Pr. Commissioner Of Income Tax-2, Ludhiana v. M/S Deepak International Ltd., Ludhiana

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARHSr. No. 103ITA No. 319 of 2016 (O&M)Date of decision : 10.05.2018 Pr. Commissioner of Income Tax-2, Ludhiana | VERSUS .... Appellant M/s Deepak International Ltd., Ludhiana ..... Respondent 9CORAM*HONBLE MR. JUSTICE RAJESH BINDALHON9BLE MR. JUSTICE DEEKPAK SIBA Present*Mr. Zora Singh Klar, Advocate, for the appellant. RAJESH BINDAL, J: Revenue is in appeal against the order dated 25.04.2016,passed by the Income Tax Appellate Tribunal, Division Bench, Chandigarh(for short, the "Tribunal') in ITA No. 400/CHD/2013, for the assessmentyear 2008-09, raising the following substantial questions of law: - “1.Whether on the facts and the circumstances, the Hon'bleITAT is right in law in quashing the order u/s 263 of theIncome Tax Act, 1961 passed by the CIT-2, Ludhiana? |Whether on the facts and circumstances, the Hon'bleITAT was right in ignoring the facts that AO should havelooked into all the eligible items from the point of viewof disallowance under the concerned section and sincethe same was not done, these items were not subjectmatter of appeal and the issue did not merge with theorder of the CIT(A)?” In the memo of grounds of appeal it is mentioned that tax effect involved in the case 1s nil. It is a case in which the assessment of the respondent-assesseewas framed under Section 143(3) of the Income Tax Act, 1961 (for short,the 'Act') on 29.12.2008. The order was revised by the Commissioner ofIncome Tax (for short 'CIT"), exercising powers under Section 263 of theAct on 21.03.2013. The aforesaid order passed by the CIT under Section263 of the Act was challenged by the assessee before the Tribunal. Theappeal was accepted. It is the aforesaid order, which is under challengebefore this Court. On March 15, 2017 this Court passed the tollowing order: - “A perusal of assessment order dated 20.12.2008(Annexure A-1) passed in pursuance to order under Section 263of the Income Tax Act, 1961 (in short, ‘the Act’) by theCommissioner of Income Tax-2, Ludhiana shows that theAssessing Officer has made additions of ©=17,15,561/- and=5,17,173/- as discernible from page No.49 of the paper book,Thus, the total addition made comes to=22,32,734/- and the taxthereon @ 30% would make the tax effect much below the limitot|=20 lacs as prescribed in Circular No.12/2015 issued on10.12.2015 by the Central Board of Direct Taxes for filing otappeals under Section 260A of the Act. Learned counsel for the appellant-Revenue prays for timeto examine the same. Adjourned to 28.03.2017.” The aforesaid order notices that after the matter was referred back by the CIT to the assessing officer, assessment of the respondent wasframed and the amount finally assessed was found to be47,58,906/-. As theamount was below the limit prescribed, the Central Board of Direct Taxes(for short the 'Board') issued circular No.21/2015, on 10.12.2015, for filingappeals in the High Court. Today, affidavit of Avdhesh Kumar Mishra, Pr. Commissionerof Income Tax-2, Ludhiana, dated 08.05.2018, has been filed endorsing thesame view. Para 7 of the affidavit specifically states that tax effect as aresult of order passed under Section 143(3) of the Act after the matter wasreferred back by the CIT while exercising powers under Section 263 of theAct, was|=7,58,906/-. In view of the aforesaid circular issued by the Board, thepresent appeal cannot be entertained. back by the CIT to the assessing officer, assessment of the respondent wasframed and the amount finally assessed was found to be47,58,906/-. As theamount was below the limit prescribed, the Central Board of Direct Taxes(for short the 'Board') issued circular No.21/2015, on 10.12.2015, for filingappeals in the High Court. Today, affidavit of Avdhesh Kumar Mishra, Pr. Commissionerof Income Tax-2, Ludhiana, dated 08.05.2018, has been filed endorsing thesame view. Para 7 of the affidavit specifically states that tax effect as aresult of order passed under Section 143(3) of the Act after the matter wasreferred back by the CIT while exercising powers under Section 263 of theAct, was|=7,58,906/-. In view of the aforesaid circular issued by the Board, thepresent appeal cannot be entertained. However, learned counsel for the revenue sought to raise anissue that the ultimate tax effect after the order is passed by the CIT underSection 263 of the Act should not to be taken into consideration forexamination of the validity of that order. Para 9 of the instructions providefor exceptions thereto. A perusal of para 9 of the instructions provide thatdecision to file appeal in the cases where tax effect is not quantifiable or notinvolved, such as the case of registration of trusts or institutions underSection IZA of the Act is to be decided on the merits of each case and thelimits prescribed and the instructions will not be applicable. However, we are not impressed with the argument as it is not acase where either the tax is not quantifiable or it is not involved as it is notacase pertaining to registration of trusts or institutions under Section 12A of the Act where order may have long terms consequences with regard to taxeson the assessee therein. There is no particular period involved. Even the contention that the order specifically passed underSection 143(3) of the Act after the matter was referred back by the CIT inexercise of powers under Section 263 of the Act is not to be seen, is alsototally misconceived as ultimate tax effect arising out of any order which issought to be impugned before the High Court is to be considered. Keeping in view the circular issued by the Board itself, asreferred to above, the present appeal is not maintainable. Dismissed. }RAJESH BINDAL |)JUDGE 10.05.2018| shamsher Whether speaking/reasonedWhether reportable | DEEPAK SIBAL |JUDGE * Yes / No: Yes / No