G VENKATESWARAN ITO TDS WARD , MADURAI vs. MADURAI CENTRAL CO-OP BANK SHOLAVANDAN BRANCH, MADURAI

We have heard both the parties, perused materials available on record and gone through orders of the authorities below. When these appeals were taken up for hearing, the learned Sr. AR appeared for the Revenue strongly opposed out of turn listing of appeals for hearing in light of provisions of section 253(4) of the Income Tax Act, 1961, and argued that when the appellant/Department filed appeals, the Registry of the Tribunal is bound to give minimum thirty days time from date of receipt of memorandum of appeal to enable other party to file cross objection, if any. In this case, appeals have been filed by the Revenue on 30.05.2022 and considering minimum timeline of five working days for service, the Respondent in these cases would not have received appeal memorandum not before 06.06.2022. Therefore, considering the timeline, cases could not have been posted for hearing any day prior to 06.07.2022 and thus, argued that there is procedural lapse, which needs to be corrected. The learned Sr.AR for the Revenue further referring to CBDT Circular No.3/2018 and clause 10(a) submitted that where under challenge, then the Department is mandated to contest adverse orders passed by the CIT(A) before the Tribunal irrespective of the tax effect involved in the cases. In these cases, it was brought to our notice that the Respondent, M/s.

The learned counsel for the Respondents submitted that tax effect involved in all these appeals is less than monetary limit prescribed by the CBDT for filing appeal before the Tribunal in terms of Circular No.3/2018 and thus, these appeals filed by the Revenue are not maintainable and need to be dismissed.

We have heard both the sides and considered relevant materials on record. After hearing both sides, we deem it fit to answer first procedural issue raised by the learned Sr.AR appeared for the Revenue. We find that although, provisions of section 253(4) mandates 30 days time limit for filing cross party, but in this case, the Revenue cannot question listing of appeals before the limitation period of 30 days, because the Respondent/ assessees in all these appeals have made statement at bar through their learned Authorized Representative that they do not want to file any cross objection, because they have got relief from the first appellate authority. Further, it is wisdom of the Registry of the Tribunal to list appeals out of turn, if it feels that issues can be disposed of immediately and thus, we are of the considered view that there is no merit in arguments advanced by the learned DR for the Revenue and thus, same is rejected.

Having said so, let us come to second argument of the learned Sr.AR for the Revenue in light of CBDT circular No.3/2018 dated 11.07.2018 and more particularly, clause 10(a) of said circular, which provides for exception to monetary limit fixed by CBDT for filing appeal. As per circular No.3/2018 dated 11.07.2018 of CBDT, clause 10(a) specifically provides exception to monetary limits, in case constitutional validity of any of the provisions is under challenge before Courts and in such case, the Revenue needs to file appeal irrespective of to 484/Chny/2022 monetary limit involved in those appeals. In this case, although, the learned Sr.AR for the Revenue brings to our notice that Respondent/assessee has challenged constitutional validity of provisions of section 194N of the Income Tax Act, 1961, before the Hon’ble High Court of Madras at Madurai Bench, but the issue involved in all these appeals filed by the Revenue is not on constitutional validity of provisions of section 194N of the Act, but short deduction of TDS computed by the Assessing Officer u/s.194N of the Act. We further noted that the learned first appellate authority has decided the issue on merits, without going into examine constitutional validity of provisions of section 194N of the Income Tax Act,1961 and further, by following decision of the Hon’ble Jurisdictional High Court of Madras in the case of Tirunelveli District Central Co- operative Bank Ltd. Vs JCIT and held that the Assessing Officer has erred in computing short deduction of TDS and consequent interest u/s.201(1) & 201(1A) of the Income Tax Act, 1961, in respect of cash withdrawal from savings bank account of their branches and case of the assessee is covered under proviso to section 194N of the Act, and thus, on those cash withdrawals short deduction of TDS and consequent to 484/Chny/2022 interest cannot be computed. Further, the Revenue has challenged findings of the first appellate authority before us on the issue of short deduction of TDS and consequent interest, but not constitutional validity of provisions of section 194N of the Income Tax Act,1961. Therefore, we are of the considered view that there will be a merit in the arguments of the learned Sr.AR for the Revenue, in case, the first appellate authority has allowed relief to the Respondent/assessee on the issue of constitutional validity of provisions of section 194N of the Income Tax Act,1961. However, in this case, the issue has been decided on merits and thus, we are of the considered view that there is no merit in arguments advanced by the learned Sr.AR for the Revenue in light of clause 10(a) of CBDT Circular No.3/2018 dated 11.07.2018 and hence, same is rejected.

Having said so, let us examine whether monetary limit involved in these appeals is below prescribed limit fixed by the CBDT for filing appeals before the Tribunal. We find that in all these appeals tax effect involved is below monetary limit of Rs.50 lakhs prescribed by the CBDT for filing appeal by the Revenue before the Tribunal, which is evident from fact that to 484/Chny/2022 the learned Sr.AR for the Revenue has filed a chart, as per which in all these cases tax effect is below prescribed limit.