Pr. Commissioner Of Income Tax-1, Ludhiana v. Shyamal Pal

ITA No. 10-2018 (O&M) 111IN THE HIGH COURT OF PUNJAB AND HARYANAAT CHANDIGARH. ITA No. 10 of 2018 (O&M)Decided on : 04.07.2018 Pr. Commissioner of Income Tax-1, Ludhiana ... Appellant Versus Shyamal Pal ... Respondent we OSOK CORAM: HON'BLE MR. JUSTICE AJAY KUMAR MITTALHON'BLE MR. JUSTICE AVNEESH JHINGAN Present ;Mr. Rajesh Katoch, Sr. Standing Counsel,for the appellant. TT AE AVNEESH JHINGAN, J. Revenue (hereinafter referred to as 'the appellant’) has filed theappeal against the order dated 04.07.2017, passed by the Income TaxAppellate Tribunal, Chandigarh (in short 'the Tribunal’). The matter pertainsto assessment year 2009-10. — 2 According to the appellant, following substantial questions of law arises in this appeal :- Ti“Whether upon facts and circumstances of the case, theHon'ble ITAT was justified in dismissing the appeal of therevenue without going into the merits of the case by holdingthat the tax effect involved in this case is below the prescribedmonetary limit of Rs. 10 lacs for filing of appeal before theHon'ble ITAT, while the case falls within the exception (c) ofpara 8 of CBDT's circular No. 21/2015 dated 10.12.2015?” 2.“Whether upon facts and circumstances of the case, theLd. CIT(A) is right in directing to apply peak theory on CashDeposits in Bank Account, particularly when the cash wasdeposited at Ludhiana and withdrawn at for off location in ITA No. 10-2018 (O&M) Hoogly, West Bengal?” 3)Bare facts necessary for adjudication of present appeal asnoticed in the appeal are that the case of the assessee was selected forscrutiny on the basis of Annual Information Return regarding cash depositsamounting to =a17,48,000/- made in the accounts of the assessee. Theassessment under section 143(3) of Income Tax Act, 1961 (for short ‘theAct’) was finalized vide order dated 15.11.2011 by making an addition of440,000/-. 4The order of assessment was taken in revision. The Revisional|Authority set aside the assessment framed vide order dated 18.03.2014 anddirected Assessing Officer to reframe assessment in accordance withdiscussions made in the revisional order. 5]In pursuance to the revisional order, assessment was framedvide order dated 08.07.2014 and the entire amount of ||17,48,000/-deposited in the bank account of the assessee was held to be income fromun-disclosed sources. 6]Aggrieved of the order, assessee filed an appeal before theCommissioner of Income Tax (Appeals) [CIT(A)]. The first appellateauthority vide order dated 17.11.2016, partly allowed the appeal. It washeld that the peak theory should be applied for additions to be made in thehands of the assessee, 7The appellant being aggrieved of the order of the C.I.T.(A)preferred an appeal before the Tribunal. The Tribunal relying upon thestatement of the departmental representative dismissed the appeal videorder dated 04.07.2017 as the tax effect was less than the monetary limitfixed in the C.B.D.T.'s circular No. 21/2015, dated 10.12.2015. The questions of law were kept open. 8 Although the appellant claimed that two substantial questionsof law arises, but in fact the issue involved would only be with regard toquestion No.l. The Tribunal has not gone into the merits of the case. Insuch circumstances, question No.2 does not arise.QOUndisputedly, the tax effect involved in the appeal is only=5,40,117/-. As per the circular dated 10.12.2015, the monetary limit forfiling the appeal before the Tribunal has been prescribed as410,00,000/-.For ready reference, the relevant portion of the circular is quoted below :- 3.Henceforth, appeals/SLPs shall not be filed in cases where thetax effect does not exceed the monetary limits given hereunder:- It is clarified that an appeal should not befiled merely becausethe tax effect in a case exceeds the monetary limits prescribed above.Filing ofappeal in such cases 1s to be decided on merits of the case. 3.Henceforth, appeals/SLPs shall not be filed in cases where thetax effect does not exceed the monetary limits given hereunder:- It is clarified that an appeal should not befiled merely becausethe tax effect in a case exceeds the monetary limits prescribed above.Filing ofappeal in such cases 1s to be decided on merits of the case. 10.It would be pertinent to note here that the departmentalrepresentative admitted before the Tribunal that the appeal of the appellantmay be dismissed as the tax effect was less thanan10,00,000/-. Learnedcounsel for the appellant contended that the Tribunal erred in dismissing theappeal relying upon the circular as this case falls within the exceptionmentioned in para 8 of the circular. Suffice to say that no such case wasmade out before the Tribunal, rather the departmental representativehimself relied upon the circular with the prayer that the appeal may bedismissed because of the low tax effect. Even while arguing the presentPANKAJ BAWEJA2018.09.10 16:07I attest to the accuracy andintegrity of this documentHigh court, Chandigarh ITA No. 10-2018 (O&M) appeal, learned counsel for the revenue was unable to substantiate that thepresent case fell under any of the categories under clause 8 of the ibidcircular which is in the following terms:- |Adversejudgments relating to thefollowing issuesshould be contested on merits notwithstanding that thetax effect entailed is less than the monetary limitsspecified in para 3 above or there 1s no tax effect: (a)Where the Constitutional validity ofthe provisionsofan Act or Rule are under challenge, or (b)Where Board's order, Notification, Instruction orCircular has been held to be illegal or ultra vires, or (c)Where Revenue Audit objection in the case hasbeen accepted by the Department, or (d)Where the addition relates to undisclosed foreignassets/bank accounts. CCCCCC 11.We do not find any error in the order passed by the Tribunal, No substantial question of law arises. 12]The appeal is dismissed. | AJAY KUMAR MITTAL]JUDGE 04.07.2018pankaj baweja Whether speaking/reasoned ? Whether reportable ? | AVNEESH JHINGAN |JUDGE Yes /No Yes /No