IN THE INCOME TAX APPELLATE TRIBUNAL,
KOLKATA 'B' BENCH, KOLKATA
Before Shri Pramod Kumar (Accountant Member),
and Shri Mahavir Singh (Judicial Member)
I. T.A. No.: 146 5/ Kol. / 2 012
Asse ssment yea r : 20 03-04
Deputy Commi ssione r of Income Tax,..........................Appe llant
Circl e-1, Kol kata,
Aayaka r Bh avan, 7 t h floo r,
P-7, C how ringhe e Squa re,
Kolka ta-700 069
-Vs.-
M/ s. Am ri t Bo ttl ers (P) Ltd.,...................................R espond ent,
18, Debson Lan e,
Liluah,
How rah -7 11 10 1
[PAN : AACC A 4794 J]
Appearances by:
D.K. Rakshit, Sr. D.R., for the Appellant
Ajay K. Gupta, for the Respondent
Date of co ncluding t he hea ri ng : Mar ch 0 8, 2013
Date of prono unci ng the o rde r : Ma rch 08, 20 13
O R D E R
Per Pramod Kumar :
1. By way of this appeal, the Assessing Officer has challenged correctness of the order of learned Commissioner of Income Tax (Appeals) dated 16 t h July, 2012 in the matter of assessment under section 143(3) r. w.s. 147/251 of the Income Tax Act, 1961, for the assessment year 2003-04 on the following grounds :-
(1)That on the facts and in the circumstances of the case, the ld. CIT(A) erred in q uashing the proceedings under section 147 without considering the assessee did no t I . T. A . N o . 1 4 6 5 / K o l . / 2 0 1 2 A s s e s s m e nt y e ar : 2 0 0 3- 0 4 Page 2 of 7 dis close fully and truly income and also ignoring that the reopening was duly approved by the Commissioner of Income Tax.
(2) That on the facts and in the cir cumstances of the case, the ld. CIT(A) was not justified in allowing depreciation @50% instead of 25% on the plastic crates without considering that these are not used for filling or refilling purposes.
2. When this appeal came up for hearing, it was noticed that the tax effect involved in this appeal is less than Rs.3 lacs. It was in this backdrop that the ld. Departmental Representative was asked as to why the appeal should not be dismissed as non-maintainable on the ground that the amount involved in appeal is less than the monetary limit of Rs.3 lacs as per CBDT Instructions No. 3/2011 issued on 09.02.2011. Ld. Departmental Representative fairly stated that in case the tax effect involved in appeal is less than the prescribed limit of Rs.3 lacs, he has nothing much to say. He, however, relied upon the stand of the Assessing Officer.
3. We find that the Coordinate Bench of this Tribunal is speaking throu gh one of us, i.e. ld. Judicial Member, in the case of ITO -vs.- Ashish Construction in ITA No. 1417/Kol./2009, A.Y. 1993-94 dated 13.01.2012 has observed as follows :-
"This appeal by revenue is arising out of order of CIT(A), Central-1, Kolkata in Appeal No. 123/CC-II/C IT(A), C-1/08-09 dated 04.05.2009. Assessment was framed b y ACIT, CC-II, Kolkata u/s 143(3)/254 of the Income Tax Act, 1961 (hereinafter referred to as "the Act") for Assessment Year 1993-94 vide his order dated 20.03.2006.
2. At the time of hearing, ld. couns el for the assessee stated that that tax effect in this appeal of the revenue is I . T. A . N o . 1 4 6 5 / K o l . / 2 0 1 2 A s s e s s m e nt y e ar : 2 0 0 3- 0 4 Page 3 of 7 below the pres cribed monetary limits for filing of appeal before ITAT and other superior courts. It seems that the revenue's appeal, the amount in dispute involved is Rs.5,25,260/- on which tax demand to be raised on the assessee is Rs.2,15,202/-. The only issue now remains before us is that the appeal of the revenue is below the pres cribe d limit of tax effe ct in vie w of the Board's Instruction issue d from time to time revising the monetary limits for filing o f appeals by the Department before ITAT and other superior courts. The appeal relates to assessment year 1993-94 and filed before the Tribunal on 18.07.2011. Since this appeal filed on 17.08.2009, the same will be covered by Instr uction No. 3/2011 issued on 09.02.2011, i.e. the revised monetary limit for filing of appeal before ITAT, whereby the CBDT has fixed the limit of Rs.3 lacs. Hon'ble Delhi High Court in the case of CIT -vs.- Delhi Race Club in ITA No. 128/2008 dated 03.03.2011 has held as under :-
"The tax effe ct involved in the present appeal is Rs.4,65,860/-. As per the recent guidelines of the CBDT, appeal in those cases where the tax effect is less than 10 lacs, are not to be entertained.
This court in the case of Commissioner of Income Tax-III v. M/s. P.S. Jain and Co. being ITA No. 179/1991 decided on 2 n d August, 2010 has taken a view that such circular would also apply to pending cases".
In view of the decision of Hon'ble Delhi High Court, the revised monetary limit of Rs.3 lacs as per Ins truction No. 3/2011 will apply to pending appeals.
The relevant circular issued by CBDT reads as under:
"INSTRUCTION NO. 3/2011 [F. NO. 279/MISC. 142/2007-ITJ], DATED 9-2-2011 Reference is Invited to Board's instruction No. 5/2008 dated 15-5-2008 wherein monetary limits and other conditions for filing departmental appeals (In Income-tax matters) before Appellate Tribunal, High Courts and Supreme Court were specified.
2. In supersession of the above instruction, it has been decided by the Board that departmental appeals may be filed on merits before Appellate Tribunal, High Courts and Supreme Court keeping in view the monetary limits and conditions specified below.
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3. Henceforth appeals shall not be filed in cases where 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 25,00,000 It is clarified that an appeal should not be filed merely because the tax effect in a case exceeds the monetary limits prescribed above. 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 have been chargeable had such total income been reduced by the amount of income in respect of the issues against which appeal is intended to be filed (hereinafter referred to as "disputed Issues"). However the tax will not include any interest thereon, except where chargeability of interest itself is in dispute. In case the chargeability of interest is the issue under dispute, the amount of interest shall be the tax effect. In cases where returned loss is reduced or assessed as income, the tax effect would include notional tax on disputed additions. In case of penalty orders, the tax effect will mean quantum of penalty deleted or reduced in the order to be appealed against.
5. The Assessing Officer shall calculate the tax effect separately for every assessment year in respect of the disputed issues in the case of every assessee. If, in the case of an assessee, the disputed issues arise in more than one assessment year, appeal, can be filed in respect of such assessment year or years in which the tax effect in respect of the disputed issues exceeds the monetary limit specified in para 3. No appeal shall be filed in respect of an assessment year or years in which the tax effect is less than the monetary limit specified in para 3. In other words, henceforth, appeals can be filed only with reference to the tax effect in the relevant assessment year. However, in case of a composite order of any High Court or appellate authority, which involves more than one assessment year and common issues in more than one assessment year, appeal shall be filed in respect of all such assessment years even if the 'tax effect' is less than the prescribed monetary limits in any of the year(s), if it is decided to file appeal in respect of the year(s) in which 'tax effect' exceeds the monetary limit prescribed. In case where a composite order/judgment involves more than one assessee, each assessee shall be dealt with separately.
6. In a case where appeal before a Tribunal or a Court is not filed only on account of the tax effect being less than the monetary limit specified above, the Commissioner of Income-tax shall specifically record that "even though the decision is not acceptable, appeal is not being filed only on the consideration that the tax effect is less than the monetary limit specified in this instruction". Further, in such cases, there will be no presumption that the Income-tax Department has acquiesced in the decision on the I . T. A . N o . 1 4 6 5 / K o l . / 2 0 1 2 A s s e s s m e nt y e ar : 2 0 0 3- 0 4 Page 5 of 7 disputed issues. The Income-tax Department shall not be precluded from filing an appeal against the disputed issues in the case of the same assessee for any other assessment year, or in the case of any other assessee for the same or any other assessment year, if the tax effect exceeds the specified monetary limits.
7. In the past, a number of instances have come to the notice of the Board, whereby an assessee has claimed relief from the Tribunal or the Court only on the ground that the Department has implicitly accepted the decision of the Tribunal or Court in the case of the assessee for any other assessment year or in the case of any other assessee for the same or any other assessment year, by not filing an appeal on the same disputed issues. The Departmental representatives/counsels must make every effort to bring to the notice of the Tribunal or the Court that the appeal in such cases was not filed or not admitted only for the reason of the tax effect being less than the specified monetary limit and, therefore, no inference should be drawn that the decisions rendered therein were acceptable to the Department. Accordingly, they should impress upon the Tribunal or the Court that such cases do not have any precedent value. As the evidence of not filing appeal due to this instruction may have to be produced in courts, the judicial folders in the office of CsIT must be maintained in a Systemic manner for easy retrieval.
8. Adverse judgments relating to the following issues should be contested on merits notwithstanding that the tax effect entailed is less than the monetary limits specified in para 3 above 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 Circular has been held to be illegal or ultra vires, or c. Where Revenue Audit objection in the case has been accepted by the Department.
9. The proposal for filing Special Leave Petition under Article 136 of the Constitution before the Supreme Court should, in all cases, be sent to the Directorate of Income- tax (Legal & Research), New Delhi and the decision to file Special Leave Petition shall be in consultation with the Ministry of Law and Justice.
10. The monetary limits specified in para 3 above shall not apply to writ matters and direct tax matters other than Income-tax, filing of appeals in other direct tax matters shall continue to be governed by relevant provisions of statute and rules. Further, filing of appeal in cases of Income-tax, where the tax effect is not quantifiable or not involved, such as the case of registration of trusts or institutions under section 12A of the IT Act, 1961, shall not be governed by the limits specified in para 3 above and decision to file appeal in such cases may be taken on merits of a particular case.
11. This instruction will apply to appeals filed on or after 09.02.2011. However, the cases where appeals have been filed before 09.02.2011 will be governed by the instructions on this subject, operative at the time when such appeal was filed.
12. This issues under section 268(1) of the Income Tax Act, 1961."
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3. On query from the Bench, the ld. DR could not point out any of the exceptions as provided in the Circular as under :-
(a) that this is a loss case having tax effect more than the prescribed limit, which should be taken into account.
(b) that this is a composite order for many assessment years where tax effect will be more than the prescribed limit as per para 5 of above instructions.
(c) that there is other year pending as disputed on the singular issue.
(d) that in the case of revenue, where constitutional validity of the provisions of the Act or I.T. Rules 1962 are under challenge.
(e) that Board's order, Notification, Instruction or Circular has been held to be illegal or ultra vires.
(f) that Revenue Audit Objection in the case has been accepted by the Department and the same is under challenge.
The ld. D.R. could not point out any of the exceptions as provided above. Accordingly, this being a tax effect case, we dismiss the appeal of the revenue in limine without going into merits and as unadmitted".
4. Respectfully following the view so taken by the Coordinate Bench and having noted that it is not a case of a composite order passed by the ld. CIT(Appeals) wherein total tax effect involved is more than the prescribed limit, we decline to address ourselves to the merits of the case and dismiss the appeal of the Revenue in limine on the ground that the tax effect involved in this case is less than the minimum threshold of cases wherein appeals can be filed before this Tribunal. Accordingly, the appeal is dismissed.
5. In the result, the appeal filed by the Revenue is dismissed.
Order pronounced in the open Court on 8 t h day of March, 2013.
Sd/- Sd/-
Mahavir Singh Pramod Kumar
(Judicial Member) (Accountant Member)
Kolkata, the 08 t h day of March, 2013
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Copies to : (1) Th e assessee
(2) Th e D ep artment
(3) Commi ssion er of In come-tax (Ap peals)
(4) Commi ssi oner of Inc ome T ax
(5) Th e D ep artment al Rep resentativ e
(6) Guard File
By order
Assis tant Registrar
Income Tax Appe llate Tribunal
Kolkata benches, Kolkata
Laha/Sr. P.S.
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