DCIT, NEW DELHI vs. M/S. CERG ADVISORY PVT. LTD., NEW DELHI

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES : B-1 : NEW DELHI

BEFORE SHRI R.S. SYAL, AM & SHRI KULDIP SINGH, JM

ITA/IT(SS)A, Appellant Respondent AY/ Asst. Assessee By CO No. Period 3117/Del/2014 DCIT, C.Cir.2 Madhukar Tulsi, 2008-09 None New Delhi. 313B, Terrace Heights, The Laburnum, Sector-28, Sushant Lok-1, Gurgaon. PAN: AAUPT5804H CO Madhukar DCIT, CC-2, New Delhi. No.83/Del/2015 Tulsi 2992/Del/2014 DCIT, Central Ravi Keswani, L-II/72, 2009-10 None Circle-2, New Lajpat Nagar-II, Delhi. New Delhi. PAN: AALPK4762G 3316/Del/2014 DCIT, Sanjeev Khurana (HUF), 2008-09 None Central Circle- Prop., Khurana Textiles 21, Co., A-1/230, Hastsal New Delhi. Road, Uttam nagar, New Delhi. PAN: AAJHS1934A CO Sanjeev DCIT No.30/Del/2015 Khurana (HUF) 2645/Del/2014 DCIT, Indiabulls Finance 2010-11 None Cir.11(1), Company Pvt. Ltd., New Delhi. F-60, Malhotra Building, 2nd Floor, Connaught Place, New Delhi. PAN: AABCI3455R 2643/Del/2014 DCIT, Circle Indo Alusys Industries 2006-07 None 11(1), Ltd., New Delhi. 606, Tolstoy House, 15, Tolstoy Marg, New Delhi. PAN: AAACM5489L

ITA No.3117/Del/2014 & 32 appeals of other assessees

CO Nos.83, 30 & 27/Del/2015

2941/Del/2014 ITO, Ward GPM Developers Pvt. 2007-08 None 12(2), Ltd., New Delhi. F-20, Bankey Lal Market, Badar Pur, New Delhi. AACCG3872F 3313/Del/2014 DCIT, CC-21, Sanjeev Khurana (HUF), 2005-06 None New Delhi. Prop., Khurana Textiles Co., A-1/230, Hastsal Road, Uttam Nagar, New Delhi. PAN : AAJHS1934A

CO No. Sanjeev DCIT, CC-16, 27/Del/2015 Khurana New Delhi. (HUF), New Delhi 2725/Del/2014 DCIT, CC-18, DD Construction Pvt. 2009-10 None New Delhi. Ltd., A-43, Allahabad Apartments, Mayur Vihar, New Delhi. PAN : AAACD4349Q 2929/Del/2014 ITO, Ward Vikas Lohia, F-351, 2008-09 None 24(3), New Bandh Road, Near Delhi. Phase-VI, New Delhi. PAN: ACJPL3468N 3359/Del/2014 DCIT, Cerg Advisory Pvt. Ltd., 2010-11 None E-121, 2nd Floor, Cir.3(1), New Delhi. Masjid Moth, Greater Kailash, New Delhi. PAN: AACCC3327K 3325/Del/2014 ITO, Ward Arvind Khosla, 436, 2009-10 None 25(1), New Sainik Vihar, Delhi. Pitampura, Delhi. PAN: AAJPK5469Q 3350/Del/2014 DCIT, CC-3, MKR Construction Pvt. 2007-08 None New Delhi. Ltd., 2042, Katra Tobacco, Khari Baoli, Delhi. PAN: AADCM6195J

ITA No.3117/Del/2014 & 32 appeals of other assessees

CO Nos.83, 30 & 27/Del/2015

3396/Del/2014 DCIT, Lifelong India Ltd., 2010-11 None Cir.4(1), New D-1, Soami Nagar Delhi. (South), Delhi. PAN: AAACL9439K 3395/Del/2014 DDIT (E), Trinity Wisdom 2010-11 Shri Amit Arora, Trust Circle- Education Welfare CA IV, New Society, 31, Paschim Delhi. Marg, Vasant Vihar, New Delhi. PAN: AABAT0180A 3360/Del/2014 ITO, Ward AKS Properties Pvt. 2005-06 None 1(3), New Ltd., Delhi. 2773, Hansapuri, Tri Nagar, New Delhi. PAN: AAFCA4494J 3640/Del/2014 ACIT, CC-19, New India City 2005-06 & None New Delhi. Developers Ltd., B-44, 2006-07 IInd Floor, Jangpura, New Delhi. PAN: AAACK0016B 3544/Del/2014 ITO, Ward-2, Ashok Kumar Goyal, 2009-10 None Rohtak M/s Ashok Trading Co., Jhajjar Road, Rohtak. PAN: AAUPG7233M 1940/Del/2014 ITO (TDS), DFM DRM Office, 2009-10 None Moradabad. Northern Railways, Civil Lines, Moradabad. LKNSO7477B 3226/Del/2014 ACIT, CC-17, Prashant Tyagi, 2005-06 None 27, 2nd Floor, Ishwar New Delhi. Nagar, New Delhi. PAN: ACCPT7824R 3398/Del/2014 DCIT, J.S. Furnishing (P) Ltd., 2007-08 None Cir.4(1), New D-2/1, Okhla Industrial Delhi. Area, New Delhi. PAN: AAACJ1594K 3461/Del/2014 DCIT, Shivnath Rai Harnarain 1997-98 None Cir.25(1), New (India) Co., S-8, Delhi. Bhagwan Dass Nagar, New Delhi. PAN: AACFS6792H

ITA No.3117/Del/2014 & 32 appeals of other assessees

CO Nos.83, 30 & 27/Del/2015

2692/Del/2014 DCIT, Hindustan Vidyut 2010-11 None products Ltd., 7th Floor, Cir.12(1), New Delhi. Kanchenjunga, 18, Barakhamba Road, New Delhi. PAN: AAACT2345J 3391/Del/2014 ITO, Ward Sushma Gupta, 2010-11 None 26(3), New R/o C-2/52, First Floor, Delhi. Janak Puri, New Delhi. PAN: AFJPG7609F 3400/Del/2014 DCIT, Lloyd Manufacturing 2010-11 None Cir.4(1), New Pvt. Ltd., Delhi. B-10/1, Okhla Industrial Estate, Phase-II, New Delhi. PAN: AACFL8033F 1926/Del/2014 ITO (TDS), Regional Manager, 2011-12 None Moradabad. Uttar Pradesh State Road Transport Corporation, Lajpat Nagar, Moradabad. PAN: LKNRO5203C 3392/Del/2014 ITO, Ward Harjeet Singh,B-104, 2008-09 None 26(2), New IInd Floor, Fateh Nagar, Delhi. Jail Road, New Delhi. PAN: AMSPS3763N 1935/Del/2014 ITO (TDS), Gokul Das Hindu girls 2008-09 None Moradabad. College, Tavela Street, Moradabad. LKNGO5340G 1927/Del/2014 ITO, TDS, Executive Engineer, 2008-09 None Moradabad. UP Jal Nigam Construction Div., Tehsil & Post Bhinga, Shrawati, Uttar Pradesh. PAN: LKNC05354G 1928/Del/2014 ITO (TDS), Executive Engineer 2008-09 None Moradabad. Division, South Sarda Canal, Raebareilly. PAN: LKNEO5237B

ITA No.3117/Del/2014 & 32 appeals of other assessees CO Nos.83, 30 & 27/Del/2015 1938 & ITO(TDS), DFM DRM Office, 2008-09 & None 1939/Del/2014 Moradabad. Northern Railway, Civil 2009-10 Lines, Moradabad. LKNSO7477B 1937/Del/2014 ITO (TDS), Rural Engineering 2008-09 None Moradabad. Service, Vikas Bhawan, MDA Colony, Kanth Road, Moradabad. LKNRO5946D 1925/Del/2014 ITO (TDS), Marque Impex, Opp. Lal 2011-12 None Moradabad. Masjid, Moradabad. PAN: LKNMO5177E

Department By : Shri P. Dam Kanunjana, Sr. DR

Date of Hearing : 17.12.2015 Date of Pronouncement : 17.12.2015

ORDER PER R.S. SYAL, AM: These appeals by the Revenue and a few Cross objections

by some of the assessees arise out of the orders passed by the

CsIT(A) in relation to the captioned assessment years.

respective ld. AR, while others remained unrepresented.

During the course of hearing, the ld. D.R., although supported

the respective orders of the Assessing Officers, but could not

ITA No.3117/Del/2014 & 32 appeals of other assessees CO Nos.83, 30 & 27/Del/2015 controvert the fact that tax effect involved in each of these

appeals is less than Rs.10,00,000/-.

the appeals by the Revenue, one ld. AR, and the material on

record, it is noticed that Section 268A has been inserted by the

Finance Act, 2008 with retrospective effect from 01.04.1999,

reading as under:

“268A. (1) The Board may, from time to time, issue orders, instructions or directions to other income-tax authorities, fixing such monetary limits as it may deem fit, for the purpose of regulating filing of appeal or application for reference by any income- tax authority under the provisions of this Chapter.

(2) Where, in pursuance of the orders, instructions or directions issued under sub-section (1), an income-tax authority has not filed any appeal or application for reference on any issue in the case of an assessee for any assessment year, it shall not preclude such authority from filing an appeal or application for reference on the same issue in the case of— 6

ITA No.3117/Del/2014 & 32 appeals of other assessees CO Nos.83, 30 & 27/Del/2015 (a) the same assessee for any other assessment year; or (b) any other assessee for the same or any other assessment year. (3) Notwithstanding that no appeal or application for reference has been filed by an income-tax authority pursuant to the orders or instructions or directions issued under sub-section (1), it shall not be lawful for an assessee, being a party in any appeal or reference, to contend that the income-tax authority has acquiesced in the decision on the disputed issue by not filing an appeal or application for reference in any case. (4) The Appellate Tribunal or Court, hearing such appeal or reference, shall have regard to the orders, instructions or directions issued under sub-section (1) and the circumstances under which such appeal or application for reference was filed or not filed in respect of any case. (5) Every order, instruction or direction which has been issued by the Board fixing monetary limits for filing an appeal or application for reference shall be deemed to have been issued under sub-section (1) and the provisions of sub-sections (2), (3) and (4) shall apply accordingly.]”

ITA No.3117/Del/2014 & 32 appeals of other assessees CO Nos.83, 30 & 27/Del/2015 4. Pursuant to the mandate of section 268A, the CBDT has

issued Circular No. 21 of 2015 dated 10.12.2015, revising the

monetary limit to Rs.10,00,000/- for not filing appeals before

the Tribunal. The said circular read as under:

“Subject : Revision of monetary limits for filing of appeals by the Department before Income Tax Appellate Tribunal and High Courts and SLP before Supreme Court – measures for reducing litigation – Reg. Reference is invited to Board’s instruction No 5/2014 dated 10.07.2014 wherein monetary limits and other conditions for filing departmental appeals (in Income-tax matters) before Appellate Tribunal and High Courts and SLP before the Supreme Court were specified.

ITA No.3117/Del/2014 & 32 appeals of other assessees CO Nos.83, 30 & 27/Del/2015 3. Henceforth, appeals/ SLPs shall not be filed in cases where the tax effect does not exceed the monetary limits given hereunder: S. No Appeals in Income-tax Monetary Limit (in matter 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. 4. For this purpose, “tax effect” means the difference between the tax on the total income assessed and the tax that would have been chargeable had such total income been reduced by the amount of income in respect of the issues against which appeal is intended to be filed (hereinafter referred to as “disputed issues”). However the tax will not include any interest thereon, except where chargeability of interest itself is in dispute. In case the chargeability of interest is the issue under dispute, the amount of interest shall be the tax effect. In cases where returned loss is reduced or assessed as income, the tax effect would include

ITA No.3117/Del/2014 & 32 appeals of other assessees CO Nos.83, 30 & 27/Del/2015 notional tax on disputed additions. In case of penalty orders, the tax effect will mean quantum of penalty deleted or reduced in the order to be appealed against. 5. The Assessing Officer shall calculate the tax effect separately for every assessment year in respect of the disputed issues in the case of every assessee. If, in the case of an assessee, the disputed issues arise in more than one assessment year, appeal, can be filed in respect of such assessment year or years in which the tax effect in respect of the disputed issues exceeds the monetary limit specified in para 3. No appeal shall be filed in respect of an assessment year or years in which the tax effect is less than the monetary limit specified in para 3. In other words, henceforth, appeals can be filed only with reference to the tax effect in the relevant assessment year. However, in case of a composite order of any High Court or appellate authority, which involves more than one assessment year and common issues in more than one assessment year, appeal shall be filed in respect of all such assessment years even if the ‘tax effect’ is less than the prescribed monetary limits in any of the year(s), if it is decided to file appeal in respect of the year(s) in which ‘tax effect’ exceeds the monetary limit prescribed. In case where a composite order/ judgement involves more than one assessee, each assessee shall be dealt with separately. 6. In a case where appeal before a Tribunal or a Court is not filed only on account of the tax effect being 10

ITA No.3117/Del/2014 & 32 appeals of other assessees CO Nos.83, 30 & 27/Del/2015 less than the monetary limit specified above, the Commissioner of Income-tax shall specifically record that “even though the decision is not acceptable, appeal is not being filed only on the consideration that the tax effect is less than the monetary limit specified in this instruction”. Further, in such cases, there will be no presumption that the Income-tax Department has acquiesced in the decision on the disputed issues. The Income-tax Department shall not be precluded from filing an appeal against the disputed issues in the case of the same assessee for any other assessment year, or in the case of any other assessee for the same or any other assessment year, if the tax effect exceeds the specified monetary limits. 7. In the past, a number of instances have come to the notice of the Board, whereby an assessee has claimed relief from the Tribunal or the Court only on the ground that the Department has implicitly accepted the decision of the Tribunal or Court in the case of the assessee for any other assessment year or in the case of any other assessee for the same or any other assessment year, by not filing an appeal on the same disputed issues. The Departmental representatives/counsels must make every effort to bring to the notice of the Tribunal or the Court that the appeal in such cases was not filed or not admitted only for the reason of the tax effect being less than the specified monetary limit and, therefore, no inference should be drawn that the

ITA No.3117/Del/2014 & 32 appeals of other assessees CO Nos.83, 30 & 27/Del/2015 decisions rendered therein were acceptable to the Department. Accordingly, they should impress upon the Tribunal or the Court that such cases do not have any precedent value. As the evidence of not filing appeal due to this instruction may have to be produced in courts, the judicial folders in the office of CIT must be maintained in a systemic manner for easy retrieval. 8. Adverse judgments relating to the following issues should be contested on merits notwithstanding that the tax effect entailed is less than the monetary limits specified in para 3 above or there is no tax effect: (a) Where the Constitutional validity of the provisions of an Act or Rule are under challenge, or (b) Where Board’s order, Notification, Instruction or Circular has been held to be illegal or ultra vires, or (c) Where Revenue Audit objection in the case has been accepted by the Department, or (d) Where the addition relates to undisclosed foreign assets/ bank accounts.

ITA No.3117/Del/2014 & 32 appeals of other assessees CO Nos.83, 30 & 27/Del/2015 12A of the IT Act, 1961, shall not be governed by the limits specified in para 3 above and decision to file appeal in such cases may be taken on merits of a particular case. 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. 11. This issues under Section 268A (1) of the Income- tax Act 1961.”

these instructions are applicable to the pending appeals also

and there is a clear cut instruction to the Department to

withdraw or not press such appeals filed before the ITAT

wherein tax effect is less than Rs.10,00,000/-. These

instructions are operative retrospectively to the pending

appeals also.

ITA No.3117/Del/2014 & 32 appeals of other assessees CO Nos.83, 30 & 27/Del/2015 6. It goes without saying that the Board’s instructions or

directions issued to the income-tax authorities are binding on

them. Going by the prescription of the aforenoted Circular, we

are of the view that the Revenue should have either not filed

the instant appeals before the Tribunal or withdrawn the same

as the tax effect in each of such appeals is less than the

prescribed limit for not filing the appeals.

Section 268A of Income-tax Act, 1961, and without going into

merits of the cases, we dismiss the instant appeals filed by the

Revenue as tax effect in each of these appeals is less than

Rs.10.00 lac. The Cross objections filed by the assessee, which

are in support of the respective impugned orders, are also

dismissed as infructuous.

ITA No.3117/Del/2014 & 32 appeals of other assessees CO Nos.83, 30 & 27/Del/2015 8. In the result, all appeals of the Revenue and Cross objections of the assessees stand dismissed.

Order Pronounced in the Court on 17/12/2015.

Sd/- Sd/- [KULDIP SINGH] [R.S. SYAL] JUDICIAL MEMBER ACCOUNTANT MEMBER Dated, 17th December, 2015. dk Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT (A) 5. DR, ITAT

AR, ITAT, NEW DELHI.