IN THE INCOME TAX APPELLATE TRIBUNAL,
MUMBAI BENCH I' BENCH
BEFORE SHRI B.R.MITTAL(JUDICIAL MEMBER) AND
SHRI N.K.BILLAIYA (ACCOUNTANT MEMBER)
ITA No.6490/Mum/2010
Assessment Year: 2006 -07
ACIT, Cent. Circle 24, Shri Jayaram K Shetty,
Mumbai. 215, B.C.I. Shed, Amroliwala Compound,
N.M.Joshi Marg, Mumbai-13.
Vs. PA No.AADPS 5939 D
(Appellant) (Respondent)
Appellant by : Shri Parthasarthi Naik
Respondent by: Shri Anand Raj Jain
Date of hearing: 7.6.2012
Date of pronouncement: 15. 6.2012
ORDER
Per B.R.Mittal, JM:
The department has filed this appeal for assessment year2006-07 against order
dated 14.6.2010 of ld CIT(A)-39, Mumbai on the following ground:
"On the facts and in the circumstances of the case and in law, ld CIT(A)
erred in directing the AO to delete the addition of Rs.5 lakhs made on
account of alleged payment made to Buntar Bhavana (Community Hall)
without appreciating the fact that the assessee has failed to (a) furnish
the PAN of the donors to establish their identities and (b) satisfactorily
explanation the circumstances under which donations were made to the
assessee concern instead of Buntar Bhavan directly."
2. At the time of hearing, attention of ld D.R. was drawn that the tax effect in this
appeal is approximately Rs.1.60 lakhs and since appeal was filed on 3.9.2010, why the
appeal of the department be not dismissed as the tax effect is below the prescribed
monetary limit for filing of the appeal before the ITAT i.e. Rs.2 lakhs as per CBDT
Circular No. 279/ Miasc-64/05 -ITJ dt.24.10.05 read with Instruction No.2/2005
dt.24.10.2005 and also Instruction No.5/2008 dated 15.5.2008. Ld D.R. submitted that
if the tax effect is taken together for this assessment year as well as for the subsequent
assessment year i.e. A.Y. 2007-08, it is more than Rs.2 lakhs. Hence, appeals of the
2
ITA No.6490/Mum/2010
Assessment Year: 2006 -07
department are not to be dismissed as they are not hit by the said CBDT circular
(supra).
3. During the course of hearing, attention of ld D.R. was also drawn that the orders
passed by ld CIT(A) are separate and, therefore, the monetary limit for each of the
assessment years have to be considered separately. Ld D.R. has not disputed the above
facts save and except reiterating that if the aggregate amount of tax effect is taken into
account for both the assessment years, the tax effect is more than Rs.3 lakhs for
assessment year 2007-08 and, therefore, the appeal for A.Y. 2006-07 is to be
considered on merits and not to be dismissed only on the ground that tax effect is less
than Rs.2 lakhs.
4. We have considered submissions of ld D.R. in the light of CBDT circulars (supra).
In this respect, we consider it necessary to refer the decision of Hon'ble Bombay High
Court in the case of CIT vs Polycott Corporation, 318 ITR 144(Bom). In the said case,
Their Lordships have held that if there is a composite order which involves more than
one year and if in respect of any one year in it, the tax effect exceeds the monetary limit
prescribed and decided by the revenue to file an appeal, then appeal shall be filed in
respect of all the assessment years, even in those cases, where the tax effect is less
than the monetary limit prescribed. However, it is a fact that the order of ld CIT(A) for
A.Y. 2006-07 is not a composite order but is the order only for A.Y. 2006-07. CBDT vide
Instruction No.5/2008 dated 15.5.2008 vide para 5 has clarified that the word `tax effect'
is to be considered for every assessment year in respect of the disputed issues in the
case of every assessee. Therefore, it is clarified as to whether monetary limit specified
should be considered in respect of each assessment year or should be taken together
for all the assessment years, where more than one assessment year is involved. We
observe that CBDT has stated that if in the case of an assessee, the disputed issue
arises in more than one assessment year, the appeals shall be filed in respect of such
assessment year/assessment years, in which tax effect in respect of disputed issue
exceeds the monetary limit specified in para 3, where the tax effect exceeds Rs.2 lakhs
for filing of the appeal before the Tribunal. It is further stated that no appeal shall be
filed in respect of assessment year/assessment years in which the tax effect is less than
3
ITA No.6490/Mum/2010
Assessment Year: 2006 -07
the money limit specified in para 3 i.e. tax effect does not exceed Rs.2 lakhs for filing
the appeal(s) before the Tribunal. Hence, the appeal will be filed only with reference to
the tax effect in the relevant assessment year henceforth. Therefore, as per Instruction
No.5/2008 dated 15.5.2008, the department is not to file appeal for any assessment
year(s) where the tax effect is below Rs.2 lakhs. Considering the above circular and the
fact that CBDT has been instructing its Officers since 1987 not to file appeal where the
tax effect is below the monetary limit, we hold that the appeal field by the assessee for
assessment year 2006-07 against the order of ld CIT(A) dt.14.6.2010 is not maintainable
and the same is liable to be dismissed. In this regard, we consider it prudent also to
refer the decision of Hon'ble apex court in the case of Commissioner of customs vs
Indian Oil Corporation ltd., 267 ITR 272, where Their Lordships after considering the
effect of circular issued by CBDT have held at page 277 with regard to binding nature of
the circular as under:
"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 revenue 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 department cannot be permitted to take
a stand contrary to the instructions issued by the Board.
3. A show cause notice and demand contrary to existing circulars of the Board
are ab initio void.
4. It is not open to the revenue to advance an argument or file an appeal
contrary to the circulars."
5. In view of above, appeal filed by department is not admitted and is being
dismissed in limine.
Pronounced in the court on 15th June, 2012
Sd/- Sd/-
(N.K.BILLAIYA) (B.R. MITTAL)
Accountant Member Judicial Member
Mumbai, Dated 15th June, 2012
4
ITA No.6490/Mum/2010
Assessment Year: 2006 -07
Parida
Copy to:
1. The appellant
2. The respondent
3. Commissioner of Income Tax (Appeals),39, Mumbai
4. Commissioner of Income Tax, Cent.II , Mumbai
5. Departmental Representative, Bench `I' Mumbai
//TRUE COPY// BY ORDER
ASSTT. REGISTRAR, ITAT, MUMBAI
|
