Ita/13/2021 Of Principal Commissioner Of Income Tax v. Satya Narayan Gupta

REPORTABLE/NON-REPORTABLE IN THE HIGH COURT OF HIMACHAL PRADESH AT SHIMLA ON THE 20[th] DAY OF SEPTEMBER, 2021 BEFORE HON’BLE MR. JUSTICE TARLOK SINGH CHAUHAN & HON’BLE MR. JUSTICE SATYEN VAIDYA. ITA NO. 13 of 2021 Between:- PR. COMMISSIONER OF INCOME TAX-1, CHANDIGARH. …APPELLANT (BY SH. VINAY KUTHIALA, SENIOR ADVOCATE WITH MS. VANDANA KUTHIALA, ADVOCATE.) AND SH. SATYA NARAYAN GUPTA, R/O CHAND BUILDING, HOSPITAL ROAD, DISTT. AND TEHSIL, SOLAN, H.P. ….RESPONDENT. (SH. VISHAL MOHAN, ADVOCATE) __________________________________________________________________ This appeal coming on for admission before notice this day, Hon’ble Mr. Justice Satyen Vaidya, delivered the following: J U D G M E N T 2. By way of instant appeal, the appellant seeks to assail order dated 11.6.2020, passed by the Income Tax Appellate Tribunal (for short ‘ITAT’), Chandigarh in ITA No. 1455/Chd./2019. 3. Respondent herein, (for short ‘assessee’), declared Rs.27,76,650/- as income in the ITR filed for the A.Y. 2009-2010. Assessment u/s 143(3) of the Income Tax Act (for short ‘Act’) was completed on 29.9.2011 and income of the assessee was assessed at Rs.27,96,650/-. 4. Subsequently, objection was raised by the audit party and the case was re-opened u/s 147 of the Act on 14.3.2016 with the prior approval of Pr. CIT, Shimla, on the ground that income chargeable to tax amounting to Rs.17,36,000/- and any other income which subsequently comes to notice had escaped assessment for the A.Y. 2009-2010. 5. Notice under Section 148 of the Act was issued to assessee whereby he was required to explain as to why the long term capital gain of Rs.17,36,000/- be not added to his income already assessed u/s 143 (3) of the Act. 6. Fresh assessment under Section 143(3)/147 of the Act was completed on 15.12.2016 and the income was assessed at Rs.45,32,650/- by making addition of Rs.17,36,000/- on account of long term capital gain. 7. The assessee assailed the above said assessment order by filing an appeal before the CIT(A). Vide order dated 16.8.2019, CIT(A) partly allowed the appeal of the assessee on the issue of long term capital gain and directed the Assessing Officer to restrict the sale consideration to be adopted at Rs.47,82,000/- in place of Rs.63,76,000/-. Thus, the relief of Rs.15,94,000/- was given to the assessee. 8. The revenue challenged the order dated 16.8.2019 of the CIT(A) before the ITAT, Chandigarh. The appeal of the revenue was dismissed vide impugned order assailed in the instant appeal. 9. The grievance of the appellant herein, is that the ITAT, Chandigarh had wrongly proceeded to dismiss the appeal of the revenue solely on the basis of Circular No. 17/2019 issued by the CBDT whereby the monetary limit for filing the appeal by the Department before the ITAT was enhanced to Rs.50,00,000/-. As per appellant, the benefit of the above noted circular could not be made available to the assessee in the instant case, though, the liability of tax was much less than the prescribed limit of Rs.50,00,000/- for the reason that para 10 (c) of Circular No. 3/2018 of CBDT dated 11.7.2018 exempted those cases where revenue audit objection had been accepted by the Department. The appellant contends that in the present case also the audit had raised objection and, as such, the CBDT Circular No. 17/2019 did not apply to the facts of the case and the ITAT had erred in not deciding the matter on merits. 10. We have heard learned counsel for the parties and have also gone through the records of the case. 11. The controversy can be summed up in narrow encompass. The issue for adjudication is whether the appellant can press into service the exemption Clause 10 (c) of Circular No. 3/2018 dated 11.7.2018 issued by the CBDT. 12. Perusal of impugned order passed by the ITAT reveals that it has taken into consideration the Circular No.17/2019 dated 8.8.2019 issued by the CBDT, which reads as under: “Circular No. 17 of 2019 Date – 8[th] August, 2019 appellant contends that in the present case also the audit had raised objection and, as such, the CBDT Circular No. 17/2019 did not apply to the facts of the case and the ITAT had erred in not deciding the matter on merits. 10. We have heard learned counsel for the parties and have also gone through the records of the case. 11. The controversy can be summed up in narrow encompass. The issue for adjudication is whether the appellant can press into service the exemption Clause 10 (c) of Circular No. 3/2018 dated 11.7.2018 issued by the CBDT. 12. Perusal of impugned order passed by the ITAT reveals that it has taken into consideration the Circular No.17/2019 dated 8.8.2019 issued by the CBDT, which reads as under: “Circular No. 17 of 2019 Date – 8[th] August, 2019 Further Enhancement of Monetary limits for filing of appeals by the Department before Income Tax Appellate Tribunal, High Courts and –SLPs/appeals before Supreme Court Amendment to Circular 3 of 2018 – Measures for reducing litigation. Circular No. 3/2018 dated 11[th] July 2018 has been replaced by circular No. 17/2019 dated 8[th] August 2019 to enhance Monetary limits for filing of appeals by the Department before Income Tax Appellate Tribunal, High Courts and SLPs/appeals before Supreme Court for reducing litigation. Before Supreme 1,00,00,000 2,00,00,000 Court 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. No appeal shall be filed in respect of an assessment year or years in which the tax effect is less than the monetary limit. Further, even in the case of 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, no appeal shall be filed in respect of an assessment year or years in which the tax effect is less than the monetary limit. In case where a composite order/judgment involves more than one assessee, each assessee shall be dealt with separately.” 13. It is not in dispute that the above noted Circular No. 17/2019 is extension of Circular No. 3/2018 issued by the CBDT whereby certain modifications have been made in the original circular especially in respect of enhancement of revision of monetary limits for appeals/SLPs in income tax matters. 14. It is evident from the impugned order that the Department was duly represented by its Additional CIT at the time of hearing of appeal before the ITAT, Chandigarh. No ground had been raised on behalf of the Department before the ITAT, Chandigarh requiring the said Tribunal to decide the matter on merits in view of Clause 10 (c) of the Circular No. 3/2018. To the contrary, the concession made by the departmental representative It is evident from the impugned order that the before the ITAT to the effect that the tax effect in the appeal was less than the prescribed limits, stood recorded. 15. Once the Department had not raised the plea of applicability of Clause 10 (c) of CBDT Circular No. 3/2018, it cannot be allowed to raise such plea in the present appeal. 16. The ITAT has correctly held the appeal before it to be not maintainable in view of clear mandate of Circular No. 17/2019. Same principle applies to the filing of present appeal. Hence, no substantial question of law arises for determination by this Court. maintainable in view of clear mandate of Circular No. 17/2019. Same principle applies to the filing of present appeal. Hence, no substantial question of law arises for determination by this Court. 17. No other infirmity has been pointed out in the impugned order. 15. Once the Department had not raised the plea of applicability of Clause 10 (c) of CBDT Circular No. 3/2018, it cannot be allowed to raise such plea in the present appeal. 16. The ITAT has correctly held the appeal before it to be not maintainable in view of clear mandate of Circular No. 17/2019. Same principle applies to the filing of present appeal. Hence, no substantial question of law arises for determination by this Court. maintainable in view of clear mandate of Circular No. 17/2019. Same principle applies to the filing of present appeal. Hence, no substantial question of law arises for determination by this Court. 17. No other infirmity has been pointed out in the impugned order. 18. In the light of above discussion, we find no merit in the appeal and the same is dismissed, so also the pending application(s), if any. appeal and the same is dismissed, so also the pending application(s), if any. (Tarlok Singh Chauhan) Judge 20[th] September, 2021 (GR) (Satyen Vaidya) Judge