ITO, WD-22(4), KOLKATA, KOLKATA vs. SRI BIJOY KUMAR SAHOO, KOLKATA

“3. Henceforth, Appeals/ SLPs shall not be filed in cases where the tax effect does not exceed the monetary limits given hereunder: - Sl. No. Appeals in Income-tax matters Monetary Limit (in Rs) 1. Before Appellate Tribunal 10,00,000/- 2. Before High Court 20,00,000/- 3. Before Supreme Court 25,00,000/- It is clarified that an appeal should not be filed merely because the tax effect in a case exceeds the monetary limits prescribed above. Filing of appeal in such cases is to be decided on merits of the case.

7.In para-10 of the said circular it has further been clarified that the revised monetary limits will apply retrospectively. The relevant para-10 of the Circular reads thus:

“10. This instruction will apply retrospectively to pending appeals and appeals to be filed henceforth in High Courts/ Tribunals. Pending appeals below the specified tax limits in para 3 above may be withdrawn/ not pressed. Appeals before the Supreme Court will be governed by the instructions on this subject, operative at the time when such appeal was filed.”

8.In the present case, the tax effect in these appeals by the revenue is less than Rs.10,00,000/-. In view of para-10 of the Circular of CBDT, even past appeals filed by the Department in pursuance of old circular of the CBDT, such appeals will be governed by the new monetary limits laid down in the CBDT Circular No.21/2015,dated 10th December, 2015, referred to above.

Sri Bijoy Kumar Sahoo to 529/Kol/2016 A.Ys: 2007-08, 2008-09, 2010-11 & 2011-12 9.It is a settled law that the Circulars issued by CBDT are binding on the Revenue. This position was confirmed by the Apex Court in the case of Commissioner of Customs vs Indian Oil Corporation Ltd. reported in 267 ITR 272 wherein their Lordships examined the earlier decisions of the Apex Court with regard to binding nature of the Circular and laid down that when a circular issued by the Board remains in operation then the Revenue is bound by it and cannot be allowed to plead that it is not valid or that it is contrary to the terms of the statute. The both appeals under consideration has certainly been filed contrary to the Circular issued by the CBDT Circular No.21 dated 10.12.2015.

10.In the event the Revenue finds at a later point of time that the tax effect in these appeals is more than Rs.10 lakhs or despite low tax effect the appeals of the revenue are maintainable, the revenue is at liberty to move this Tribunal for recall of this order. We note that the cess component is not a part of the Income-tax, therefore, Appeals No.528 & 529/Kol/2016, pertaining to Assessment Years 2010-11 & 2011-12 fall in the ambit of tax effect vide CBDT Circular No.21/2015, dated 10th December, 2015.

Sri Bijoy Kumar Sahoo to 529/Kol/2016 A.Ys: 2007-08, 2008-09, 2010-11 & 2011-12 13. Now, we shall take Appeal Nos.526 & 527/Kol/2016 Assessment Years 2007-08 & 2008-09. Since, the issues involved in these two appeals are common and identical; therefore, these appeals have been heard altogether and are being disposed of by this consolidated order. For the sake of convenience, the grounds as well as the facts narrated in ITA No.526/Kol/2016, for assessment Year 2007-08, have been taken into consideration for deciding the above appeals en masse.

14.The grounds of appeal in the lead case in for assessment Year 2007-08, are as follows:

2. That on the facts and in the circumstances of the case the Ld. ClT(A)-6,Kolkata was not justified in his decision to dismiss the addition of the AO without verifying the genuineness of the business. 3. That the Ld. CIT(A)-6,Kolkata, erred in dismissing the addition of the Assessing Officer without taking into consideration of the fact that the claim of the assessee of running a business, being a Chartered Accountant in profession, is totally unethical according to the Law & Ethics of the Institute of Chartered Accounts. 4. That the Ld. CIT (A)-6,Kolkata, erred in dismissing the addition of the Assessing Officer without taking into consideration of that fact that the AO made this addition as unexplained cash credit and not as business income. 5. The appellant craves leave to add alter or amend any of the grounds of appeal during the course of hearing.”

15.At the outset itself, the ld. counsel for the assessee has submitted before us that the said issue is fully covered by the judgment of the Hon’ble ITAT, Kolkata in assessee’s own case in wherein it was held as under:

“8. We have heard the rival contentions of both the parties and perused the materials available on record. From the foregoing discussion we find that the assessee has claimed the deduction under section 80JJAof the Act for its bio-fertilizer business. But the AO has held Page | 5

Sri Bijoy Kumar Sahoo to 529/Kol/2016 A.Ys: 2007-08, 2008-09, 2010-11 & 2011-12 that there was no such business activity and entire sales proceeds for Rs. 37,05,680.00 was treated as income under section 68 of the Act. However the ld. CIT(A) on appeal allowed the relief to the assessee. From the perusal of the orders of lower authorities we find that various reports were called for by the AO to check whether the business of the assessee was into existence or not. We find that the contradictory reports were submitted from the inspector of the ward of the ITO having jurisdiction on the assessee and the inspector from Bhubaneswar Income Tax office. As per the report of inspector of the ITO there was not business but as per the inspector from Bhubaneswar Income Tax office, the business was there but it was negligible in volume. The AR in support of his claim has submitted various reports and certificates about the existence of the business which are placed on record. From the above fact we are inclined to hold that there was business in the existence. We also find support from the consistent claim of deduction under section 80JJA of the Act from the last several years. The question of the disallowance of deduction or non- existence of the business has never been raised in the earlier years. The allegation of the AO that the assessee being chartered accountant has not taken permission from the institute of chartered accountant has no connection in the income tax proceedings. Similarly the allegation of the AO that the assesseeis doing the business in the land belonging to his father without sharing the profit with his other brother and sisters has no base. The reasons for holding that there was no business were not correct. In view of above we are inclined not to interfere in the order of ld. CIT(A). Hence this ground of appeal of the revenue is dismissed.”

16.As the issue is squarely covered in favour of the assessee by the decision of the coordinate bench, in assessee`s own case and there is no change in facts and law and the Revenue is unable to produce any material to controvert the aforesaid findings and the ld CIT(A) has allowed the appeal of the assessee by following the decision of Tribunal in assessee`s own case (supra) for A.Y. 2009-10, we find no reason to interfere in the said order of the ld CIT(A) and the same is hereby upheld. Therefore, these appeals, in and 527/Kol/16, of Revenue are dismissed.

Order is pronounced in the open court on 25/04/2018.