Madras High Court
Commissioner Of Income Tax vs Rajasthan Patrika Limited) on 28 April, 2009
Author: K.Raviraja Pandian
Bench: K.Raviraja Pandian, M.M.Sundresh
IN THE HIGH COURT OF JUDICATURE AT MADRAS Dated : 28.04.2009 Coram : THE HONOURABLE MR.JUSTICE K.RAVIRAJA PANDIAN and THE HONOURABLE MR.JUSTICE M.M.SUNDRESH Tax Case (Appeal) No.843 of 2004 Commissioner of Income Tax, Trichy. Appellant v. Sri P.L.Gandhi N.S.B.Road Trichy-2. Respondent Tax Case (Appeal) preferred under section 260A of the Income Tax Act, 1961, against the order of the Income Tax Appellate Tribunal, Madras 'B' Bench, dated 16.9.2003 made in ITA No.620 of 2003 for the assessment year 1996-97. For appellant : Mr.J.Naresh Kumar, Senior Standing Counsel for Income Tax Department JUDGMENT
(Judgment of the Court was delivered by K.RAVIRAJA PANDIAN, J.) This appeal is at the instance of the revenue against the order of the Income Tax Appellate Tribunal, Madras 'B' Bench, dated 16.9.2003 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 and P.L.Gandhi are partners of the firm, and they are the co-owners of the properties at Chennai (Kannammai Buildings, Chennai etc.,). Notice under Section 148 was issued, the returns were filed and process under Section 143(1) of the Income-tax Act, 1961. Later this was taken for scrutiny by issuing notice under Section 143(2) and assessment was completed under Section 143(3) read with Section 147. The assessee filed an appeal before the Commissioner of Income-tax (Appeals), Tiruchirapalli and assessment was upheld by the Commissioner of Income-tax (Appeals) and the assessing officers action was declared as valid. Aggrieved by the Commissioner of Income-tax (Appeals), the assessees had filed an appeal before the Income-tax Appellate Tribunal, Chennai. The Income-tax Appellate Tribunal has decided in favour of the assessee and held that issues against the revenue. Aggrieved by this order, the appellant filed the present appeal.
3. The appeal was admitted on the following substantial questions of law :
"Whether on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal was right in holding that the reopening of the assessment under Section 147, and competition of assessment without notice under Section 143(2) within 12 months is not valid?
4. Heard the learned counsel for the revenue and perused the order of the Tribunal.
5. An issue similar to the issue in this case came up for consideration before a Division Bench of this Court in the case of CWT v. S.Annamalai, (2002) 258 ITR 675, wherein it was held that in order to reduce the litigation for filing departmental appeals/references before the Income Tax appellate Tribunal, High Courts and the Supreme Court, the Central Board of Direct Taxes, by Circular F. No.279/126/98-IT, dated March 27,2000, refixed the monetary limits, however, casting out certain exceptions. The exceptions stated are (i) where revenue audit objection in the case has been accepted by the department, (ii) where the Board's order, notification, instruction or circular is the subject matter of an adverse order, (iii) where prosecution proceedings are contemplated against the assessee, and (iv) where the constitutional validity of the provisions of the Act are under challenge.
6. The Revenue had not made out a case that the issue involved in the appeal before the Tribunal falls within the exceptions provided in the circular.
7. It may be noted that this Court considered a similar issue in the case of CIT v. Associated Electrical Agencies, (2007) 295 ITR 496, wherein this Court held as follows :
"We are of the considered view that none of the exceptions stated in the circular are applicable to the facts of the present case. The circular was stated to be issued by invoking the statutory power under Section 119 of the Income-tax Act. The appeal is filed under Section 260-A of the Income-tax Act. It is well settled principle of law that each and every provision of a statute has to be given the same importance. One provision cannot be alleviated to a higher pedestal than the other provision, of course, unless or otherwise specifically stated either in the scheme, the Act or in the provision itself that a particular provision is subjected to or qualified by any other provision or the provision can be given effect to notwithstanding anything contained in any other provisions by assigning overriding effect. Hence, the contention that notwithstanding the circular, which was issued under Section 119 of the Income-tax Act, the appeal could be filed by the revenue under Section 260-A has to be rejected for the reason that if the contention is accepted, one of the Section would become virtually otiose and that cannot be the intention of the law makers.
Thus, following the long line of case laws reported in 258 ITR 300 (COMMISSIONER OF INCOME-TAX Vs. RAJASTHAN PATRIKA LIMITED), 261 ITR 406 (COMMISSIONER OF INCOME-TAX Vs. P.S.T.S. THIRUVIRATHNAM AND SONS), to which one of us is a party (K.Raviraja Pandian,J.), 292 ITR 314 (COMMISSIONER OF INCOME-TAX Vs. DIGVIJAY SINGH) and 254 ITR 565 (COMMISSIONER OF INCOME-TAX Vs. CAMCO COLOUR CO.), this Court held that the uniform line of judicial opinion is that if the tax effect is less than what is stated in the circular, the Revenue need not agitate the issue on appeal and that the circular is binding on the Revenue."
The said judgment of this Court in the case of Associated Electricals Agencies, (2007) 295 ITR 496 has been relied by the Gujarat High Court in the case of CIT v. Concord Pharmaceuticals, (2008) 220 CTR 117 to reject the appeal of the revenue where the tax effect is less than Rs.2.00 lakhs. The apex Court in the case of State of Kerala v. Kurian Abraham (P) Ltd., (2008) 3 SCC 582 has laid down that the circular issued by the CBDT is much binding on the revenue and that requires no support of judicial precedent.
8. Admittedly, the tax effect in this case is less than Rs.2.00 lakhs, the limit prescribed under the above said Circular dated 27.03.2000. The appeal is filed on 01.07.2005. Hence, the circular is binding on the revenue. The appeal is dismissed. No costs.
(K.R.P.,J.) (M.M.S.,J.) 28.04.2009 Index : Yes/No Internet: Yes/No To
1.The Assistant Registrar Income-tax Appellate Tribunal Rajaji Bhavan, Besant Nagar, 'B' Bench, Chennai.
2. The Commissioner of Income Tax (Appeals), Tiruchirapalli.
3. The Income Tax Officer,Ward I (3), Tiruchy K.RAVIRAJA PANDIAN, J.
and M.M.SUNDRESH, J.
usk T.C. (A) No.843 of 2004 28.04.2009