMMISSIONER OF CUSTOMS VS. INDIAN O IL CORPORATION LTD. REPORTED IN 267 ITR 272. THEIR LORDSHIPS EXAMINED THE EARLI ER DECISIONS OF THE APEX COURT WITH REGARD TO BINDING NATURE OF THE CIRCULAR AND L AID DOWN THE FOLLOWING PRINCIPLES AT PAGE 277 OF THE REPORTS:- THE PRINCIPLES LAID DOWN BY ALL THESE DECISIONS A RE - (1) ALTHOUGH A CIRCULAR IS NOT BINDING ON A COUR T OR 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 OPERATION THE REVENUE IS BOUND BY IT AND CANNOT BE ALLOWED TO PLEAD THAT IT IS NOT VALID NOR THAT IT IS CONTRARY TO THE TERMS OF THE STATUTE. (2) DESPITE THE DECISION OF THE COURT THE DEP ARTMENT 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 EXIS TING CIRCULARS OF THE BOARD ARE AB INITIO BAD. (4) IT IS NOT OPEN TO THE REVENUE TO ADVANCE AN ARG UMENT OR FILE AN APPEAL CONTRARY TO THE CIRCULARS. ( EMPHASIS SUPPLIED ) FROM THE ABOVE IT IS EVIDENT THAT THE HONBLE APEX COURT HAS LAID DOWN THAT IT IS NOT OPEN TO THE REVENUE TO ADVANCE AN ARGUMENT OR F ILE AN APPEAL CONTRARY TO THE CIRCULAR. THE APPEAL UNDER CONSIDERATION HAS CERT AINLY BEEN FILED CONTRARY TO THE CIRCULAR ISSUED BY THE CBDT VIDE CIRCULAR F. NO. 27 9/MISC-64/05-ITJ DATED 24 TH OCTOBER 2005. THEREFORE THE ABOVE DECISION OF TH E HONBLE APEX COURT WOULD BE SQUARELY APPLICABLE. EVEN OTHERWISE THE REVENUE HAS BEEN TAKING A CONSISTENT APPROACH SINCE 1987 NOT TO FILE APPEAL WHERE THE RE VENUE EFFECT IS BELOW CERTAIN MONETRARY LIMIT TO REDUCE THE LITIGATION PENDING BE FORE THE TRIBUNAL AND THE COURTS. IF THE APPEALS CONTRARY TO SUCH CIRCULAR A RE ADMITTED IT WOULD FRUSTRATE THE PURPOSE OF ISSUING SUCH INSTRUCTIONS. IN THE ABOVE CIRCUMSTANCES WE RESPECTFULLY FOLLOWING THE DECISION OF THE HONBLE APEX COURT IN THE CASE OF INDIAN OIL CORPORATION LTD. (SUPRA) AND THE BOMBAY HIGH COURT IN THE CASE OF CAMCO COLOUR CO. ( SUPRA ) HOLD THAT THE REVENUE SHOULD NOT HAV E FILED THE APPEAL CONTRARY TO THE CIRCULAR BY THE CBDT. ACCORDINGLY THE SAME IS NOT ADMITTED AND BEING DISMISSED IN LIMINE. 4 7. IN THE RESULT DEPARTMENTAL APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 23.04.2010 SD/- SD/- (B.R.MITTAL ) (B.C.MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 23.04.2010. COPY FORWARDED TO :- 1) ITO WARD 40(3) KOLKATA. 2) SRI JAYANTA SAHA P-129 CIT ROAD KOLKATA-70 0 001. 3) CIT(A) KOLKATA. 4) CIT KOLKATA. 5) D.R. ITAT KOLKATA. BY ORDER ASSISTANT REGISTRAR I.T.AT. KOLKATA. BCD