Haryana Capfin Ltd., New Delhi vs Department Of Income Tax
- CitationITA No. 4152/Del/2013
Ratio decidendi
The rule this decision rests on
The Revenue's appeal must be dismissed without adjudication on the merits where the tax effect of the appeal is below the monetary limit fixed by the Board under section 268A of the Income Tax Act, 1961, since the Board's instructions issued under that section are binding on income-tax authorities and bar the filing of such an appeal. Instructions issued by the Central Board of Direct Taxes under section 268A(1) fixing monetary limits for filing appeals are binding on the income-tax authorities, so that an appeal by the Department whose tax effect falls below the prescribed limit ought not to have been filed. A monetary limit fixed by a CBDT instruction applies to appeals pending on the date of the instruction, and not only to appeals filed after it, so that the revised limit governs the pending appeal before the Tribunal.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
DCIT, vs. M/s Haryana Capfin Ltd., CIRCLE 12(1), 2nd floor, 5, Pusa Road, NEW DELHI New Delhi - 5 PAN: AAACH8722K (Appellant) (Respondent)
Appellant by : Sh. Robin Rawal, Sr. DR Respondent by : None
Date of Hearing : 29-01-2015 Date of Order : 30-01-2015
ORDER
PER H.S. SIDHU, J.M.
This appeal by the Department is directed against the order dated 12/04/2013 of Ld. CIT(A)-XV, New Delhi.
2. The grounds raised in the appeal of the Department read as under:
1. "Whether Ld. CIT(A) was correct on facts and circumstances of the case and in law in deleting the addition of Rs. 10,53,120/- made by the AO u/s. 14A r.w.r. 8D of the IT Act, 1961?
2. Whether Ld. CIT(A) was correct on facts and circumstances of the case and in law in deleting the addition of Rs. 10,53,120/- made by the AO holding that the AO has not mentioned cogent reasons for invoking rule 8D despite the fact that AO specifically held that the investment being a conscious decision and having deployment of funds which brings into picture expenditure by way of cost of funds;
and in the case of assessee simultaneously doing business of shares thus the expense are mixed in such a way that they can not be segregated?
ITA No. 4152/DEL/2013 (DCIT VS. HARYANA CAPFIN LTD) 2 3. The appellant craves leave, to add, alter or amend any ground of appeal raised above at the time of the hearing."
3. Notice was sent to the assessee on the address given by it, however, none appeared on behalf of the assessee nor any request for adjournment is filed. In view of the above, we are of the considered opinion that no useful purpose would be served to adjourn the case again and again. Therefore, we are deciding the Revenue Appeal's exparte qua assessee, after hearing the Ld. DR and perusing the records available on record. At the threshold we find that the tax effect in this appeal is less than Rs. 4,00,000/-, therefore, the Department ought not to have filed this appeal in view of the circular issued by the CBDT and the provisions contained in the section 268A of the Income Tax Act, 1961 (hereinafter to be referred as the Act).
4. Ld. DR supported the order of AO, but could not controvert this fact that the tax effect in this appeal is less than Rs. 4,00,000/-.
5. After considering the submissions of both the parties and the material on record, it is noticed that section 268A has been inserted by the Finance Act, 2008 with retrospective effect from 01/04/1999. The relevant provisions contained in section 268A read as under:
"268A. (1) The Board may, from time to time, issue orders, instructions or directions to other income-tax authorities, fixing such monetary limits as it may deem fit, for the purpose of regulating filing of appeal or application for reference by any income-tax authority under the provisions of this Chapter.
(2) Where, in pursuance of the orders, instructions or directions issued under sub-section (1), an income-tax authority has not filed any appeal or application for reference on any issue in the case of an assessee for any assessment year, it shall not preclude such authority from filing an appeal or application for reference on the same issue in the case of -
(a) the same assessee for any other assessment year; or
(b) any other assessee for the same or any other assessment year; (3) Notwithstanding that no appeal or application for reference has been filed by an income-tax authority pursuant to the orders or ITA No. 4152/DEL/2013 (DCIT VS. HARYANA CAPFIN LTD) 3
instructions or directions issued under sub-section (1), it shall not be lawful for an assessee, being a party in any appeal or reference, to contend that the income-tax authority has acquiesced in the decision on the disputed issue by not filing an appeal or application for reference in any case.
(4) The Appellate Tribunal or Court, hearing such appeal or reference, shall have regard to the orders, instructions or directions issued under sub-section (1) and the circumstances under which such appeal or application for reference was filed or not filed in respect of any case.
(5) Every order, instruction or direction which has been issued by the Board fixing monetary limits for filing an appeal or application for reference shall be deemed to have been issued under sub-section (1) and the provisions of sub-sections (2), (3) and (4) shall apply accordingly."
6. It is not in dispute that the Board's instruction or directions issued to the other income-tax authorities are binding on those authorities, therefore, the Department ought not to have filed the appeal in view of the above mentioned section 268A since the tax effect in the instant case is less than the amount prescribed for not filing the appeal.
7. It is noticed that the CBDT has issued Instruction No. 5/2014 dated 10th July, 2014, by which the CBDT has revised the monetary limit to Rs. 4,00,000/- for filing the appeal before the Tribunal.
8. Keeping in view the CBDT Instruction No. 5 of 2014 dated 10th July, 2014 and also the provisions of section 268A of Income Tax Act, 1961, we are of the view that the Revenue should not have filed the instant appeal before the Tribunal. While taking such a view, we are fortified by the following decisions of the Hon'ble Punjab & Haryana High Court:
1. CIT vs. Oscar Laboratories P. Ltd. (2010) 324 ITR 115 (P&H);
2. CIT vs. Abinash Gupta (2010) 327 ITR 619 (P&H);
3. CIT vs. Varindera Construction Co. (2011) 331 ITR 449 (P&H) (FB).
9. Similarly, the Hon'ble Delhi High Court in the case of CIT vs. Delhi
Race Club Ltd. in ITA No. 128/2008, order dated 03.03.2011 by following
the earlier order dated 02.08.2010 in ITA No. 179/1991 in the case of CIT ITA No. 4152/DEL/2013 (DCIT VS. HARYANA CAPFIN LTD) 4
Delhi-III vs. M/s P.S. Jain & Co. held that such circular would also be
applicable to pending cases.
10. Thus, from the ratio laid down by the Hon'bl Delhi High Court, it is
clear that the instructions issued in the circulars by CBDT are applicable for
pending cases also. Therefore, by keeping in view the ratio laid down in
the aforesaid referred to case, we are of the considered view that
Instruction No. 5 of 2014 dated 10th July, 2014 issued by the CBDT are
applicable for the pending cases also and in the said instructions, monetary
tax limit for not filing the appeal before the ITAT is Rs. 4,00,000/-.
11. In view of the above, without going into merit of the case, we dismiss
the appeal filed by the Revenue.
12. In the result, appeal of the Revenue is dismissed.
Order pronounced in the open court on 30/1/2015.
Sd/- Sd/- (J.S. REDDY) (H.S. SIDHU) ACCOUNTANT MEMBER JUDICIAL MEMBER
Dated: 30/1/2015 *SR BHATNAGAR* Copy forwarded to: - 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR, ITAT TRUE COPY By Order,
ASSISTANT REGISTRAR
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