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Income Tax Appellate Tribunal, DIVISION BENCH, ‘B’, CHANDIGARH
Before: SHRI SANJAY GARG & Ms. ANNAPURNA GUPTA
आदेश/ORDER Per Sanjay Garg, Judicial Member :
The present cross appeals preferred by the assessee and Revenue are against the order dated 22.8.2017 of Commissioner of Income Tax (Appeals)-I, Ludhiana [hereinafter referred to as ‘CIT(A)’]
ITA No.182-C-2018 & 1512-C-17 2 M/s Vardhman Acrylics Limited Ludhiana
First, we shall deal with the appeal filed by the
assessee in ITA No. 1512/Chd/2017.
The sole dispute involved in this appeal is relating to
disallowance of expenditure u/s 14A of the Income-tax Act,
1961 (in short 'the Act') read with rule 8D(2(iii)of the
I.T.Rules.
The Ld. CIT(A) while making/confirming the
disallowance has applied the amended Rule effective from
2.6.2016. The Ld. Counsel for the assessee has submitted
that the assessment year under consideration is assessment
year 2014-15 and that the amended rule is to be applied
prospectively. He, therefore, has submitted that the matter
needs to be restored to the file of the CIT(A) to apply the
relevant rules, as were enforceable for the assessment year
under consideration. The Ld. Counsel for the assessee in
this respect has relied upon the decision of Hon'ble
Supreme Court in ‘CIT Vs. Essar Teleholdings Ltd., [2018]
90 taxmann.com 2 (SC)
We find that now it has been held by the Hon'ble
Supreme Court in ‘CIT Vs. Essar Teleholdings Ltd., (supra)
that amended rule 8D of the I.T. Rules is applicable
prospectively. In view of this, the matter is restored to the
file of the CIT(A) to decide the issue afresh in accordance
with law in the light of relevant rules as may be applicable
in the assessment year under consideration.
ITA No.182-C-2018 & 1512-C-17 3 M/s Vardhman Acrylics Limited Ludhiana
Now coming to the appeal of the Revenue in ITA No.
182/Chd/2018. The appeal is time barred for 100 days. A
separate application for condonation of delay has been
filed, wherein, it has been pleaded that order giving effect
to the CIT(A) could not be passed due to non-availability of
certain records. That the delay in filing the present appeal
was not intentional.
Considering the reasons given in the application, the
delay in filing the present appeal is hereby condoned.
At the outset, the Ld. DR has fairly agreed that the tax
effect involved in the present case is less than Rs. 20 lacs
and that the CBDT Circular No. 3/2018 is applicable to this
appeal, hence, this appeal of the Revenue is liable to be dismissed.
It may be noted that CBDT vide Circular No. 3/2018
dated 11.07.2018 has revised the monetary limit upto Rs.20
lacs for filing appeals by the Department before the Tribunal
and further vide para 13 of the said Circular it has been
clarified that said circular is applicable retrospectively to the
pending appeals also. The Hon’ble Punjab & Haryana High
Court in the case of “Principal CIT of Income Tax Vs. Surinder
Kumar Singhal” ITA No 406-2016 (O&M) vide order dated
30.1.2017 while further relying upon the decision of the
Hon'ble Supreme Court in the case of “CIT Vs. Dhanalekshmi
Bank Ltd.” (2015) 373 ITR 526 (SC), has dismissed the appeal
of the Revenue without going into the merits due to low tax
ITA No.182-C-2018 & 1512-C-17 4 M/s Vardhman Acrylics Limited Ludhiana
effect leaving the question of law open. In view of the CBDT Circular No. 03/2018 (supra) and in the light of the above referred to decision of the Hon'ble Jurisdictional Punjab & Haryana High Court (supra), the present appeal of the Revenue is dismissed due to low tax effect.
It is, however, clarified that the dismissal of the above appeal shall not be taken to be affirmation of the order of the CIT(A) on merits. The legal issue raised by the Revenue is being left open to be adjudicated in an appropriate case.
In the result, appeal of the assessee is treated as allowed, whereas, the appeal of the Revenue is dismissed.
Order dictated and pronounced in the Open Court immediately on completion of hearing.
Sd/- Sd/- (अ�नपूणा� गु�ता / ANNAPURNA GUPTA) (संजय गग� / SANJAY GARG) �या�यक सद�य/ Judicial Member लेखा सद�य/ Accountant Member Dated : 21 .02.2019 “आर.के.”
आदेश क� ��त�ल�प अ�े�षत/ Copy of the order forwarded to : 1. अपीलाथ�/ The Appellant 2. ��यथ�/ The Respondent 3. आयकर आयु�त/ CIT 4. आयकर आयु�त (अपील)/ The CIT(A) 5. �वभागीय ��त�न�ध, आयकर अपील�य आ�धकरण, च�डीगढ़/ DR, ITAT, CHANDIGARH 6. गाड� फाईल/ Guard File
आदेशानुसार/ By order, सहायक पंजीकार/ Assistant Registrar