Income Tax Appellate Tribunal - Chennai
Dr.M.P.Naresh Kumar, , Chennai vs Department Of Income Tax on 28 August, 2012
IN THE INCOME TAX APPELLATE TRIBUNAL
'C' BENCH, CHENNAI
BEFORE SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBER
AND SHRI VIKAS AWASTHY, JUDICIAL MEMBER
W.T.A. No.29/Mds/2012
(Assessment Year : 2006-07)
The Assistant Commissioner of Dr. M.P. Naresh Kumar,
Income Tax, 93, Poes Garden, Gopalapuram,
Central Circle I(2), v. Chennai - 600 086.
Chennai - 600 034.
PAN : AACPN7535M
(Appellant) (Respondent)
C.O. No. 119/Mds/2012
(in W.T.A. No. 29/Mds/2012)
(Assessment Year : 2006-07)
Dr. M.P. Naresh Kumar, The Assistant Commissioner of
93, Poes Garden, Income Tax,
Gopalapuram, v. Central Circle I(2),
Chennai - 600 086. Chennai - 600 034.
(Cross-objector) (Respondent)
Revenue by : Shri S. Dasgupta, JCIT
Assessee by : None
Date of Hearing : 28.08.2012
Date of Pronouncement : 28.08.2012
O R D E R
PER ABRAHAM P. GEORGE, ACCOUNTANT MEMBER :
These are appeal and cross-objection filed by the Revenue and assessee respectively, against an order dated 12.3.2012 of Commissioner of Income Tax (Appeals)-I, Chennai, for the impugned 2 W.T.A. No.29/Mds/12 C.O. No. 119/Mds/12 assessment year. Cross-objection filed by the assessee is in support of the order of CIT(Appeals).
2. When the appeal came up for hearing, it was pointed out by the Bench that the penalty levied was only ` 13,874/- under Section 18(1)(c) of Wealth Tax Act, 1957 and learned D.R. was requested to explain how the appeal was maintainable in view of low tax effect. At this learned D.R. submitted that CBDT Instruction No.3/2011 dated 9.2.2011 applied only to income-tax matters. According to learned D.R., the appeal was filed on 30.5.2012 and therefore, Instruction No.3/2011 applied. As per the learned D.R., the said instruction was applicable only on income-tax matters and not on wealth-tax matters.
3. Nobody appeared on behalf of assessee.
4. We have perused the orders and also heard the contention of learned D.R. As per learned D.R., though the penalty amount involved was only a paltry sum of ` 13,874/-, the appeal was still maintainable for a reason that Instruction No.3/2011 dated 9.2.2011 prescribing monetary limits for filing appeals, applied only to income-tax matters. On going through Instruction No.3/2011, it is seen that at para 10 it is mentioned that monetary limits specified therein did not apply to direct tax matters other than income-tax. It is also mentioned that filing of appeals in other 3 W.T.A. No.29/Mds/12 C.O. No. 119/Mds/12 direct tax matters shall be governed by relevant provisions of statute and rules. Relevant para of Instruction No.3/2011 of 9.2.2011 is reproduced hereunder for brevity:-
"10. The monetary limits specified in para 3 above shall not apply to writ matters and direct tax matters other than Income-tax, filing of appeals in other direct tax matters shall continue to be governed by relevant provisions of statute and rules. Further, filing of appeal in cases of Income-tax, when the tax effect is not quantifiable or not involved, such as the case of registration of trusts or institutions under section 12A of the I.T. Act, 1961, shall not be governed by the limits specified in para 3 above and decision to file appeal in such case may be taken on merits of a particular case."
5. Now the question before us - will the above para in the circular enable the Revenue to file an appeal in a wealth-tax matter, even when the tax effect is less than ` 3 lakhs mentioned in the said circular? The circular specifically mentions that it is in supersession of earlier Instruction No.5/2008 dated 15.5.2008. A look at CBDT Instruction No.5/2008 dated 15.5.2008 clearly shows that these instructions were issued in supersession of certain earlier instructions on the matter. The instructions which stood superseded by CBDT Instruction No.5/2008 is mentioned at the preamble of the said Instruction itself which reads as under:-
"Reference is invited to Board's instructions No.1979 dated 27.3.2000, No.1985 dated 29.6.2000, No.6 of 2003 dated 17.7.2003, No.19 of 2003 dated 23.12.2003, No.5/2004 dated 27.5.2004, No.2/2005 dated 24.10.2005 and No.5/2007 dated 16.7.2007, wherein monetary limits for filing departmental appeals (in Income-4 W.T.A. No.29/Mds/12 C.O. No. 119/Mds/12
tax matters) and other conditions were specified, for filing appeals before Appellate Tribunals, High Courts and Supreme Court."
6. Of the many instructions that were superseded, what are relevant here are Instruction No.5/2007 dated 16.7.2007 and Instruction No.1979 dated 27.3.2000. Para 5 of Instruction No.1979 dated 27.3.2000 clearly mentions that the said instruction applied to other direct tax matters also including wealth-tax, gift-tax and Estate Duty. Para 4 of Instruction No.5 of 2007 dated 16.7.2007 clearly mentions that except for changes in monetary limits mentioned therein, earlier Instruction No.1979 dated 27.3.2000 continued to apply. In our opinion, CBDT Instruction No.5/2008 which states that it supersedes circulars relating to monetary limits for filing departmental appeals in income-tax matters, will not effect the monetary limits for filing departmental appeals in relation to other direct tax matters mentioned at para 5 of Instruction No.1979 of 27.3.2000. From para 10 of Instruction No.3/2011 dated 9.2.2011, which we have reproduced at para 4 above, it is clear that with regard to appeals on other direct tax matters, viz. matters other than income-tax, they shall be governed by relevant provisions of statute and rules. CBDT instructions earlier issued, though superseded with regard to income-tax matters, were all issued under powers vested on it under Section 119 of Income-tax Act, 1961. Thus, when it is clearly mentioned in Instruction No.3/2011 that for matters relating to direct tax other than 5 W.T.A. No.29/Mds/12 C.O. No. 119/Mds/12 income-tax, relevant provisions of statute and rules will continue to apply, it would by implication means that earlier instructions insofar as it related to matters other than income-tax would continue to apply. By virtue of Instruction No.5/2007 dated 16.7.2007, the monetary limit for filing of appeals before this Tribunal was increased ` 1 lakh. By virtue of Instruction No.1979 dated 27.3.2000, the monetary limits mentioned applied also to wealth-tax, gift-tax and Estate Duty matters. In our opinion, when these instructions are read together, despite the supersession effected by Instruction No.3/2011 dated 9.2.2011 of earlier Instruction No.5/2008 dated 15.5.2008 and supersession of instructions mentioned at para 5 above by us, through Instruction No.5/2008 dated 15.5.2008, the earlier instructions insofar as it applied to wealth-tax, gift- tax and Estate Duty matter would continue in force. For taking the view that the Instruction No.5/2008 as also Instruction No.3/2011 will apply to wealth-tax matter also, we are fortified by the decision of Hon'ble Kerala High Court in the case of CWT v. John L. Chackola in WTA No.108 of 2009 dated 7th December, 2009. Though in the said case, it was decided that the appeal was indeed maintainable, it was so ruled for a reason that the appeal was filed prior to the date of Instruction No.5/2008 coming into effect and prior to that date limits mentioned in Instruction No.2/2005 only applied. Nevertheless, it is clear from this 6 W.T.A. No.29/Mds/12 C.O. No. 119/Mds/12 decision of Hon'ble Kerala High Court that the said Instructions did apply to wealth-tax matters also.
7. As for the issue whether monetary limits will also apply to penalty appeals, it is clearly mentioned in para 4 of Instruction No.3/2011 dated 9.2.2011 itself that in case of penalty orders, tax effect would mean quantum of penalty deleted or reduced.
8. In this view of the matter, we are of the opinion that the appeal filed by the Revenue is not maintainable due to low tax effect.
9. Revenue's appeal is dismissed.
10. As for the cross-objection filed by the assessee, this being in support of the order of CIT(Appeals), has become infructuous and is also dismissed.
11. To summarize the result, appeal filed by the Revenue is dismissed and cross-objection filed by the assessee is also dismissed. The order was pronounced in the Court on Tuesday, the 28th of August, 2012, at Chennai.
sd/- sd/-
(Vikas Awasthy) (Abraham P. George)
Judicial Member Accountant Member
Chennai,
Dated the 28th August, 2012.
Kri.
7 W.T.A. No.29/Mds/12
C.O. No. 119/Mds/12
Copy to: (1) Assessee
(2) Assessing Officer
(3) CIT(A)-I, Chennai
(4) CIT, Central-I, Chennai
(5) D.R.
(6) Guard file