Shyam Constructions Co., vs Department Of Income Tax
- CitationITA No. 7358/Mum/2010)
Ratio decidendi
The rule this decision rests on
The Tribunal treats the CBDT monetary-limit instruction as binding in its own right: a circular fixing monetary limits for filing appeals applies to appeals already pending on the date of the instruction, so that the Revenue's appeal below the prescribed limit does not survive and the Tribunal may dispose of it on that basis. Where the Supreme Court has merely granted liberty to the Revenue to seek review in the High Court without deciding the point, that disposal lays down no ratio that the CBDT instruction is inapplicable to pending appeals; the High Court's own decision interpreting the instruction remains binding on the Tribunal within its jurisdiction, and the Tribunal is bound to follow it in the absence of any review or appeal against it.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
The aforesaid Miscellaneous Application has been filed by the Revenue on the ground that, ITAT vide order dated 20.05.2014 has dismissed the appeal of the department on account of tax effect being less than Rs. 3 lakhs as per CBDT Instruction no. 3/2011. It has been contended that, the said instruction is applicable w.e.f. 09.02.2011, whereas the appeal was filed by the revenue on 27.10.2010 and hence CBDT Instruction no. 5 of 2008 is applicable, which prescribes monitory limit of Rs. 2 lakhs. Here in this case tax effect is above Rs. 2 lakhs.
M.A. No. 403/Mum/2014 2 (Arising Out of ITA No. 7358/Mum/2010) M/s. Syam Constructions Co Assessment Year: 2005-06
2. Before us the Ld. DR submitted that the Hon'ble Supreme Court in the case of CIT Vs. Virgo Marketing Pvt. Ltd. in Special Leave appeal no. (Civil)-/2012(CC21705)/2011, vide order dated 06.01.2012, while considering the Delhi High Court judgment, held that the department should move to the High Court for review in view of para 11 of CBDT Instruction No. 3 of 2011 dated 09.02.2011. This order of the Supreme Court can be inferred to mean that instruction no. 3 of 2011 is not applicable to the pending appeals filed before, as para 11 envisages that the instruction is applicable on the appeals filed after 09.02.20111. Thus the order of the Tribunal should be recalled and be heard on merits.
3. On the other hand learned counsel for the assessee submitted that the Hon'ble Supreme Court decision in the case of Virgo Marketing does not have any effect on the orders and the judgments of the Hon'ble Bombay High Court. Moreover Supreme Court has mainly granted a liberty to the department to file review before the Delhi High Court which is applicable qua that case. Hence the same is not applicable in Bombay.
4. We have heard the rival submissions and also the miscellaneous application filed by the revenue. The appeal of the revenue was dismissed by the Tribunal on the ground that, tax effect of the issues raised was admittedly less than Rs. 3 lakhs and hence as per CBDT Instruction no. 3 of 2011 dated 09.02.2011, the appeal of the revenue does not survive, because the said instruction will apply to the pending appeals also. This was held after relying upon the two decisions of the Hon'ble Bombay High Court viz; (i) CIT Vs. Madhukar K. Inamdar (HUF), (2009) 318 ITR 149 (Bom); (ii) CIT Vs. Varsha Dilip Kolhe (2013) 350 ITR 248. The Ld. DR has strongly relied upon the order of the Supreme M.A. No. 403/Mum/2014 3 (Arising Out of ITA No. 7358/Mum/2010) M/s. Syam Constructions Co Assessment Year: 2005-06
Court in the case of VCIT Vs., Virgo Marketing Pvt. Ltd. (supra) to contend that now the Hon'ble Supreme Court has reversed this proposition. The Hon'ble Supreme Court in the SLP filed against judgment and order dated 21.04.2011 in ITA No. 1468 of 2006, passed by Delhi High Court held as under:
"Delay condoned.
In view of Para 11 of CBDT Instruction No. 3/2011 dated 9th February, 2011, liberty is granted to the Department to move the High Court by way of review within four weeks.
The special leave petition is, accordingly, disposed of."
In the aforesaid order the Hon'ble Supreme Court has merely given liberty to the department to move a review petition before the Hon'ble Delhi High Court. It has been informed by the Ld. DR before us that the Hon'ble Delhi High Court vide order dated 01.08.2013 has dismissed the revenue's appeal in the following manner:
ORDER "01.08.2013
This appeal by the Revenue, which pertains to Assessment Year 1999-2000, has to be dismissed in view of the fact that section 14A which was inserted by the Finance Act, 2001 with retrospective effect from 01.04.1962, specifically stipulates in the proviso that the Assessing Officer shall not reassess cases under section 147.
In the present case, return of the Assessment Year 1999-2000 was filed on 27.11.2000 and only intimation under section 143(1) was sent. Subsequently, re-assessment notice was issued.
In view of the aforesaid position, which has been clarified in Circular No. 8 of 2002, the appeal of the Revenue for this year is dismissed. It is clarified that dismissal of this appeal will not affect the other pending appeals."
M.A. No. 403/Mum/2014 4 (Arising Out of ITA No. 7358/Mum/2010) M/s. Syam Constructions Co Assessment Year: 2005-06
From the above, it cannot be held that ratio decedendi has been laid down either by the Supreme Court or by the Delhi High Court that the CBDT instruction no. 3/2011 is not applicable for the pending appeals. Further the revenue has not filed any review petition against the decisions of the Bombay High Court, nor it has been bought before us that any SLP has been filed before the Hon'ble Supreme Court against the said decisions. In such a situation the decision of the Hon'ble Jurisdictional High Court is still binding upon the Tribunal, as the Hon'ble Jurisdictional High Court has categorically reiterated that, CBDT instructions laying down monetary limits for filing of appeals are applicable for the pending appeals also. Their Lordships have interpreted similar paragraph of CBDT instruction no. 5 of 2008 dated 15.05.2008 and also para 11 of instruction no. 3 of 2011. Thus, respectfully following the binding precedence of jurisdictional High Court, we hold that CBDT Instruction no. 3 of 2011 dated 09.02.2011 will be applicable on the pending appeals also. Accordingly miscellaneous application filed by the revenue is dismissed.
5. In the result, the Miscellaneous Application filed by the Revenue is dismissed.
Order pronounced in the open court on this 16th day of January, 2015.
Sd/- Sd/- (SANJAY ARORA) (AMIT SHUKLA) ACCOUNTANT MEMBER JUDICIAL MEMBER
Mumbai, Dated: 16.01.2015 *Srivastava M.A. No. 403/Mum/2014 5 (Arising Out of ITA No. 7358/Mum/2010) M/s. Syam Constructions Co Assessment Year: 2005-06
Copy to: The Appellant The Respondent The CIT, Concerned, Mumbai The CIT(A) Concerned, Mumbai The DR "E" Bench
//True Copy//
By Order
Dy/Asstt. Registrar, ITAT, Mumbai.
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