IN INCOME TAX APPELLATE TRIBUNALAHMEDABAD BENCHES, B BENCH AHMEDABAD BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER AND SHRI PRADIP KUMR KEDIA, ACCOUNTANT MEMBER ITA No.747/Ahd/2016 Assessment Year 2012-13 ITO Ward2(2)(1) Ahmedabad / Vs. Shri Ashokbhai Chinubhai Bharwad 43/4, Bharwad Vas Near Kiran Park Nava Vadaj Ahmedabad-380003 (Appellant) (Revenue )
P.A. No.ABNPB5671N Appellant by Shri Satish Solanki, Sr. D.R. Respondent by Smt. Urvashi Sodhan, A.R. Date of Hearing: 18.09.2019 Date of Pronouncement: 18.09.2019 ORDER PER KUL BHARAT, J.M: This appeal by revenue is directed against order of Ld. CIT(A)-10, Ahmedabad dated 11.1.2016 for A.Y.
2012-13. ITA No.747/Ahd/2016 Shri Ashokbhai Chinubhai Bharwad, Ahmedabad 2 2. When this appeal is taken up for hearing, Ld. Counsel for assessee has submitted that this appeal is not maintainable in view of CBDTs circular No.3/2018 and subsequent amendment thereto dated 8th August, 2019. It was also submitted that under identical facts, coordinate bench of this Tribunal vide order dated 14.8.2019 in ITA No.1398/Ahd/2004 and others and in case of ITO Vs. Dinesh Madhavlal Patel has dismissed revenues appeals rejecting objections of revenue. 3. We have considered rival submissions and gone through records. It is noted that in this appeal, tax effect is below monetary limits of Rs.50 lakhs as prescribed under CBDT circular No.3/2018 dated 8th August, 2019 (supra). coordinate bench of this Tribunal in ITA No.1398/Ahd/2004 and others in case of ITO Vs. Dinesh Madhavlal Patel (supra) decided issue by holding as under: ITA No.747/Ahd/2016 Shri Ashokbhai Chinubhai Bharwad, Ahmedabad3 1. These 628 appeals and COs pertain to appeals are filed by various Assessing Officers, all these appeals call into question correctness of relief granted to taxpayers by Commissioners of Income Tax (Appeals) and, most importantly, tax effect involved in all these appeals does not exceed Rs 50,00,000 in each of these appeals. cross objections taken up for hearing are only such cross objections as emanate from these appeals and are broadly in support of orders passed by the
Commissioner (Appeals). In these cases, in light of discussions with Principal Chief Commissioner of Income Tax (Gujarat) and representatives of Ahmedabad ITAT Bar Association, individual notices are dispensed with; notices of hearing are given only through notice board. 2. It is in this backdrop that we are pleased to take note of very pragmatic and taxpayer friendly policy decision by Government of India for reducing income tax litigation. Vide CBDT circular dated 8th August, 2019, income tax department has further liberalized its policy for not
filing appeals against decisions of appellate authorities in favour of taxpayers, wherein tax involved is below certain threshold limits, and announced its policy decision not to file, or press, appeals, before this Tribunal, against appellate orders favourable to assessee in cases in which overall tax effect, excluding interest except when interest itself is in dispute, is Rs 50,00,000 or less. What it means, in plain words, is that when Commissioner (Appeals) gives taxpayer tax relief of upto Rs 50 lakhs in appeal in assessment year, matter ends there and relief so granted by Commissioner (Appeals) cannot be challenged before this Tribunal, that when this Tribunal gives taxpayer relief of upto Rs 1 crore in appeal in assessment year, matter ends there and relief so granted by Tribunal cannot be challenged before Honble High Court, and thatwhen Honble High Court gives relief of upto Rs 2 crore to taxpayer in an
appeal in assessment year, that relief cannot be challenged before Honble Supreme Court. These monetary threshold limits for filing of appeals by income tax authorities do not take into account interest and other corollaries of tax demands being confirmed such as penalties, except when penalty itself is subject matter of litigation, and prosecutions. enhancement of these monetary limits is at unprecedented scale. monetary limit for appeals before this Tribunal, which was Rs 3,00,000 till 10th July 2014, has been in effect enhanced to almost 1,700% in last five years. This substantial relaxation is certainly huge step which signifies trust reposed by Government of India in decisions of appellate forums, and substantially cuts down time taken in finality of appellate process. It is indeed heartening to note that in ITA No.747/Ahd/2016 Shri Ashokbhai Chinubhai Bharwad, Ahmedabad one stroke, Government has not only prevented, but has, in effect, set stage for withdrawal of thousands of appeals before this Tribunal and before Honble Courts above. In environment in which retrospectively was attached only to taxation and not to tax reliefs or concessions, such approach is pleasant departure from legacy practices. 3. In view of above factual background and generous concession by this benevolent CBDT circular, all these appeals must be dismissed as withdrawn and related cross objections must be dismissed as infructuous. There is, however, small issue that we must deal with. 4. Smt Aparna Agarwal, learned Departmental Representative, however, has point to make. She points out that circular dated 8th August 2019 is not clearly retrospective inasmuch as it specifically states in para 4 that (t)he said modifications shall come into effect from date of issue of this Circular. It is thus pointed out that this sentence gives impression that is only after date of said circular that departmental appeals will not be filed in cases within specified tax effect limits. We are urged to bear in mind impact of this observation while giving effect to circular dated 8th August, 2019. She, however, hastens to add that she is yet to have any specific instructions on issue and she leaves it for bench to take appropriate call. Learned representatives appearing for taxpayers vehemently oppose suggestion implicit in her submissions. All of them are unanimous in their argument that circular must be held to have retrospective application and must equally apply to pending appeals as well. Shri J P Shah, Senior Advocate, points out that circular dated 8th August 2019 is not standalone circular and it is required to be read with old circular no. 3 of 2018 which is what it seeks to modify. This circular, according to learned counsel, only enhances monetary limits and gives further relaxation. He urges us not to read circular in manner so as to nullify underlying approach and object of reducing litigation. Shri Soparkar, learned Senior Advocate, submits that all that present circular does is to modify monetary limits and nothing more, and, therefore, it cannot be treated to follow any other approach other than approach followed in old circular. old circular, beyond any dispute or controversy, categorically applied to pending appeals as on date of issuance of circular. Shri Tushar Hemani, learned Senior Advocate, points out that circular dated 8th August 2019 only gives further relief not only in terms of monetary limits but also in terms of manner in which application of circular to orders dealing with more than one year is to made. Shri S N
Divetia, learned counsel for assessee, submits that unlike in cases of earlier CBDT circulars, which used to be in supersession of earlier circulars on issues, circular dated 8th August 2019 only modifies earlier circular which, inter alia, provided for its retrospective application. ITA No.747/Ahd/2016 Shri Ashokbhai Chinubhai Bharwad, Ahmedabad 5 Our attention is invited to some judicial precedents in support of contention that benevolent circular, such as one in question, is to be given effect in respect of pending appeals as well. Ms Urvashi Shodhan, learned counsel for assessee, points outs that its plainly contrary to scheme of litigation policy of Government of India to give this circular only prospective effect. Shri S K Sadhwani, learned counsel for assessee, invites our attention to letter dated 16th July 2018 issued by Member CBDT to all Principal Chief Commissioners of Income Tax, in context of circular dated 11th July 2018 that present circular seeks to modify, seeking report on withdrawal of appeals covered by circular. He then points out that it is old circular is still alive today and only change is with respect to monetary limits. In all fairness, therefore, same approach regarding withdrawal of pending appeals must be followed for this circular as well. On same lines, arguments are advanced by learned representatives which, for sake of brevity and to avoid repetition, we are not referring to in more specific details. In brief rejoinder, learned Departmental Representative graciously leaves matter to us. 5. Having considered rival submissions and having perused material on record, we do not have slightest of hesitation in holding that concession extended by CBDT not only applies to appeals to be filed in future but it is also equally applicable to appeals pending for disposal as on now. Our line of reasoning is this. circular dated 8th August 2019 is not standalone circular. It is to be read in conjunction with CBDT circular no 3 of 2018 (and subsequent amendment thereto), and all it does is to replace paragraph nos. 3 and 5 of said circular. This is evident from following extracts from circular dated 8th August 2019: 2. As step towards further management of litigation. it has been decided by Board that monetary limits for filing of appeals in income-tax cases be enhanced further through amendment in Para 3 of Circular mentioned above and accordingly. table for monetary limits specified in Para 3 of Circular shall read as follows: S.No. Appeals/SLPs in Income-tax matters Monetary Limit (Rs.) 1 Before Appellate Tribunal 50,00,000 2 Before High Court 1,00,00,000 3 Before Supreme Court 2,00,00,000 3. Further, with view to provide parity in filing of appeals in scenarios where separate order is passed by higher appellate authorities for each assessment year vis-a-vis where composite order for more than one assessment years is passed. para 5 of circular is substituted by following para: ITA No.747/Ahd/2016 Shri Ashokbhai Chinubhai Bharwad, Ahmedabad 6 5. Assessing Officer shall calculate tax effect separately for every assessment year in respect of disputed issues in case of every assessee. If in case of assessee, disputed issues arise in more than one assessment year, appeal can be filed in respect of such assessment year or years in which tax effect in respect of disputed issues exceeds monetary limit specified in para 3. Noappeal shall be filed in respect of assessment year or years in which tax effect is less than monetary limit specified in para 3. Further, even in case of 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 no appeal shall be filed in respect of assessment year or years in which tax effect is less than monetary limit specified in para 3. In case where composite order/ judgement involves more than
one assessee, each assessee shall be dealt with separately 4. said modifications shall come into effect from date of issue of this Circular. 6. Clearly, all other portions of circular no. 3 of 2018 (supra) have remained intact. portion which has remained intact includes paragraph 13 of aforesaid circular which is as follows: 13. This Circular will apply to SLPs/ appeals/ cross objections/ references to be filed henceforth in SC/HCs/Tribunal and it shall also apply retrospectively to pending SLPs/ appeals/cross objections/references. Pending appeals below the
specified tax limits in pare 3 above may be withdrawn/ not pressed. 7. In view of above discussions, we hereby hold that relaxation in monetary limits for departmental appeals, vide CBDT circular dated 8th August 2019 (supra) shall be applicable to pending appeals in addition to appeals to be filed henceforth.
8. Learned Commissioner (DR) then submits liberty may kindly be given to point out, upon necessary further verifications, and to seek recall dismissal of appeals and restoration of appeals in cases (i) in which it can be demonstrated that appeals are covered by exceptions, and (ii) which are inadvertently included in this bunch of appeals, wherein tax effect, in terms of CBDT circular (supra), exceeds Rs 50,00,000. None opposes this prayer; we accept same. We make it clear that appellants shall be at liberty to point out cases which are wrongly
included in appeals so summarily dismissed, either owing to wrong ITA No.747/Ahd/2016 Shri Ashokbhai Chinubhai Bharwad, Ahmedabad 7 computation of tax effect or owning to such cases being covered by permissible exceptions- or for any other reason, and we will take appropriate remedial steps in this regard.
9. In light of above discussions, all appeals stand dismissed as withdrawn. As appeals filed by Revenue are found to be nonmaintainable and as all related cross-objections of assessee arise only as result of those appeals and merely support order of CIT(A), cross objections filed by assessee are also dismissed as infructuous. Ordered, accordingly. 10. As we part with matter, we must place on record our deep appreciation to our own team which has painstakingly identified all these low tax effect appeals in long weekend and less than two working days, to Principal Chief Commissioner of Income Tax Gujarat, as also learned Departmental Representatives, for his immense help, cooperation and active involvement in speedily disposing of these appeals, and, of
course, to ITAT Bar Association Ahmedabad for their whole hearted cooperation in this special drive. circular was issued on Thursday 8th August 2019, and within two working days and long weekend, today on 14th August 2019, all appeals stand disposed of. Its only team effort and whole hearted cooperation of all stakeholders that can enable us to so speedily implement taxpayer friendly initiatives of Government of India.The taxpayer relief involved in these appeals, including interest and other corollaries, is estimated to be well over Rs 350 crores. lead case before us is appeal filed over fifteen years ago by Income Tax Officer and it deals with assessment year which pertains to period over twenty years ago. Yet, matter had not reached finality and revenues challenge to relief granted by Commissioner (Appeals) had remained undecided. That is nothing but prolonged agony of uncertainty to taxpayers. It is indeed appreciable goodwill gesture by Government, for so many taxpayers, on eve of this Independence Day and offering them freedom from prolonged
mental agony and uncertainty of litigation. 11. In results, all appeals are dismissed as withdrawn and cross objections are dismissed as infructuous. Pronounced in open court today on 14th August, 2019. 4. Respectfully following decision of coordinate bench, we hereby dismiss appeal of revenue in limine without going to merits of case. ITA No.747/Ahd/2016
Shri Ashokbhai Chinubhai Bharwad, Ahmedabad 8 5. In result, Departmental appeal filed by revenue is dismissed. Order was pronounced in open court on 18.09.2019. Sd/- (PRADIP KUMAR KEDIA) Sd/- (KUL BHARAT) ACCOUNTANT MEMBER JUDICIALMEMBER Ahmedabad; Dated : 18/09/2019 VG/SPS Copy to: Assessee/AO/Pr. CIT/ CIT (A)/ITAT (DR)/Guard file. By order Assistant Registrar, Ahmedabad ITO, Ward-2(2)(1), Ahmedabad v. Ashokbhai Chinubhai Bharwad