ACIT, CC- XXVII, Kolkata, Kolkata v. Ramgopal Saraf, Kolkata

ITA 576/KOL/2011 | 2001-2002
Pronouncement Date: 20-07-2011 | Result: Dismissed

Appeal Details

RSA Number 57623514 RSA 2011
Assessee PAN AMAPS8233P
Bench Kolkata
Appeal Number ITA 576/KOL/2011
Duration Of Justice 3 month(s) 7 day(s)
Appellant ACIT, CC- XXVII, Kolkata, Kolkata
Respondent Ramgopal Saraf, Kolkata
Appeal Type Income Tax Appeal
Pronouncement Date 20-07-2011
Appeal Filed By Department
Order Result Dismissed
Bench Allotted C
Tribunal Order Date 20-07-2011
Assessment Year 2001-2002
Appeal Filed On 12-04-2011
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : KOLKATA [ . . . . . . . . . . . . . .. . ! ! ! ! ' ' ' ' ] [BEFORE HONBLE SHRI B. R. MITTAL JM & HONBLE SHRI SHRI S.V. MEHROTRA AM] #$ #$ #$ #$ / I.T.A. NO. 576/KOL/2011 %& '() %& '() %& '() %& '()/ // / ASSESSMENT YEAR : 2001-02 ASSTT. COMMISSIONER OF INCOME TAX -VS.- RAMGOPAL SARAF CC-XXVII KOLKATA. KOLKATA. [PAN : AMAPS 8233 P] [ + + + + /APPELLANT] [ -.+ -.+ -.+ -.+ / // / RESPONDENT] + + + + / FOR THE APPELLANT : / // / /SHRI P. P. SARKAR -.+ -.+ -.+ -.+ / FOR THE RESPONDENT : / // / / SHRI A. K. TIBREWAL 0 /O R D E R [ . . . . . .. . ! ! ! ! ] PER S.V. MEHROTRA AM THE DEPARTMENT HAS FILED THIS APPEAL FOR ASSESSMENT YEAR 2001-02 AGAINST ORDER OF CIT(A) CENTRAL-I KOLKATA DATED 31.01.2011. 2. THIS APPEAL HAS BEEN FILED BY THE DEPARTMENT ON 12.04.2011 THEREFORE IT IS GOVERNED BY INSTRUCTION NO.3/2011 (F. NO.279/MISC.142/2007-ITJ] DATED 09.02.2011 ISSUED BY C.B.D.T IN REGARD TO FILING OF APPEALS INTER ALIA BEFORE I.T .A.T. THE MONETARY LIMIT IN REGARD TO TAX EFFECT LA ID DOWN IN THE SAID INSTRUCTION FOR FILING APPEAL BEFO RE THE TRIBUNAL IS RS.3.00 LAKHS. ADMITTEDLY TAX EFFECT IN THE PRESENT APPEAL IS LESS THAN RS.3.00 L AKHS. 3. HOWEVER LD. DEPARTMENTAL REPRESENTATIVE SUBMITT ED THAT THIS APPEAL HAS BEEN PREFERRED BY THE DEPARTMENT BECAUSE LD. CIT(A) HELD THAT THE PROVISIONS OF SECTION 153A WERE NOT APPLICABLE ON THE GROUND THAT NO INCRIMINATING DOCU MENTS WERE FOUND. 4. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE P ARTIES. WE FIND THAT IN INSTRUCTION NO.3/2011 IN PARA 8 EXCEPTIONS HAVE BEEN PROVIDED WHERE APPEAL CAN BE PREFERRED BY THE DEPARTMENT EVEN IF TAX EFFECT IS LESS THAN RS.3.00 LAKHS. THE SAID PARA READS AS UNDER :- [ ITA NO. 576/KOL/2011] 2 8. ADVERSE JUDGMENTS RELATING TO THE FOLLOWING ISSUES SHOULD BE CONTESTED ON MERITS NOTWITHSTANDING THAT THE TAX EFFECT ENTAILED IS LES S THAN THE MONETARY LIMITS SPECIFIED IN PARA 3 ABOV E OR THERE IS NO TAX EFFECT. A. WHERE THE CONSTITUTIONAL VALIDITY OF THE PROVISIONS OF AN ACT OR RULE ARE UNDER CHALLENGE OR B. WHERE BOARD'S ORDER NOTIFICATION INSTRUCTION OR C IRCULAR HAS BEEN HELD TO BE ILLEGAL OR ULTRA VIRES OR C. WHERE REVENUE AUDIT OBJECTION IN THE CASE HAS BEEN ACCEPTED BY THE DEPARTMENT. ADMITTEDLY THE PRESENT APPEAL DOES NOT FALL UNDER ANY OF THE ABOVE MENTIONED EXCEPTIONS. THEREFORE THE APPEAL PREFERRED BY THE DEPARTMENT I S HIT BY INSTRUCTION NO.3/2011 DATED 09.02.2011. 5. IT IS SETTLED LAW THAT IN VIEW OF THE DECISION O F HONBLE APEX COURT IN THE CASE OF COMMISSIONER OF CUSTOMS VS. INDIAN OIL CORPORATION LTD. 267 ITR 272 (SC) THE DEPARTMENT CAN NOT BE PERMITTED TO TAKE A STAND CONTRARY TO THE IN STRUCTIONS ISSUED BY THE BOARD. 6. WE FIND THAT THE TRIBUNAL VIDE ITS ORDER DATED 1 1.04.2011 IN THE CASE OF ITO VS. SMT. NILIMA SINGH IN ITA NO.1629/KOL/2010 HAS INTER ALI A OBSERVED AS UNDER :- 2 IT IS OBSERVED THAT THE TAX EFFECT IN THIS APPEA L IS LESS THAN RS.2 LAKHS. HENCE THE LD. D.R. WAS ASKED AS TO WHETHER ANY OF THE EXCEPTIONS LAID DOWN IN PARA 8 OF CBDT CIRCULAR NO. 279/MISC.-64/05-ITJ DAT ED 24.10.05 READ WITH INSTRUCTION NO.5 OF 2008 DATED 15.05.2008 ARE APPLI CABLE TO CONSIDER THIS APPEAL ON MERITS. THE DEPARTMENT IN ABOVE INSTRUCTION DATE D 15.05.2008 HAS 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 AND THE SAME ARE 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. 3. LD. D.R. FAIRLY CONCEDED THAT NONE OF THE ABOVE CONDITIONS ARE APPLICABLE IN RESPECT OF THIS APPEAL. 4. THERE IS NO DISPUTE ON THE FACT THAT THE CBDT VI DE INSTRUCTION NO. 2/2005 DATED 24.10.2005 ISSUED GUIDELINES TO THE REVENUE AUTHORITIES WITH REGARD TO FILING OF APPEALS BEFORE THE TRIBUNAL HIGH COURT A ND THE SUPREME COURT. FROM THE SAID INSTRUCTIONS IT IS EVIDENT THAT SINCE 198 7 THE CBDT HAS BEEN INSTRUCTING ITS OFFICERS NOT TO FILE THE APPEAL WHERE THE TAX E FFECT IS BELOW CERTAIN MONETARY LIMITS. VIDE INSTRUCTION NO. 1903 DATED 28.10.1992 THE MONETARY LIMITS WAS REVISED UPWARD AND THE OFFICERS WERE DIRECTED NOT T O FILE APPEAL BEFORE THE [ ITA NO. 576/KOL/2011] 3 INCOME TAX APPELLATE TRIBUNAL WHERE THE TAX EFFECT WAS BELOW RS.25 000/-. THE ABOVE MONETARY LIMIT WAS FURTHER REVISED UPWARD BY INSTRUCTION NO.1979 DATED 27.3.2000 AND THE OFFICERS WERE DIRECTED NOT TO FIL E THE APPEAL TO ITAT WHERE THE TAX EFFECT IS BELOW RS. 1 00 000/-. THEREAFTER IN P ARTIAL MODIFICATION OF THE ABOVE INSTRUCTION THE BOARD VIDE INSTRUCTION NO.2/2005 D ATED 24.10.2005 HAS FURTHER RAISED THE ABOVE MONETARY LIMIT TO RS.2 00 000/- WI TH THE SAME DIRECTIONS. THUS THE C.B.D.T SINCE 1987 HAS NOT ONLY TAKEN A CONSIST ENT APPROACH OF INSTRUCTING ITS OFFICERS FOR NOT FILING THE APPEAL WHERE THE TA X EFFECT IS BELOW THE MONETARY LIMIT BUT SUCH MONETARY LIMIT IS ALSO REVISED UPWA RD FROM TIME TO TIME. THE CIRCULAR UNDER INSTRUCTION NO.1979 DATED 27-3-2000 WAS CONSIDERED BY THE 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 FLOODED WITH PENDING LITIGATIONS. THE PRESENTATION OF THIS APPEAL IS QUITE CONTRARY TO THE INSTRUCTION ISSUED IN THE CIRCULAR WHICH IS BINDIN G 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 CASE IN HA ND AND THE SAME IS BINDING ON THE REVENUE (APPELLANT HEREIN). IN THE RESULT WE D ISMISS THIS APPEAL ON THIS COUNT IN LIMINE WITH NO ORDER AS TO COSTS. 5. WE FIND THAT RECENTLY THE APEX COURT HAS CONSID ERED THE EFFECT OF CIRCULAR ISSUED BY THE CBDT IN THE CASE OF COMMISSIONER OF C USTOMS VS. INDIAN OIL CORPORATION LTD. 267 ITR 272. THEIR LORDSHIPS EXAMI NED THE EARLIER DECISIONS OF THE APEX COURT WITH REGARD TO BINDING OF THE CIRCUL AR AND LAID DOWN THE FOLLOWING PRINCIPLES AT PAGE 277 OF THE REPORTS- THE PRINCIPALS 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 CONTRARY TO A BINDING CIRCULAR BY THE BOARD. WHEN A CIRCULAR REMAINS IN OPERATION THE RE VENUE 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 THIS COURT THE DEPARTME NT CANNOT BE PERMITTED TO TAKE A STAND CONTRARY TO THE INSTRUCTIONS ISSUED BY THE BOARD. (3) A SHOW CAUSE NOTICE AND DEMAND CONTRARY TO EXI STING CIRCULARS OF THE BOARD ARE AB INITIO VOID. (4) IT IS NOT OPEN TO THE REVENUE TO ADVANCE AN ARG UMENT OR FILE AN APPEAL CONTRARY TO THE CIRCULARS. 6. IN VIEW OF THE ABOVE AND CONSIDERING THE CBDTS CIRCULAR F. NO. 279/MISC.-64/05-ITJ DATED 24 TH OCTOBER 2005 READ WITH INSTRUCTION NO. 2/2005 DATED 24 TH OCTOBER 2005 AND INSTRUCTION NO. 5/2008 DATED 15. 05.2008 WE HOLD THAT THE APPEAL FILED BY THE DEPARTMENT IS CONTRARY TO THE SAID CIRCULARS/ INSTRUCTIONS OF THE CBDT. ACCORDINGLY THIS IS NOT ADMITTED AND IS BEING DISMISSED IN LIMINE. [ ITA NO. 576/KOL/2011] 4 7. WE NOW FIND VIDE INSTRUCTION NO.3/2011 [F. NO. 279/MISC. 142/2007-ITJ] DATED 09.02.2011 THE LIMIT HAS FURTHER BEEN ENHANCED AS UNDER :- 3. HENCEFORTH APPEALS SHALL NOT BE FILED IN CASES WHER E THE TAX EFFECT DOES NOT EXCEED THE MONETARY LIMITS GIVEN HEREUNDER : S. NO. APPEALS IN INCOME-TAX MATTERS MONETARY LIMIT (IN RS.) 1. APPEAL BEFORE APPELLATE TRIBUNAL : 3 00 000 2. APPEAL U/S. 260A BEFORE HIGH COURT 10 00 000 3. APPEAL BEFORE SUPREME COURT 25 00 0 00 IT IS CLARIFIED THAT AN APPEAL SHOULD NOT BE FILED MERELY BECAUSE THE TAX EFFECT IN A CASE EXCEEDS THE MONETARY LIMITS PRESCRIBED AB OVE. FILING OF APPEAL IN SUCH CASES IS TO BE DECIDED ON MERITS OF THE CASE. 4 . FOR THIS PURPOSE TAX EFFECT MEANS THE DIFFERENCE BETWEEN THE TAX ON THE TOTAL INCOME ASSESSED AND THE TAX THAT WOULD HA VE BEEN CHARGEABLE HAD SUCH TOTAL INCOME BEEN REDUCED BY THE AMOUNT OF INC OME IN RESPECT OF THE ISSUES AGAINST WHICH APPEAL IS INTENDED TO BE FILED (HEREINAFTER REFERRED TO AS 'DISPUTED ISSUES'). HOWEVER THE TAX WILL NOT INCLUD E ANY INTEREST THEREON EXCEPT WHERE CHARGEABILITY OF INTEREST ITSELF IS IN DISPUTE. IN CASE THE CHARGEABILITY OF INTEREST IS THE ISSUE UNDER DISPUT E THE AMOUNT OF INTEREST SHALL BE THE TAX EFFECT. IN CASES WHERE RETURNED LO SS IS REDUCED OR ASSESSED AS INCOME THE TAX EFFECT WOULD INCLUDE NOTIONAL TAX O N DISPUTED ADDITIONS. IN CASE OF PENALTY ORDERS THE TAX EFFECT WILL MEAN QU ANTUM OF PENALTY DELETED OR REDUCED IN THE ORDER TO BE APPEALED AGAINST. HOWEVER IT HAS BEEN CLARIFIED IN PARA 11 OF INSTRU CTION NO. 3/2011 [F. NO.279/MISC.142/2007- ITJ] DATED 09.02.2011 THAT APPEALS FILED PRIOR TO THIS INSTRUCTION WOULD BE GOVERNED BY INSTRUCTION APPLICABLE AT THE TIME OF FILING APPEAL. 8. ON QUERY FROM THE BENCH THE LD. DR COULD NOT PO INT OUT ANY OF THE EXCEPTIONS AS PROVIDED IN THE CIRCULAR AS UNDER: (A) THAT THIS IS A LOSS CASE HAVING TAX EFFECT MOR E THAN THE PRESCRIBED LIMIT WHICH SHOULD BE TAKEN INTO ACCOUNT (B) THAT THIS IS A COMPOSITE ORDER FOR MANY ASSESS MENT YEARS WHERE TAX EFFECT WILL BE MORE THAN THE PRESCRIBED LIMIT AS PER PARA 5 OF A BOVE INSTRUCTIONS (C) THAT THERE IS OTHER YEAR PENDING AS DISPUTED O N THE SINGULAR ISSUE (D) THAT IN THE CASE OF REVENUE WHERE CONSTITUTIO NAL VALIDITY OF THE PROVISIONS OF THE ACT OR I.T. RULES 1962 ARE UNDER CHALLENGE (E) THAT BOARDS ORDER NOTIFICATION INSTRUCTION OR CIRCULAR HAS BEEN HELD TO BE ILLEGAL OR ULTRA VIRES (F) THAT REVENUE AUDIT OBJECTION IN THE CASE HAS B EEN ACCEPTED BY THE DEPARTMENT AND THE SAME IS UNDER CHALLENGE. [ ITA NO. 576/KOL/2011] 5 WE FIND THAT IN THE PRESENT APPEAL IT IS NOT DISPUT ED THAT THE TAX EFFECT IS LESS THAN RS.3.00 LAKHS THEREFORE IN VIEW OF INSTRUCTION DATED 09.02.2011 THE REVENUE SHOULD NOT HAVE PREFERRED THIS APPEAL. ACCORDINGLY THIS BEING A TAX EFFECT CASE IN VIEW OF THE REASONING GIVEN IN THE CASE OF SMT. NILIMA SINGH (SUPRA) WE DISMISS THE APPEAL OF THE REVENUE IN LIMINE AS UNADMITTED. 9. IN VIEW OF THE ABOVE DISCUSSION WE DISMISS THE APPEAL OF THE DEPARTMENT. 0 0 0 0 '1 '1 '1 '1 2 22 2 1% 1% 1% 1% 3 3 3 3 4 4 4 4 5' 5' 5' 5' ORDER PRONOUNCED IN THE OPEN COURT ON 20. 07. 2011. SD/- SD/- [ . . ] [ . . ! ' ] [ B. R. MITTAL ] [ S.V. MEHROTRA ] JUDICIAL MEMBER ACCOUNTAN T MEMBER 5' / DATED : 20 TH JULY 2011. 0 6 -7 87(9 - COPY OF THE ORDER FORWARDED TO: 1. ' /APPELLANT- ASSTT. COMMISSIONER OF INCOME TAX CC -XXVII 18 RABINDRA SARANI 5 TH FLOOR KOLKATA-700 001. 2 -.+ / RESPONDENT : RAMGOPAL SARAF 53 CHOWRINGHEE ROAD KOLKATA-700 071. 3. 0% / CIT 4. 0% ( )/ CIT(A) 5. '3 -% / DR KOLKATA BENCHES KOLKATA [ .7 - / TRUE COPY] 0%1 / BY ORDER : / #; /DEPUTY/ASSTT. REGISTRAR . [KKC '<= %>; ?' /SR.PS]