ACIT, v. M/s. Krishna Hire Finance Ltd.,

MA 5/LKW/2010 | 1998-1999
Pronouncement Date: 17-09-2010 | Result: Dismissed

Appeal Details

RSA Number 523724 RSA 2010
Bench Lucknow
Appeal Number MA 5/LKW/2010
Duration Of Justice 7 month(s) 8 day(s)
Appellant ACIT,
Respondent M/s. Krishna Hire Finance Ltd.,
Appeal Type Miscellaneous Application
Pronouncement Date 17-09-2010
Appeal Filed By Department
Order Result Dismissed
Bench Allotted B
Tribunal Order Date 17-09-2010
Date Of Final Hearing 17-09-2010
Next Hearing Date 17-09-2010
Assessment Year 1998-1999
Appeal Filed On 08-02-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH LUCKNOW. BEFORE SHRI H.L.KARWA HON'BLE VICE PRESIDENT AND SHRI N.K.SAINI ACCOUNTANT MEMBER M.A.NO.5(LUC.)/2010 (IN I.T.A.NO.85(ALLD.)/2004) A.Y. : 1998-99 THE ACIT CIR. VS. M/S. KRISHNA HIRE FINANCE LTD . SULTANPUR INDIRA NAGAR RAEBARELI. (APPLICANT) (RESPONDENT) APPLICANT BY : SHRI ALOK MITRA D.R. RESPONDENT BY : SHRI G.N.SRIVASTAVA A.R. O R D E R PER N.K.SAINI ACCOUNTANT MEMBER THIS MISCELLANEOUS APPLICATION HAS BEEN FILED BY T HE DEPARTMENT AND IS ARISING OUT OF THE ORDER DATED 13.10.2009 PASSED IN I.T.A.NO.85(ALLD.)/2004 FOR THE ASSESSMENT YEAR 199 8-99. 2. THE DEPARTMENT IN THIS MISCELLANEOUS APPLICATIO N HAS STATED THAT THE APPEAL OF THE DEPARTMENT WAS DISMISSED BY CONSIDERI NG THE PROVISIONS OF SECTION 268A OF THE INCOME-TAX ACT 1961AND INSTRUCT IONS OF THE C.B.D.T. SINCE THE TAX EFFECT WAS LESS THAN RS.2 LACS. THE D EPARTMENT HAS REQUESTED TO RECALL THE ORDER STATING THAT THE APPEAL WAS FILED IN ACCORD WITH THE INSTRUCTIONS PREVAILING ON THE DATE OF FILING THE A PPEAL. THE CONTENTS OF THE MISCELLANEOUS APPLICATION DATED 5.2.2010 READ AS UN DER : THE HON'BLE ITAT LUCKNOW BENCH 'B' LUCKNOW HAS DI SMISSED 2 THE REVENUE APPEAL IN ITS ORDER DATED 13/10/2009 IN APPEAL NO. I.T.A. NO. 85/ALLD/04 WITH FOLLOWING FINDINGS:- 'IT IS NOT IN DISPUTE THAT THE BOARD'S INSTRUCTION OR DIRECTION ISSUED TO THE OTHER INCOME-TAX AUTHORITIES ARE BIND ING ON THOSE AUTHORITIES THEREFORE THE DEPARTMENT OUGHT NOT TO HAVE FILED THE APPEAL IN VIEW OF THE ABOVE MENTIONED SECTION 2 68A SINCE EFFECT IN THE INSTANT CASE IS LESS THAN THE AMOUNT PRESCRIBED FOR NOT FILLING THE APPEAL SO THIS APPEAL IS DISMISSED . IN THE RESULT THE APPEAL IS DISMISSED.' 2. IN THIS CASE THE ASSESSING OFFICER IN THE ASSES SMENT ORDER U/S 143(3)/151 DATED 26/03/2003 MADE ADDITIONS OFRS. 3 67500/- ON ACCOUNT OF UNEXPLAINED SHARE CAPITAL INTRODUCED IN THE NAMES OF FOLLOWING PERSONS :- (I) SRI K.N. RASTOGI 136500/- (II) SRI VIJAY RASTOGI 91000/- (III) SRI RAVI RASTOGI 50000/- (IV) SMT. SONIA RASTOGI 50000/- (V) SRI S.S. TRIPATHI 40000/- TOTAL 3 67 500 3. THE COMMISSIONER OF INCOME-TAX APPEAL-II LUCKN OW VIDE HIS ORDER DATED 5.12.2003 IN APPEAL NO.A.NO.12/4/SULTA NPUR/03-04 DELETED THE ADDITION OF RS.327500 MADE ON THIS COUN T AND CONFIRMED THE ADDITION OF RS.40000 (UNEXPLAINED SHARE CAPITA L IN THE NAME OF S.S.TRIPATHI). THE DEPARTMENT PREFERRED APPEAL IN T HE HON'BLE ITAT ALLAHABAD WITH FOLLOWING GROUNDS OF APPEAL: (I) THAT THE LEARNED CIT(APPEALS) ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.3 27 500 MADE BY THE AO ON ACCOUNT ON UNEXPLAINED SHARE CAPITAL INTRODUCED BY S/SHRI K.N.RASTOGI SHRI VIJAY RASTOGI SHRI RAVI RASTOGI A ND SMT.SONIA RASTOGI. (II) THAT THE LEARNED CIT(APPEALS) ERRED IN LAW AS WELL AS ON FACTS IN DELETING THE ADDITION OF RS.1 36 500 IN THE CASE OF SHRI 3 K.N.RASTOGI BY ACCEPTING THE ADDITIONAL EVIDENCE IN CONTRAVENTION OF RULE 46A OF I.T.RULES. (III) THAT THE LEARNED CIT (APPEALS) ERRED IN LAW AS WELL AS ON FACTS IN DELETING THE ADDITION OF RS.91 000/- IN TH E CASE OF SHRI VIJAY RASTOGI. (IV) THAT THE LEARNED CIT (APPEALS) ERRED IN LAW AS WELL AS ON FACT IN DELETING THE ADDITION OF RS.50 000/- IN THE CASE OF SHRI RAVI RASTOGI. (V) THAT THE LEARNED CIT (APPEALS) ERRED IN LAW AS WELL AS ON FACT IN DELETING THE ADDITION OF RS.50 000/- IN THE CASE OF SMT. SONIA RASTOGI. THAT THE LEARNED CIT (APPEALS) ERRED IN LAW AND ON FACT IN MISINTERPRETING THE DECISION ON HON'BLE HIGH COURT IN THE CASE OF CIT VS. SOPHIA FINANCE LTD. (205 ITR 98) (DEL). IN THE SAID JUDGMENT IT WAS HELD THAT THE A.O. WAS EMPOWERED TO MAKE ADDITION U/S 68 OF I.T. ACT IF HE WAS NOT SATISFIED ABOUT TH E GENUINENESS OF THE CREDIT OF SHARE CAPITAL AND THEREFORE ON A REFERE NCE MADE BY THE DEPARTMENT U/S 256(2) OF I.T.ACT DIRECTED THE TRIB UNAL TO DRAW THE STATEMENT AND REFER THE QUESTION OF LAW TO THE HIGH COURT. THEREFORE THE DELETION OF THE ADDITIONS AGGREGATIN G TO RS.3 27 500/- BY THE LEARNED CIT (A) BASED ON THE DECISION OF HON 'BLE HIGH COURT IN THE CASE OF CIT VS. SOPHIA FINANCE LTD. (SUPRA) WHICH IS IN FAVOUR OF THE DEPARTMENT IS BAD IN LAW. THAT THE ORDER OF LEARNED CIT (APPEALS) BEING ERRON EOUS IN LAW AND ON FACTS BE SET ASIDE AND THAT OF THE A.O. BE R ESTORED.' 4. IN ITS ORDER DATED 13.10.2009 THE HON'BLE ITAT HAS REFERRED CBDT INSTRUCTIONS ISSUED WITH REGARD TO FILLING OF APPEA L AND ALSO INSERTION OF SECTION 268A WITH RETROSPECTIVE EFFECT FROM 01/0 4/1999. 5. IN THIS CASE APPEAL BEFORE HON'BLE ITAT WAS FILE D ON 22.3.2004 . THERE WAS THEREFORE NO QUESTION OF GOING BY INSTR UCTION NO.02 OF 24/10/2005 QUOTED BY THE HON'BLE ITAT AS IT WAS NOT EXTANT AS ON DATE OF FILLING. THE SECOND INSTRUCTION QUOTED E.G. NO. 1979 DATED 27.3.2000 LAID DOWN THE LIMIT FOR FILING APPEAL BEFORE ITAT A S RS.1 00 000/- (TAX-EFFECT) ' IN THE INSTANT CASE THE TAX EFFECT W AS RS.1 77 261/-. THE FILING OF APPEAL WAS THEREFORE AS PER INSTRUCTIONS. THE HON'BLE ITAT HAS QUOTED SECTION 268A BUT HAS NO T APPRECIATED THAT SUB-SECTION (4) ENJOINS ON IT THAT IT SHALL HAVE REGARD 4 TO ORDERS UNDER SUB-SECTION (1) AND CIRCUMSTANCES U NDER WHICH APPEAL WAS FILED. THE HON'BLE ITAT HAS NOT APPRECIATED THA T APPEAL WAS CORRECTLY FILED AND WAS IN ACCORD WITH INSTRUCTIONS PREVAILING ON THE DATE. THE RETROSPECTIVE OPERATION OF SECTION 268A S AVES INSTRUCTIONS ISSUED EARLIER TO ITS ENACTMENT BY GIVING THESE STA TUTORY FORCES. SUCH RETROSPECTIVE OPERATION CAN IN NO MANNER LEAD TO DI SMISSAL OF AN APPEAL ON THE BASIS OF INSTRUCTIONS ISSUED AFTER IT BEING FILED. 6. IN VIEW OF THE ABOVE EXPLAINED POSITION IT IS PRAYED THAT THE HON'BLE TRIBUNAL MAY KINDLY CONSIDER RE-CALLING THE ORDER DATED 13/10/2009 PASSED BY IT IN ITA NO.851/ALLD./04 AND RECONSID ER TH E ISSUE. 7. THIS MAY KINDLY BE TREATED AS A MISCELLANEOUS A PPLICATION U/S 254 OF THE I.T. ACT 1961. 3. DURING THE COURSE OF HEARING THE LD.D.R. REITER ATED THE CONTENTS OF THE AFORESAID MISCELLANEOUS APPLICATION AND REQUESTED T O RECALL THE ORDER DATED 13.10.2009. 4. IN HIS RIVAL SUBMISSIONS THE LD. COUNSEL FOR TH E ASSESSEE SUBMITTED THAT THE APPEAL OF THE DEPARTMENT WAS RIGHTLY DISMI SSED IN ACCORDANCE WITH THE PROVISIONS CONTAINED IN 268A OF THE I.T.ACT SIN CE THE TAX EFFECT WAS LESS THAN RS.2 LACS AND THE C.B.D.T. HAS DIRECTED IN IT S INSTRUCTIONS TO THE DEPARTMENT NOT TO FILE THE APPEALS IN THE CASES WH ERE THE TAX EFFECT IS LESS THAN RS.2 LACS. IT WAS ALSO STATED THAT THE CBDT I NSTRUCTIONS ARE BINDING ON THE DEPARTMENT AND IT CANNOT BE CONTENDED BY THE DEPARTMENT THAT THE CIRCULAR IS BINDING ONLY WITH RESPECT TO NEW CASES AND NOT WITH RESPECT TO OLD REFERRED CASES EVEN IF THE TAX EFFECT IS LESS THAN RS.2 LACS. RELIANCE WAS PLACED ON THE FOLLOWING CASE LAWS: 1. CIT VS. PITHWA ENGG. WORKS (2005) 276 ITR 519( BOM.) 2. CIT VS. POLYCOTT CORPORATION (2009) 318 ITR 144 (BOM.) 5 3. ACIT VS. RAJOO ENGINEERS LTD.(2006) 100 ITD 55 5(RAJKOT) 4. RAMJIBHAI P.CHAUDHRY VS. DY.CIT (2009) 314 ITR (AT)259(AHMEDABAD). 5. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PARTIES AND GONE THROUGH THE MATERIAL AVAILABLE ON RECORD. IN THE INSTANT CASE IT IS NOT IN DISPUTE THAT THE TAX EFFECT IN THIS CASE WAS LESS THAN RS.2 LACS. THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF PITHWA ENGG. WOR KS (SUPRA) HAS HELD AS UNDER : THE CENTRAL BOARD OF DIRECT TAXES BY ITS CIRCULAR DATED MARCH 27 2000 HAS TAKEN A POLICY DECISION NOT TO FILE REFER ENCES IF THE TAX EFFECT IS LESS THAN RS.2 LAKHS. THE CIRCULAR IS APPLICABLE EVEN TO THE OLD REFERENCES WHICH ARE STILL UNDECIDED. THE DEPARTMEN T CANNOT CONTEND THAT THE CIRCULAR IS BINDING ONLY WITH RESPECT TO T HE NEW CASES AND NOT WITH RESPECT TO THE OLD REFERRED CASES EVEN IF THE TAX IS LESS THAN RS.2 LAKHS. THE SAME POLICY FOR OLD MATTERS NEEDS TO BE ADOPTED BY THE DEPARTMENT. 5.1 IN VIEW OF THE RATIO LAID DOWN BY THE HON'BLE B OMBAY HIGH COURT IN THE AFORESAID REFERRED TO CASE IT CAN SAFELY BE H ELD THAT THE DEPARTMENT CANNOT CONTEND THAT THE CIRCULAR IS BINDING ONLY WI TH RESPECT TO THE NEW CASES AND NOT WITH RESPECT TO OLD REFERRED CASES EVEN IF THE TAX EFFECT IS LESS THAN RS.2 LACS AND THE SAME POLICY FOR OLD MATTERS NEED TO BE ADOPTED BY THE DEPARTMENT. AS WE HAVE ALREADY POINTED OUT THAT IN THE INSTANT CASE THE TAX EFFECT WAS LESS THAN RS.2 LACS THEREFORE THE APPEA L WAS RIGHTLY DISMISSED BY CONSIDERING THE PROVISIONS OF SECTION 268A OF THE A CT AND THE BOARDS 6 INSTRUCTIONS. WE DO NOT FIND ANY MERIT IN THIS MISC ELLANEOUS APPLICATION OF THE DEPARTMENT. 6. IN THE RESULT THE MISCELLANEOUS APPLICATION IS DISMISSED. THE ORDER PRONOUNCED IN THE OPEN COURT ON 17.9.20 10. SD. SD. (H.L.KARWA) (N.K.SAINI) VICE PRESIDENT ACCOUNTANT MEMBER SEPTEMBER 17TH 2010. COPY TO THE : 1. APPLICANT 2. RESPONDENT 3. CIT(A) (4) CIT 5.DR. A.R. ITAT LUCKNOW. SRIVASTAVA.