The DCIT, Central Circle-2(2),, Ahmedabad v. Smt. Kanakba J.Zala, Bhavnagar

ITSSA 127/AHD/2007 | misc
Pronouncement Date: 01-04-2010 | Result: Dismissed

Appeal Details

RSA Number 12720516 RSA 2007
Assessee PAN AADPZ5731C
Bench Ahmedabad
Appeal Number ITSSA 127/AHD/2007
Duration Of Justice 2 year(s) 7 month(s) 30 day(s)
Appellant The DCIT, Central Circle-2(2),, Ahmedabad
Respondent Smt. Kanakba J.Zala, Bhavnagar
Appeal Type Income Tax (Search & Seizure) Appeal
Pronouncement Date 01-04-2010
Appeal Filed By Department
Order Result Dismissed
Bench Allotted D
Tribunal Order Date 01-04-2010
Date Of Final Hearing 01-04-2010
Next Hearing Date 01-04-2010
Assessment Year misc
Appeal Filed On 02-08-2007
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH D AHMEDABAD BEFORE SHRI MAHAVIR SINGH JUDICIAL MEMBER AND SHRI A.N.PHAUJA ACCOUNTANT MEMBER IT(SS)A NO.127/AHD/2007 BLOCK PERIOD 1/4/90 TO 24/1/01 DATE OF HEARING:1.4.10 DRAFTED:1.4.10 DY. COMMISSIONER OF INCOME-TAX CENTRAL CIRCLE-2(2) AHMEDABAD V/S. SMT. KANAKBA J ZALA SHRI RAM SOCIETY SARDAR NAGAR BHAVNAGAR PAN NO.AADPZ5731C (APPELLANT) .. (RESPONDENT) APPELLANT BY :- SMT. NEETA SHAH SR-DR RESPONDENT BY:- SHRI M.K. PATEL AR O R D E R PER MAHAVIR SINGH JUDICIAL MEMBER:- THIS APPEAL BY THE REVENUE IS ARISING OUT OF THE O RDER OF COMMISSIONER OF INCOME-TAX (APPEALS)-III AHMEDABAD IN APPEAL NOS. CIT(A)-III/229/CC.2(2)/06-07 DATED 11-05-2007. THE ORDER LEVYING PENALTY UNDER U /S.158BFA(2) R.W.S. 154 OF THE INCOME-TAX ACT 1961 (HEREINAFTER REFERRED TO AS T HE ACT) WAS PASSED BY DCIT CENTRAL CIRCLE-2(2) AHMEDABAD VIDE HIS ORDER DATED 27-09-2006 AND 10-05-2007 (RECTIFYING THE ISSUE OF DATE AS 29-09-2006 AFTER T AKING APPROVAL FROM ADDITIONAL CIT RANGE-2 AHMEDABAD) FOR THE BLOCK PERIOD FROM 01-04- 1990 TO 24-01-2001. 2. AT THE OUTSET IT IS NOTICED THAT THE TAX EFFECT IN THIS APPEAL IS BELOW THE PRESCRIBED LIMIT UNDER INSTRUCTION NO.2/2005 DATED 24-10-2005 . WE FIND THAT THE TAX EFFECT IN IS AMOUNTING TO RS.1 30 826/-. WHEN THIS WAS CONFRONTED TO THE DR SHE HAS NOT DISPUTED THAT THE TAX EFFECT IS MORE THAN T HIS. THE APPEAL WAS FILED BY THE REVENUE ON 02-08-2007. IT(SS)A NO. 127/AHD/2007 B.P. 1/4/90 TO 24/1/01 DCIT CC -2(2) ABD V. SMT. KANAKBA J ZALA PAG E 2 3. IT SEEMS THAT RECENTLY HONBLE GUJARAT HIGH COUR T IN THE CASE OF CIT V. CONCORD PHARMACEUTICALS IN TAX APPEAL NO.402/2001 VIDE ORDER DATED 05-08-2 008 HAS FINALLY SETTLED THE ISSUE REGARDING TAX EFFECT CASES. HONBLE HIGH COURT IN THIS CASE HAS HELD AS UNDER:- 20. THERE IS ALSO DIFFERENCE OF OPINION AMONGST TH E COURTS WITH REGARD TO THE APPLICABILITY OF THE CIRCULAR. IF ON THE DATE OF FILING OF AN APPEAL A CIRCULAR IS NOT IN FORCE OR CERTAIN EXCEPTIONS ARE NOT THERE OR MONETARY LIMIT IS LESS THAN WHAT WAS THERE AT THE TIME OF DECIDING THIS APPEAL IN SUCH CASES THE TRIBUNAL WILL HAVE TO GIVE DUE WEIGHTAGE TO THE PROVISIONS C ONTAINED IN THE CIRCULAR PREVALENT ON THE DATE OF FILING OF APPEAL AND NOT O N THE DATE OF THE DECISION OF THE APPEAL. IN CIT V. CHHAGER PACKAGING & PLASTIC S (P) LTD. (2008) 214 CTR 389 (BOM) THE BOMBAY HIGH COURT TOOK THE VIEW THAT CIRCULARS / INSTRUCTIONS ISSUED BY THE BOARD ARE APPLICABLE ONLY PROSPECTIVE LY AND IF THERE IS NO REFERENCE TO THEIR APPLICABILITY TO THE PENDING MAT TERS SUCH PENDING MATERS CANNOT BE DECIDED ON THE BASIS OF CIRCULARS / INSTR UCTIONS. IN CIT V. PITHWA ENGINEERING WORKS 276 ITR 519 (BOM) THE BOMBAY HIG H COURT TOOK THE VIEW THAT TAKING JUDICIAL NOTICE OF THE MONEY VALUE HAVI NG GONE DOWN AND COST OF LITIGATION EXPENSES HAVING GONE UP AS WELL AS HUGE PENDENCY OF CASES THE BOARD SHOULD EVOLVE A POLICY OF APPLYING THE CIRCUL AR EVEN TO THE OLD REFERENCES WHICH ARE STILL UNDIVIDED. THE DEPARTMEN T SHOULD NOT HAVE PROCEEDED WITH THE APPEALS / REFERENCES WHEREIN THE TAX IMPACT IS MINIMAL IRRESPECTIVE OF THEIR DATE OF FILING. 21.THERE IS NO DISPUTE ABOUT THE FACT THAT WHERE SU BSTANTIAL QUESTION OF LAW OF IMPORTANCE IS INVOLVED OR WHERE QUESTION OF LAW IS IMPORTANCE IS INVOLVED OR WHERE QUESTION OF LAW IS REPEATEDLY ARISING OR WHER E THE ISSUE IS COVERED BY THE JUDGMENT OF TERRITORIAL HIGH COURT OR SUPREME C OURT THE TRIBUNAL WILL HAVE TO DECIDE THE APPEAL ON MERITS AND IN TERMS OF THE LAW DECLARED BY THE SUPREME COURT OR BY THE TERRITORIAL HIGH COURT. HO WEVER ON THIS GROUND THE MATTERS CANNOT BE REMANDED TO THE TRIBUNAL DIRECTIN G THE TRIBUNAL TO DECIDE THE SAME AFRESH. IF NO OBJECTIONS ARE RAISED BY TH E DEPARTMENTAL REPRESENTATIVE AT THE TIME OF HEARING OF THE APPEAL AGAINST THE APPLICABILITY OF THE CIRCULAR DESPITE THERE BEING AN EXCEPTION THE DEPARTMENT HAS MISSED THE BUS AND SECOND INNING CANNOT BE GRANTED FOR THAT PU RPOSE. HOWEVER IN MATTERS WHERE SUCH OBJECTIONS ARE RAISED AND DESPIT E THOSE OBJECTIONS OR WITHOUT DEALING WITH THOSE OBJECTIONS IF THE TRIBUN AL HAS DISMISSED THE APPEAL ONLY ON THE GROUND OF LOW TAX EFFECT IN SUCH MATTER AN INDULGENCE IS REQUIRED TO BE SHOWN BY THIS COURT AND FOR THIS LIMITED PURP OSES THE DEPARTMENT IS PERMITTED TO MOVE AN APPROPRIATE APPLICATION BEFORE THE TRIBUNAL FOR DECIDING THE APPEAL ON MERITS. 22. WE ARE OF THE VIEW THAT SIMPLY BECAUSE THE APPE AL IS FILED BY THE DEPARTMENT IN CONTRAVENTION OF THE CIRCULAR THE TRI BUNAL IS NOT BOUND TO DECIDE THE APPEAL ON MERITS. DUE WEIGHTAGE SHOULD INVARIABLY BE GIVEN BY THE TRIBUNAL TO THE CIRCULAR ISSUED BY THE BOARD. EVEN OTHERWISE THE NEWLY INSERTED PROVISIONS CONTAINED IN SECTION 268A(4) MA KE IT OBLIGATORY FOR THE TRIBUNAL TO CONSIDER SUCH CIRCULAR. IT IS NOT OPEN FOR THE DEPARTMENT TO IT(SS)A NO. 127/AHD/2007 B.P. 1/4/90 TO 24/1/01 DCIT CC -2(2) ABD V. SMT. KANAKBA J ZALA PAG E 3 CONTEND THAT CIRCULARS ARE INTERNAL MATTERS OF THE DEPARTMENT AND ASSESSEE CANNOT OBJECT TO FILING OF AN APPEAL ON THE BASIS O F SUCH CIRCULAR. IT IS TRUE THAT FILING OF AN APPEAL IS A STATUTORY RIGHT BUT IT CAN CERTAINLY BE REGULATED BY THE BOARD BY ISSUANCE OF ORDERS INSTRUCTIONS OR CIRCUL ARS. THIS WOULD NOT AMOUNT TO TAKING AWAY THE RIGHT OF FILING OF APPEAL OR THA T SUCH RIGHT IS PROHIBITED BY EXECUTIVE INSTRUCTIONS. SECTION 268A(1) OF THE ACT NOW RECOGNIZES SUCH RIGHT OF THE BOARD TO REGULATE THE FILING OF APPEAL OR AP PLICATION BEFORE THE TRIBUNAL OR THE COURT. IT IS ALSO TRUE THAT WHEN THE HONBL E SUPREME COURT OR THE TERRITORIAL HIGH COURT HAVE DECLARED THE LAW ON A Q UESTION IT IS NOT OPEN TO THE TRIBUNAL TO DIRECT THAT THE CIRCULAR ISSUED BY THE BOARD PRESCRIBING THE MONETARY LIMIT SHOULD BE GIVEN EFFECT TO AND NOT TH E DECISION OF HONBLE SUPREME COURT OR THE TERRITORIAL HIGH COURT. IT IS HOWEVER EQUALLY TRUE THAT THE TRIBUNALS ATTENTION MUST BE DRAWN BY THE DEPAR TMENTAL REPRESENTATIVE TO SUCH DECISION OF THE HONBLE SUPREME COURT OR THE H IGH COURT. AN OBJECTION MUST BE RAISED BY THE DEPARTMENTAL REPRESENTATIVE. 23. CONSIDERING ALL THE AFORESAID ISSUES WE DISMIS S ALL THESE TAX APPEALS RESERVING LIBERTY TO THE DEPARTMENT ONLY ON THOSE C ASES TO APPLY TO THE TRIBUNAL TO DECIDE THE APPEAL ON MERITS WHERE THE O BJECTIONS WERE RAISED BEFORE THE TRIBUNAL EITHER IN THE APPEAL MEMO OR AT THE TIME OF HEARING OF APPEAL RAISING A SPECIFIC CONTENTION THAT A PARTICU LAR APPEAL IS COVERED BY AN EXCEPTION AND DESPITE THIS OBJECTION THE TRIBUNAL H AS NOT DEALT WITH THE SAID CONTENTION AND DISMISSED THE APPEAL ON THE GROUND O F LOW TAX EFFECT. IT IS EXPECTED FROM THE TRIBUNAL TO CONSIDER THIS BROAD P ARAMETERS WHILE APPLYING THE RELEVANT CIRCULAR TO THE FATS OF THE CASE AT TH E TIME OF DECIDING APPEALS. 4. AT THE TIME OF HEARING BEFORE US THE LD. DEPART MENTAL REPRESENTATIVE WAS SPECIFICALLY ASKED BY THE BENCH WHETHER THE APPEAL FALLS UNDER ANY OF THE EXCEPTIONS AS PROVIDED IN BOARDS INSTRUCTION NO.2/2005 DATED 24-10-2005 THE SUBJECT-MATTER OF THE APPEAL IS COVERED BY ANY OF THE JUDGMENT OF JURISDICTIONAL HIGH COURT OR OF SUPREME COURT ANY SUBSTANTIAL QUESTION OF LAW IS I NVOLVED OR NOT. THE LD DR STATED THAT IN THE APPEAL THE ISSUE RAISED BY THE REVENUE IS REGARDING LEVY OF PENALTY U/S.158BFA(2) OF THE ACT AND ACCORDING TO HER THIS IS NO SUBSTANTIAL QUESTION OF LAW. WE FIND THE RELEVANT EXCEPTIONS AS PROVIDED IN BOAR DS INSTRUCTION NO.1979/2000 DATED 27-03-2000 READS AS UNDER:- 3. ADVERSE JUDGMENTS RELATING TO THE FOLLOWING SHOULD BE CONTESTED IRRESPECTIVE OF REVENUE EFFECT : (I) WHERE REVENUE AUDITED OBJECTION IN THE CASE HA S BEEN ACCEPTED B THE DEPARTMENT (II) WHERE THE BOARDS ORDER NOTIFICATION INSTRUC TION OR CIRCULAR IS THE SUBJECT-MATTER OF AN ADVERSE ORDER. (III) WHERE PROSECUTION PROCEEDINGS ARE CONTEMPLATE D AGAINST THE ASSESSEE. IT(SS)A NO. 127/AHD/2007 B.P. 1/4/90 TO 24/1/01 DCIT CC -2(2) ABD V. SMT. KANAKBA J ZALA PAG E 4 (IV) WHERE THE CONSTITUTIONAL VALIDITY OF THE PROVI SIONS OF THE ACT ARE UNDER CHALLENGE. 5. WE FIND THAT THE APPEAL RELATE TO LOW TAX EFFECT AND COVERED BY THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CONCORD PHARMACEUTICALS (SUPRA). RESPECTFULLY FOLLOWING CONCORD PHARMACEUTICALS (SUPRA) AND IN VIEW OF THE ARGUMENTS OF THE LD. SR-DR THAT THERE IS NO SUBSTAN TIAL QUESTION OF LAW THE ISSUE IS A FACTUAL ONE. THERE IS NO SUBSTANTIAL QUESTION OF LAW IN THIS. ACCORDINGLY WE DISMISS THIS APPEAL OF THE REVENUE. 6. IN THE RESULT REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 01/04/2010 SD/- SD/- (A.N.PHAUJA) (MAHAVIR SINGH) (ACCOUNTANT MEMBER) (JUDICIAL MEMBER) AHMEDABAD DATED : 01/04/2010 *DKP COPY OF THE ORDER FORWARDED TO :- 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT(APPEALS)-III AHMEDABAD 4. THE CIT CONCERNS. 5. THE DR ITAT AHMEDABAD 6. GUARD FILE. BY ORDER /TRUE COPY/ DEPUTY / ASSTT.REGISTRAR ITAT AHMEDABAD