ITO, Calicut v. James Jacob, Calicut

MA 49/COCH/2010 | misc
Pronouncement Date: 02-02-2012

Appeal Details

RSA Number 4921924 RSA 2010
Bench Cochin
Appeal Number MA 49/COCH/2010
Duration Of Justice 1 year(s) 5 month(s) 16 day(s)
Appellant ITO, Calicut
Respondent James Jacob, Calicut
Appeal Type Miscellaneous Application
Pronouncement Date 02-02-2012
Appeal Filed By Department
Bench Allotted DB
Tribunal Order Date 02-02-2012
Date Of Final Hearing 02-12-2011
Next Hearing Date 02-12-2011
Assessment Year misc
Appeal Filed On 16-08-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH COCHIN BEFORE S/SHRI N.R.S.GANESAN JM AND SANJAY AROR A AM M.P. NO. 49/COCH/2010 (ARSG. OUT OF I.T.(SS)A NO. 08/COCH/2006) ASSESSMENT YEARS: 1990-91 TO 2000-01 THE ASSISTANT COMMISSIONER OF INCOME-TAX CENTRAL CIRCLE-1 CALICUT. VS. JAMES JOSEPH MANIMALA HOUSE 17/1700D DUTT COMPOUND THALIKULANGARA ROAD MANKAVU CALICUT-7. [PAN: ] (REVENUE-APPLICANT) (ASSESSEE- RESPONDENT) REVENUE BY SHRI S.R.SENAPATI SR. DR ASSESSEE BY SHRI K.R.SUDHAKARAN PILLAI ADV.-AR DATE OF HEARING 02/12/2011 DATE OF PRONOUNCEMENT 02//02/2012 O R D E R PER SANJAY ARORA AM: THIS MISCELLANEOUS PETITION BY THE REVENUE IS DIRE CTED AGAINST THE ORDER BY THE TRIBUNAL DATED 22-01-2010 IN THE ASSESSEES CASE D ISMISSING ITS (REVENUES) APPEAL IN LIMINE. 2. THE REVENUES OBJECTION STATES THAT ITS APPEAL FILED ON 02-02-2006 HAS BEEN DISMISSED IN VIEW OF THE BOARDS INSTRUCTION WITH R EGARD TO LOW TAX EFFECT; THE TAX EFFECT OF ITS APPEAL BEING BELOW ` 2 LAKHS. THE BOARDS INSTRUCTION APPLICABLE IS NO. 02/2005 DATED 24-10-2005 EFFECTIVE FROM 31/10/2005 WHICH DRAWS AN EXCEPTION IN RESPECT OF APPEALS INVOLVING SUBSTANTIAL QUESTION OF LAW EVEN AS CLARIFIED BY THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. K. SREEKANTAN PILLAI (IN I.T.A. NO. 18/2008 DATED 17-07-2008). FURTHER THE TRIBUNAL THOUGH ADV ERTS TO THE DECISION BY THE APEX COURT IN THE MATTER OF SURCHARGE IN THE CASE OF CIT VS. SURESH N. GUPTA (2008) 297 ITR 322 M.P. NO. 49/COCH/2010 ACIT CENTRAL CIRCLE CALICUT V. JAMES JOSEPH 2 (SC) DOES NOT FOLLOW THE SAME IN VIEW OF THE SAID ISSUE HAVING BEEN REFERRED BY IT (APEX COURT) TO ITS LARGER BENCH. THE HONBLE JURISDICTIO NAL HIGH COURT IN THE CASE OF CIT (CENTRAL) COCHIN VS. M/S. HOTEL AMRUTHA & BAR CAL ICUT (IN ITA NO. 1570 OF 2009 DATED 07/9/2009 COPY ON RECORD) IN WHICH FIRM THE ASSESS EE IS A PARTNER HAS REMANDED THE MATTER BACK TO THE FILE OF THE ASSESSING AUTHORITY IN THE LIGHT OF THE DECISION BY THE APEX COURT IN THE CASE OF CIT VS. SURESH N. GUPTA (SUPRA). THE NON-CONSIDERATION OF THE SAID BINDING DECISION BY THE APEX COURT OPERATION OF WH ICH HAS NOT BEEN STAYED BY IT BY THE TRIBUNAL WAS NOT PROPER. ACCORDINGLY THE IMPUGNED ORDER BEARS SUCH MISTAKE/S APPARENT FROM RECORD WHICH MAY BE RECTIFIED. 3.1 BEFORE US THE REVENUE APART FROM THE BOARDS INSTRUCTION AND THE DECISIONS BY THE HONBLE JURISDICTIONAL HIGH COURT AND THE APEX COURT REFERRED TO IN ITS APPLICATION RELIED ON THE DECISION BY THE APEX COURT IN THE CAS E OF CIT VS. SURYA HERBAL LTD. IN SLP (CC) NO.13694/2011 DATED 29-08-2011 (COPY ON RECORD ) DECLARING THAT THE BOARDS INSTRUCTION MAY NOT BE APPLIED IPSO FACTO PARTICULARLY WHEN THE MATTER HAS A CASCADING EFFECT. 3.2 THE LD. AR ON THE OTHER HAND WOULD STATE THAT AS CLARIFIED BY THE FULL BENCH DECISION BY THE HONBLE DELHI HIGH COURT IN THE CAS E OF LACHMAN DASS BHATIA HINGWALA (P.) LTD. VS. ASSTT. CIT (2011) 330 ITR 243 (DEL.) (FB) (COPY ON RECORD) TH E TRIBUNAL WHEN IT RENDERS A DECISION WITHOUT DEALING WITH A S PECIFIC FACT SITUATION MAY COMMIT AN IRREGULARITY OF PROCEDURE BUT THAT WOULD NOT CLOTH E IT (TRIBUNAL) WITH THE JURISDICTION TO RECALL ITS ORDER AS THE AGGRIEVED PARTY MUST SEEK H IS REMEDY IN APPEAL. FURTHER THE HONBLE PUNJAB AND HARYANA HIGH COURT IN THE CASE O F CIT VS. ABHINASH GUPTA (2010) 327 ITR 619 (P&H) (COPY ON RECORD) HAS CLARIFIED TH AT EVEN IF THE QUESTION OF LAW IS OF RECURRING NATURE THE REVENUE IS NOT EXPECTED TO FI LE APPEALS IN SUCH CASES IF THE TAX IMPACT IS LESS THAN THE MONETARY LIMIT FIXED BY THE CBDT. IN THE INSTANT CASE THE ISSUE OF SURCHARGE MAY NOT BE A RECURRING ISSUE. 4. WE HAVE HEARD THE PARTIES AND PERUSED THE MATERIAL ON RECORD. M.P. NO. 49/COCH/2010 ACIT CENTRAL CIRCLE CALICUT V. JAMES JOSEPH 3 4.1 THE TRIBUNAL HAD DISMISSED THE REVENUES APPEAL ON ACCOUNT OF ITS LOW TAX-EFFECT. THE BOARDS INSTRUCTION APPLIED IS INSTRUCTION NO. 02/2005 DATED 24-10-2005 EFFECTIVE 31/10/2005 SO THAT IT WOULD APPLY QUA ALL THE APPEALS FILED BY THE REVENUE ON OR AFTER THAT DATE. OF COURSE THE SAME STANDS SUPERSEDED BY ITS SUBSEQUENT INSTRUCTIONS U/S. 268A BEING NO.05/2007 DATED 16-07-2007 AND NO. 05/2008 D ATED 15-05-2008 WHICH AS ABUNDANTLY CLARIFIED THEREIN ARE EFFECTIVE FROM TH E RESPECTIVE DATES OF THEIR ISSUE. THE SAME FALLING AFTER THE DATE OF FILING OF APPEAL IN THE INSTANT CASE ARE THUS NOT APPLICABLE AND THEREFORE NOT RELEVANT. THE HONBLE JURISDICT IONAL HIGH COURT IN THE CASE OF CIT VS. MALABAR & PIONEER HOSIERY (P.) LTD. (IN W.T.A. NO. 80 OF 2009 DATED 07-12-2010) HAS CLARIFIED THAT THE RELEVANT INSTRUCTION OF THE BOAR D WOULD BE THAT APPLICABLE OR IN FORCE AS ON THE DATE OF FILING OF THE APPEAL. FURTHER INSTR UCTION NO. 02/2005 MAKES A CLEAR EXCEPTION FOR CASES INVOLVING SUBSTANTIAL QUESTION/ S OF LAW OF IMPORTANCE. THE ISSUE OF SURCHARGE U/S. 113 IN RELATION TO ASSESSMENTS U/C X IV-B OF THE INCOME TAX ACT (`THE ACT HEREINAFTER) HAS WITHOUT DOUBT SEIZED THE MINDS OF THE HIGHER COURTS OF LAW TRAVELLING UP TO THE HONBLE APEX COURT WHICH HAS THOUGH CONSID ERED THE SAME IN MORE THAN ONE CASE DEEMED IT FIT TO REFER IT TO ITS LARGER CONSTITUTIO N. FURTHER AS REGARDS THE QUESTION OF IT BEING A RECURRING ISSUE I.E. WHERE THE SAME QUEST ION OF LAW WOULD ARISE REPEATEDLY THE SAME CONSTITUTES A SEPARATE CATEGORY TO WHICH AGAI N EXCEPTION HAS BEEN DRAWN BY THE SAID INSTRUCTION; THE WORDS CONNECTING THE TWO EXCE PTIONS BEING `AS WELL AS. THIS WOULD MEET THE LD. ARS CONTENTION THAT THE ISSUE OF SURC HARGE CANNOT BE EXPECTED TO ARISE IN THE ASSESSEES CASE REPEATEDLY. 4.2 CLEARLY THEREFORE THE REVENUES APPEAL IS N OT COVERED BY THE SAID BOARDS INSTRUCTION (NO. 2/2005 DATED 24/10/2005 EFFECTIVE 31/10/2005) TO BE CONSIDERED AS NOT MAINTAINABLE IN TERMS OF S. 268A OF THE ACT INSERTE D BY FINANCE ACT 2008 W.R.E.F. 01-04- 1999 WHERE-UNDER THE SAID INSTRUCTION IS ISSUED. IN FACT THE DECISION IN THE CASE OF CWT VS. JOHN L. CHACKOLA (2011) 337 ITR 385 (KER.) IS SQUARELY APPLICABLE I N THE FACTS AND CIRCUMSTANCES OF THE CASE WHEREIN THE HON'BLE JURI SDICTIONAL HIGH COURT HAS HELD THAT THE INSTRUCTION APPLICABLE WAS NO. 02/2005 AND FURTHER THAT THE REVENUES APPEAL STOOD COVERED BY EXCEPTION CLAUSE `3 OF THE SAID INSTRUC TION IN CASES WHERE SUBSTANTIAL QUESTION M.P. NO. 49/COCH/2010 ACIT CENTRAL CIRCLE CALICUT V. JAMES JOSEPH 4 OF LAW OF IMPORTANCE AND CASES WHERE THE SAME QUEST ION OF LAW WILL REPEATEDLY ARISE FOR DECISION. IT HAS BEEN FURTHER CLARIFIED BY IT THAT THE SUBSTANTIAL QUESTION OF LAW COULD ARISE IN THE CASE OF EITHER THE SAME ASSESSEE OR OTHER AS SESSES. WE HAVE ALREADY NOTED THAT THE ISSUE UNDER REFERENCE IS ONE OF IMPORTANCE HAVING NATIONWIDE IMPLICATION. 4.3 WE DO NOTE THAT THE TRIBUNAL HAS ALSO ADVE RTED TO THE REFERENCE (OF THE ISSUE OF `SURCHARGE) BY THE APEX COURT TO A LARGER BENCH. HOWEVER AS WOULD BE APPARENT FROM A BARE READING OF THE IMPUGNED ORDER THE TRIBUNAL HA S NOT DECIDED THE REVENUES APPEAL ON THAT BASIS; IT ISSUING NO FINDING OR DECISION IN TH E MATTER AND HAS ONLY ADVANCED THE SAID ARGUMENT AS A REASON TOWARD ITS NOT FOLLOWING THE D ECISION BY THE APEX COURT IN THE CASE OF CIT VS. SURESH N. GUPTA (SUPRA). THE SAME IT MAY BE APPRECIATED WOULD FA LL FOR CONSIDERATION ONLY IN DECIDING THE APPEAL ON MERITS WHICH THE TRIBUNAL HAS ADMITTEDLY NOT DONE SO THAT THE REVENUES OBJECTION WITH REFERENC E THERETO IS OF NO MOMENT. 4.4 THE DECISION IN THE CASE OF LACHMAN DASS BHATIA HINGWALA (P.) LTD. VS. ASSTT. CIT (SUPRA) HAS BEEN WRONGLY CONSTRUED BY THE ASSESSEE. THE PROPOSITION SOUGHT TO BE ADVANCED WITH REFERENCE TO THE SAID CASE IS IN FACT ON THE BASIS OF ITS EARLIER DECISIONS PROHIBITING A RECALL OF ITS ORDER BY THE TRIBUNAL WHICH STAND SINCE OVERRULED BY IT IN VIEW OF THE DECISION IN THE CASE OF HONDA SIEL POWER PRODUCTS LTD. V. CIT (2007) 295 ITR 466 (SC) WHICH DECISION IT SEEKS TO EXPLAIN PER ITS SA ID JUDGMENT. THE RELIANCE ON THE DECISION IN THE CASE OF CIT VS. ABHINASH GUPTA (SUPRA) IS AGAIN MISPLACED. IN THAT CASE THE TRIBUNAL ALLOWED THE ASSESSSEES CLAIM U/S. 54F ON THE BASIS OF THE FACTUAL FINDING OF THE INVESTMENT IN THE RESIDENTIAL HOUSE HAVING BEEN MADE WITHIN ONE YEAR PRIOR TO THE TRANSFER ON WHICH CAPITAL GAINS AROSE. NOTING THE S AME ON THE MATTER BEING CARRIED BEFORE IT THE HONBLE COURT RESPONDING TO THE PRELIMINAR Y OBJECTION TAKEN BY THE ASSESSEES COUNSEL HELD THAT NO SUBSTANTIAL QUESTION OF LAW A ROSE. THE REFERENCE TO THE RECURRING ISSUE IS MADE TO CLARIFY THAT THE MONETARY LIMIT IS TO APPLY QUA EACH ASSESSMENT YEAR AND WHICH IS INDEED SO A MATTER WHICH IS NEITHER IN DO UBT NOR BEING SO CONTENDED BY THE REVENUE. THE MATTER AS AFORESAID IS SQUARELY COVE RED BY THE BINDING DECISIONS BY THE HONBLE JURISDICTIONAL HIGH COURT WHICH HAS REPEAT EDLY EMPHASIZED THAT THE BOARDS M.P. NO. 49/COCH/2010 ACIT CENTRAL CIRCLE CALICUT V. JAMES JOSEPH 5 INSTRUCTIONS ARE TO BE SCRUPULOUSLY FOLLOWED; IT TH EREBY CONCEDING ITS RIGHT TO APPEAL SO THAT THE RELINQUISHMENT IS ONLY TO BE WITH REFERENC E TO THE TERMS THEREOF AS SET OUT IN ITS APPLICABLE INSTRUCTIONS. THE INSTRUCTION APPLICABLE IN THAT CASE IS NO. 05/2008 EFFECTIVE 15/5/2008 THE TERMS OF WHICH MAY WELL BE DIFFERENT . IN FACT THE VERY FACT THAT THE HONBLE COURT IN THE CASE OF THE PARTNERSHIP FIRM ON THIS VERY GROUND REMITTED THE MATTER BACK TO THE FILE OF THE ASSESSING OFFICER TO APPLY THE LAW AS LAID DOWN BY THE APEX COURT IN CIT VS. SURESH N. GUPTA (2008) 297 ITR 322 (SC) WOULD CLARIFY ITS VERDICT IN THE MATTER BEYOND ANY DOUBT WHATSOEVER. 5. IN VIEW OF THE FOREGOING THE IMPUGNED ORDER BY THE TRIBUNAL BEARS A MISTAKE INASMUCH AS THE REVENUES APPEAL DISMISSED IN LIMINE IS NOT COVERED BY THE APPLICABLE BOARD INSTRUCTION I.E. NO. 2/2005 DATED 24/10/200 5 SO THAT THE SAME IS TO BE RECALLED FOR A DECISION ON MERITS AFTER HEARING THE PARTIES. W E DECIDE ACCORDINGLY. 6. IN THE RESULT THE MISCELLANEOUS PETITION FILED BY THE REVENUE IS ALLOWED. SD/- SD/- (N.R.S.GANESAN) (SANJAY ARORA) JUDICIAL MEMBER ACCOUNTANT MEMBER PLACE: ERNAKULAM DATED: 2ND FEBRUARY 2012 GJ COPY TO: 1. SHRI JAMES JOSEPH MANIMALA HOUSE 17/1700D DUT T COMPOUND THALIKULANGARA ROAD MANKAVU CALICUT-7. 2. THE ASSISTANT COMMISSIONER OF INCOME-TAX CENTRA L CIRCLE-1 CALICUT. 3. THE COMMISSIONER OF INCOME-TAX (APPEALS)-I KOCH I. 4. THE COMMISSIONER OF INCOME-TAX CENTRAL KOCHI. 5. D.R. I.T.A.T. COCHIN BENCH COCHIN. 6. GUARD FILE . BY ORDER ( ASSISTANT REGISTRAR)