Income Tax Appellate Tribunal - Lucknow
Income Tax Officer-6(2), Kanpur vs M/S Hindustan Ferro & Industries Ltd., ... on 14 June, 2018
I.T.A. No.195/Lkw/2017
1
Assessment Year:2004-05
IN THE INCOME TAX APPELLATE TRIBUNAL
LUCKNOW BENCH 'A', LUCKNOW
BEFORE SHRI T. S. KAPOOR, ACCOUNTANT MEMBER AND
SHRI PARTHA SARATHI CHAUDHURY, JUDICIAL MEMBER
ITA No.195/Lkw/2017
Assessment Year:2004-05
Income Tax Officer-6(2), Vs. M/s Hindustan Ferro & Industries
Kanpur. Ltd., 3/190, Vishnupuri,
Kanpur.
PAN:AAACH 5670 A
(Appellant) (Respondent)
Appellant by Shri J. H. Minhas, CIT, (.D.R.)
Respondent by Shri Rakesh Garg, Advocate
Date of hearing 13/06/2018
Date of pronouncement 14/06/2018
ORDER
PER T. S. KAPOOR, A.M.
This is an appeal filed by the Revenue against the order of CIT(A) dated 08/12/2016.
2. At the outset, Learned A. R. submitted that the appeal filed by the Revenue in this case is not sustainable simply because of the fact that tax effect in this case is less than the prescribed limited of Rs.10 lacs. Learned A. R. in this respect filed the brief synopsis wherein the income declared by the assessee and that assessed by Assessing Officer and relief allowed by learned CIT(A) was mentioned. Learned A. R. submitted that the income finally assessed by the Assessing Officer turned out to Rs.35,63,815/- and assessee had unabsorbed depreciation and business loss to the tune of I.T.A. No.195/Lkw/2017 2 Assessment Year:2004-05 approximately Rs.11 crores. Learned A. R. further submitted that Hon'ble Allahabad High Court in the case of CIT vs. Zila Sahkari Bank Ltd. [2014] 45 Taxmann.com 438 (Allahabad) has held that notional tax effect is not to be considered while following Instruction No. 5 of 2008 dated 15th May 2008 which is related to not filing of appeal beyond a certain monetary limit.
3. Learned D. R., on the other hand, fairly agreed and conceded the above facts.
4. We have heard the rival parties and have gone through the material placed on record. We find that the assessee filed its return of income declaring a loss of Rs.24,66,823/- and the Assessing Officer assessed the income at Rs.98,08,140/-. The Assessing Officer, after considering relief of Rs.62,44,325/-, assessed the total income vide order dated 08/02/2017 at Rs.35,63,815/-. The Assessing Officer in his order also allowed set off of business loss of previous year upto the extent of Rs.35,63,815/- and therefore, the tax demand became nil. Therefore, in the present case the tax liability becomes zero. Though there is a notional tax liability on the relief given by learned CIT(A) however, Hon'ble Allahabad High Court in the case of Zila Sahkari Bank Ltd. (supra) vide order dated 23rd October, 2013 has held that where the tax is nil the notional tax liability has to be ignored. The findings of Hon'ble Allahabad High Court are reproduced below:
"1. The present appeal has been filed by the Department under Section 260A of the Income-Tax Act, 1961 against the judgment and order dated 14.12.2009, passed by the Income Tax Appellate Tribunal, Lucknow in ITA No.470/Luc/2009, for the assessment year 2004-05.
2. On 27.04.2010, a Coordinate Bench of this Court has admitted the appeal on the following substantial question of law:--
I.T.A. No.195/Lkw/2017 3 Assessment Year:2004-05 "Whether the Tribunal has committed substantial illegality while interpreting instruction No. 5 of 2008 dated 15th May, 2008 without taking into account the loss, notional tax effect in case of loss?"
3. The brief facts of the case are that the assessee is a Cooperative Bank. For the assessment year under consideration, the assessee has filed the return declaring the loss of Rs.2,81,73,770/- after claiming deduction under Section 36(1)((viia) of the Act for Rs.2,48,03,100/-. The assessment was completed under Section 143(3) and the AO has disallowed the bad debt and its interest claimed under Section 36(1)(viia) resulting in an addition on an appeal CIT(A) has deleted the same. Not being satisfied, the Department has filed an appeal before the Tribunal, who upholds the order of the CIT(A) by observing that the tax effect is less than Rs.2.00 lacs, so as per the C.B.D.T.-Instruction No. 5/2008 dated 15.05.2008. Rhe appeal is not maintainable. Still not being satisfied, the Department has filed the present appeal.
4. With this background, heard Sri D.D. Chopra, learned counsel for the Department and learned counsel for the assessee.
5. After hearing both the parties and on perusal of the record, it appears that the assessee is enjoying the benefit of Section SOP of the Act and as such the tax on an income is exempted. Even if the addition ii sustained, there will be no tax demand as the tax effect will be NIL.
6. In the case of CIT v. Manglam Ricinus Ltd. [20081 174 Taxman 186 Delhi, the Hon'ble Delhi High Court observed that in such type of cases, the exercise shall be merely academic exercise.
7. In the instant case, the Tribunal observed that-in case the issue arising in the subsequent years and has tax effect, it is left open to be consideration by the Department. With this liberty, the appeal filed by it, Department was dismissed. The same appears reasonable in the peculiar facts and circumstances of the case. Hence, the order passed by the Tribunal is hereby sustained."
I.T.A. No.195/Lkw/2017 4 Assessment Year:2004-05
5. In view of the above, the appeal of the Revenue is dismissed being below the monetary tax limited.
6. In the result, the appeal of the Revenue is dismissed.
(Order pronounced in the open court on 14/06/2018) Sd/. Sd/.
(PARTHA SARATHI CHAUDHURY) ( T. S. KAPOOR )
Judicial Member Accountant Member
Dated:14/06/2018
*Singh
Copy of the order forwarded to :
1. The Appellant
2. The Respondent.
3. Concerned CIT
4. The CIT(A)
5. D.R., I.T.A.T., Lucknow