Commissioner Of Income Tax, Trichy. Appellant v. P.l.gandhi N.s.b.road Trichy-2. Respondent

IN THE HIGH COURT OF JUDICATURE AT MADRAS Dated : 28.04.2009 Coram : THE HONOURABLE MR.JUSTICE K.RAVIRAJA PANDIANandTHE HONOURABLE MR.JUSTICE M.M.SUNDRESH Tax Case (Appeal) No.843 of 2004 Commissioner of Income Tax,Trichy.Appellantv.P.L.GandhiN.S.B.RoadTrichy-2.Respondent Tax Case (Appeal) preferred under section 260A of the IncomeTax Act, 1961, against the order of the Income Tax AppellateTribunal, Madras 'B' Bench, dated 16.9.2003 made in ITA No.620 of2003 for the assessment year 1996-97 against the Order of theCommissioner of Income-Tax (Appeals) Tiruchirapalli dated 23.1.2003made in ITA Nos.41,42,43 to 48/2002-2003 against the order of theIncome Tax Officer dated - made in GIR/PAN No.758-G (old)Assessment year 1996-97.For appellant:Mr.J.Naresh Kumar,Senior Standing Counsel for Income Tax Department For Respondent :Mr.V.D.Gopal JUDGMENT (Judgment of the Court was delivered by K.RAVIRAJA PANDIAN, J.) This appeal is at the instance of the revenue against theorder of the Income Tax Appellate Tribunal, Madras 'B' Bench, dated16.9.2003 made in ITA No.620 of 2003 for the assessment year 1996-97. 2. The facts of this case are as follows : The assessee S.M.Palaniappa Chettiar, M.Chellappan andP.L.Gandhi are partners of the firm, and they are the co-owners ofthe properties at Chennai (Kannammai Buildings, Chennai etc.,).Notice under Section 148 was issued, the returns were filed andprocess under Section 143(1) of the Income-tax Act, 1961. Laterthis was taken for scrutiny by issuing notice under Section 143(2) https://hcservices.ecourts.gov.in/hcservices/ and assessment was completed under Section 143(3) read with Section147. The assessee filed an appeal before the Commissioner ofIncome-tax (Appeals), Tiruchirapalli and assessment was upheld bythe Commissioner of Income-tax (Appeals) and the assessing officersaction was declared as valid. Aggrieved by the Commissioner ofIncome-tax (Appeals), the assessees had filed an appeal before theIncome-tax Appellate Tribunal, Chennai. The Income-tax AppellateTribunal has decided in favour of the assessee and held thatissues against the revenue. Aggrieved by this order, the appellantfiled the present appeal. 3. The appeal was admitted on the following substantialquestions of law : "Whether on the facts and in the circumstances of thecase, the Income Tax Appellate Tribunal was right inholding that the reopening of the assessment underSection 147, and competition of assessment withoutnotice under Section 143(2) within 12 months is notvalid? 4. Heard the learned counsel for the revenue and perused theorder of the Tribunal. 5. An issue similar to the issue in this case came up forconsideration before a Division Bench of this Court in the case ofCWT v. S.Annamalai, (2002) 258 ITR 675, wherein it was held that inorder to reduce the litigation for filing departmentalappeals/references before the Income Tax appellate Tribunal, HighCourts and the Supreme Court, the Central Board of Direct Taxes, byCircular F. No.279/126/98-IT, dated March 27,2000, refixed themonetary limits, however, casting out certain exceptions. Theexceptions stated are (i) where revenue audit objection in the casehas been accepted by the department, (ii) where the Board's order,notification, instruction or circular is the subject matter of anadverse order, (iii) where prosecution proceedings are contemplatedagainst the assessee, and (iv) where the constitutional validity ofthe provisions of the Act are under challenge. 6. The Revenue had not made out a case that the issueinvolved in the appeal before the Tribunal falls within theexceptions provided in the circular. 7. It may be noted that this Court considered a similar issuein the case of CIT v. Associated Electrical Agencies, (2007) 295ITR 496, wherein this Court held as follows : 6. The Revenue had not made out a case that the issueinvolved in the appeal before the Tribunal falls within theexceptions provided in the circular. 7. It may be noted that this Court considered a similar issuein the case of CIT v. Associated Electrical Agencies, (2007) 295ITR 496, wherein this Court held as follows : "We are of the considered view that none of theexceptions stated in the circular are applicable to thefacts of the present case. The circular was stated to beissued by invoking the statutory power under Section 119of the Income-tax Act. The appeal is filed under Section https://hcservices.ecourts.gov.in/hcservices/ 260-A of the Income-tax Act. It is well settled principleof law that each and every provision of a statute has tobe given the same importance. One provision cannot bealleviated to a higher pedestal than the other provision,of course, unless or otherwise specifically stated eitherin the scheme, the Act or in the provision itself that aparticular provision is subjected to or qualified by anyother provision or the provision can be given effect tonotwithstanding anything contained in any other provisionsby assigning overriding effect. Hence, the contention thatnotwithstanding the circular, which was issued underSection 119 of the Income-tax Act, the appeal could befiled by the revenue under Section 260-A has to berejected for the reason that if the contention isaccepted, one of the Section would become virtually otioseand that cannot be the intention of the law makers. Thus, following the long line of case laws reportedin 258 ITR 300 (COMMISSIONER OF INCOME-TAX Vs. RAJASTHANPATRIKA LIMITED), 261 ITR 406 (COMMISSIONER OF INCOME-TAXVs. P.S.T.S. THIRUVIRATHNAM AND SONS), to which one of usis a party (K.Raviraja Pandian,J.), 292 ITR 314(COMMISSIONER OF INCOME-TAX Vs. DIGVIJAY SINGH) and 254ITR 565 (COMMISSIONER OF INCOME-TAX Vs. CAMCO COLOUR CO.),this Court held that the uniform line of judicial opinionis that if the tax effect is less than what is stated inthe circular, the Revenue need not agitate the issue onappeal and that the circular is binding on the Revenue." The said judgment of this Court in the case of AssociatedElectricals Agencies, (2007) 295 ITR 496 has been relied by theGujarat High Court in the case of CIT v. Concord Pharmaceuticals,(2008) 220 CTR 117 to reject the appeal of the revenue where thetax effect is less than Rs.2.00 lakhs. The apex Court in the caseof State of Kerala v. Kurian Abraham (P) Ltd., (2008) 3 SCC 582 haslaid down that the circular issued by the CBDT is much binding onthe revenue and that requires no support of judicial precedent. 8. Admittedly, the tax effect in this case is less thanRs.2.00 lakhs, the limit prescribed under the above said Circulardated 27.03.2000. The appeal is filed on 01.07.2005. Hence, thecircular is binding on the revenue. The appeal is dismissed. Nocosts. To 1.The Assistant Registrar Income-tax Appellate Tribunal Rajaji Bhavan, Besant Nagar, 'B' Bench, Chennai. 2. The Commissioner of Income Tax (Appeals), Tiruchirapalli.(Appeals), Tiruchirapalli. 3. The Income Tax Officer,Ward I (3), Tiruchy 4. The Director, Central Board of Direct Taxes, New Delhi. New Delhi. + 1 CC To Mr.V.D.Gopal, Advocate SR NO.18548 + 1 CC To Mr.K.Subramaniam, Advocate SR NO.18555 T.C. (A) No.843 of 2004 SAI {CO}TP/11.5.2009.