INCOME-TAX OFFICER vs. DR. ABDULRAFIQUE ABDULREHMAN SHAIKH, NASHIK

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ITA 1192/PUN/2016Status: DisposedITAT Pune26 September 2018AY 2009-104 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal dismissed the Revenue's appeal. It held that the appeal was not maintainable due to low tax effect, as it was below the monetary limit prescribed by CBDT Circular No. 3/2018.

What were the facts?

The Revenue appealed against the CIT(A)'s order quashing the reassessment proceedings initiated under Section 147. The assessee, a doctor, had claimed exemption under Section 54B for long-term capital gains, which was disallowed by the AO, leading to an addition. The CIT(A) found the reassessment notice and proceedings to be bad in law.

What were the issues?

Whether the Revenue's appeal is maintainable before the Tribunal given the low tax effect, and whether the reassessment proceedings were validly initiated.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 147,Section 148,Section 54B

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “B” BENCH, PUNE

Before: SHRI D.KARUNAKARA RAO, AM & SHRI VIKAS AWASTHY, JM

For Appellant: Shri Sudhendu Das
For Respondent: Shri Himanshu Gandhi
Hearing: 26.09.2018Pronounced: 26.09.2018

आदेश / ORDER

PER D. KARUNAKARA RAO, AM

This appeal is filed by the Revenue against the order of CIT(A)-2, Nashik, dated 22-03-2016 for the A.Y. 2009-10.

2.

Grounds raised by the Revenue are extracted below :

“1. Whether on the facts and the circumstances of the case, the Id. CIT(A)-2, Nashik is justified in quashing the order dated 14.07.2014 passed by the A.O. u/s 143(3) r.w.s. 147 of the Act on the sole ground that the A.O has not brought on record any new material for recording reason for reopening the assessment? (T.E. Rs. 27,27,150/- on account of Capital Gain)

2 ITA No.1192/PUN/2016 Dr.Abdulrafique A. Shaikh

2.

Whether on the facts and the circumstances of the case, the Id. CIT(A)-2, Nashik is justified in quashing the assessment proceedings reopened under Section 147 of the Income Tax Act, 1961 without appreciating that the power to reopen assessment is much wider under the amended provisions of section 147 of the Income Tax Act, 1961, w.e.f. 01.04.1989? 3. Whether on the facts and the circumstances of the case, the Id. CIT(A)-2, Nashik is justified in quashing the order dated 14.07.2014 passed by the A.O. u/s 143(3) r.w.s. 147 without appreciating the fact that the proceedings u/s 147 was initiated to bring to the tax, the escaped income, after recording the satisfaction by the Assessing Officer. 4. Whether on the facts and the circumstances of the case, the Ld. CIT(A)-2, Nashik is justified in quashing the order dated 14.07.2014 without appreciating the fact that the condition for action u/s 147 is that A.O should have reason to believe that income has escaped assessment which belief can be reached in any manner and is not qualified by a precondition of faith and true disclosure of material fact by the assessee as contemplated in the order?.

5.

Any other ground that may be urged at the time of hearing.”

3.

Briefly stated relevant facts includes that the assessee is an

individual and is engaged in the profession as Doctor. Assessee filed the

return of income declaring total income of Rs.9,93,572/-. AO assessed

the income of the assessee at Rs.10,04,180/-. The assessee earned

income from long term capital gain and claimed exemption u/s.54B of

the Act. Eventually, the AO vide order u/s.147 r.w.s.143(3) of the Act

made addition of Rs.71,15,531/- on account of disallowance of

deduction u/s.54B. In the First Appellate proceedings, however, the

CIT(A), relying on various judgmental laws granted relief to the assessee

and held that the notice issued u/s.148 of the Act and the consequential

reassessment is bad in law and void-ab-initio.

4.

Aggrieved with the order of CIT(A), the Revenue is in appeal before

us with the aforementioned grounds.

3 ITA No.1192/PUN/2016 Dr.Abdulrafique A. Shaikh

5.

At the outset, Ld. AR for the assessee submitted that the appeal

filed by the Department is liable to be dismissed on account of low tax

effect. The Ld. AR pointed that as per CBDT Circular No.3/2018 dated

11th July, 2018, the monetary limit for filing of appeal by the Department

before the Tribunal is Rs.20 Lakhs, therefore, the appeal filed by the

Department is not maintainable.

6.

On the other hand, the Ld. DR for the Revenue defended the

assessment order and prayed for reversing the findings of the CIT(A).

However, the Ld. DR fairly admitted that the tax effect in the present

appeal is less than Rs.20 Lakhs.

7.

Both sides are heard. On going through the facts of the case and

the orders of the Revenue, the total tax effect involved in the present

appeal works out to Rs.16,12,379/-. The CBDT circular No.3/2018

dated 11th July, 2018 raised the monetary limit of tax effect for filing of

appeal by the Department before the Tribunal to Rs.20 Lakhs. The

circular applies to the pending appeals of the Department before the

Tribunal too. Thus, in view of the CBDT circular, we are of the opinion

that the present appeal of the Revenue is liable to be dismissed on

account of low tax effect without going into the merits of the case.

8.

In the result, the appeal of the Revenue is dismissed.

Order pronounced on 26th day of September, 2018.

Sd/- Sd/-

(िवकास अव�थी /VIKAS AWASTHY) (डी. क�णाकरा राव/D. KARUNAKARA RAO) �ाियक सद�/JUDICIAL MEMBER लेखा सद�/ACCOUNTANT MEMBER पुणे / Pune; िदनांक / Dated : 26th September, 2018. Satish

4 ITA No.1192/PUN/2016 Dr.Abdulrafique A. Shaikh

आदेश की %ितिलिप अ'ेिषत / Copy of the Order forwarded to : अपीलाथ� / The Appellant. 1. ��थ� / The Respondent. 2. 3. The CIT (Appeals)-2, Nashik 4. The Pr. CIT-2, Nashik िवभागीय �ितिनिध, आयकर अपीलीय अिधकरण, “बी बी” ब"च, 5. बी बी पुणे / DR, ITAT, “B” Bench, Pune. गाड% फ़ाइल / Guard File. 6. आदेशानुसार / BY ORDER,

// True Copy // Senior Private Secretary आयकर अपीलीय अिधकरण, पुणे / ITAT, Pune

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