TMI Blog2021 (1) TMI 121X X X X Extracts X X X X X X X X Extracts X X X X ..... ke apparent from record in the order of the Tribunal dated 26/06/2019 so as to recall the order u/s. 254(2) of the I.T. Act. - M.P. Nos. 158 to 161/Coch/2019 (Arsg. Out of I.T.A. Nos. 532 to 535/Coch/2013, M.P. Nos.162 to 166/Coch/2019 (Arsg. Out of I.T.A. Nos. 539 to 543/Coch/2013), M.P. Nos. 167 to 170/Coch/2019 (Arsg. out of I.T.A. Nos. 594 to 597/Coch/2013) - - - Dated:- 9-10-2020 - M.P. Nos. 171 to 175/Coch/2019 (Arsg. out of I.T.A. Nos.525 to 529/Coch/2013), M.P. Nos. 176 to 178/2019 (Arsg. out of I.T.A. Nos. 587 to 589/Coch/2013) S/Shri Chandra Poojari, AM And George Mathan, JM For the Assessee : Shri Jose Kappen, CA For the Revenue : Shri B. Sajjive/Shri Mritunjaya Sharma. Sr. DRs. ORDER PER CHANDRA POOJARI, AM: These Miscellaneous appeals are filed by the Department seeking recall of the common order of the Tribunal dated 26/06/2019 in the case of different assessees in ITA Nos. 532 to 535/Coch/2013, 539 to 543/Coch/2013, 595 to 597/Coch/2013, 525 to 529/Coch/2013 and 587 to 589/Coch/2013. The relevant assessment years are 2002-03 to 2006-07. 2. Brief facts of the case are that a search u/s, 132 of the Income Tax Act was conducted on 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Name of assessees Asst. Years ITA Nos. 1. M/s. New Kerala Investments 2002-03 to 2006-07 169,223,194, 2. M/s. E.T. Devassy and Sons, Edassery Jewellers 2003 to 2005-06 141,171,216, 110,103,150 3. M/s. St. Francis Clay Works 2002-03 to 2006-07 134,222,211 4. M/s. Edassery Ceramics 2002-03 to 2005-06 240,210,148 5. M/s. St. Francis Clay D cor Tiles 2004-05 to 2006-07 234,193,104, 239 and 157/2015 2.6 The High Court admitted the review petition in R.P. No. 1123/2015 and remanded back the above 21 cases out of 84 cases to the Tribunal for fresh consideration, vide order dated 22.03.2016, with the following observation: Therefore we set aside the order passed by the tribunal in the above appeals and remand the cases to the Tribunal to re-consider the question raised in these appeals by taking into ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (1) and the circumstances under which such appeal or application for reference was filed or no filed in respect of any case. (5) Every order, instruction or direction which has been issued by the Board fixing monetary limits for filing an appeal or application for reference shall be deemed to have been issued under sub-section (1) and the provisions of subsection (2), (3) and (4) shall apply accordingly. 4.1 Relevant extracts (paras 1 to 13) from the aforesaid CBDT Circular No. 3/2018 dated 11/07/2018 is also reproduced hereunder for ready reference: Subject: Revision of monetary limits for filing of appeals by the Department before Income Tax Appellate Tribunal, High Courts and LPs/appeals before Supreme Court-measures for reducing litigation-Reg. Reference is invited to Board's Circular No. 21 of 2015 dated 10.12.2015 wherein monetary limits and other conditions for filing departmental appeals (in Income-tax matters) before Income Tax Appellate Tribunal, High Courts and SLPs/ appeals before Supreme Court were specified. 2. In supersession of the above Circular, it has been decided by the Board that departmental appeals may be filed on merits before ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in para 3. In other words, henceforth, appeals can be filed only with reference to the tax effect in the relevant assessment year. However, in case of a composite order of any High Court or appellate authority, which involves more than one assessment year and common issues in more, than one assessment year, appeals shall be filed in respect of all such assessment years even if the tax effect is less than the prescribed monetary limits in any of the years(s), if it is decided to file appeal in respect of the year(s) in which tax effect exceeds the monetary limit prescribed. In cases where a composite order/judgment involves more than one assesses, each assesse shall be dealt with separately. 6. Further, where income is computed under the provisions of section 115JB or section 115JC, for the purposes of determination of 'tax effect', tax on the total income assessed shall be computed as per the following formula:- (A - B) + (C - D) where, A = the total income assessed as per the provisions other than the provisions contained in section 115JB or section 115JC (herein called general provisions); B = the total income that would have been chargeable had the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Department Accordingly, they should impress upon the Tribunal or the Court that such cases do not have any precedent value and also bring to the notice of the Tribunal/ Court the provisions of sub section (4) of section 268A of the Income-tax Act, 1961 which read as under : (4) The Appellate Tribunal or Court, hearing such appeal or reference, shall have regard to the orders, instructions or directions issued under sub-section (1) and the circumstances under which such appeal or application for reference was filed or not filed in respect of any case. 9. As the evidence of not filing appeal due to this Circular may have to be produced in courts, the judicial folders in the office of Pr.CsIT/ CslT must be maintained in a systemic manner for easy retrieval. 10. Adverse judgments relating to the following issues should be contested on merits notwithstanding that the tax effect entailed is less than the monetary limits specified in para 3 above or there is no tax effect: (a) Where the Constitutional validity of the provisions of an Act or Rule is under challenge, or (b) Where Board's order. Notification, Instruction or Circular has been held to be illegal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT to withdraw the appeals. In our considered view, there is no necessity for adjourning the appeals as the tax effect involved in the present appeals of the Revenue is less than ₹ 20 lakhs and accordingly, the request for adjournment is rejected. 4.4 Further, the Ld. DR was not able to show that the cases of the assessees are governed by any of the following exceptions: 1) where the constitutional validity of the Act or Income Tax Rules, 1962 is under challenge, or. 2) where the CBDT Order, Notification, Instruction or Circular has been held to be illegal or ultra vires, or 3) where the revenue audit objections in the case of the assessee has been accepted by the Department, or 4) where the addition relates to undisclosed foreign assets/bank accounts. Being so, the assessees cases are governed by the above CBDT circular. Hence, the Department is disentitled to file appeals before the Tribunal in respect of these assessees. However, by way of abundant caution, liberty is granted to the Revenue to file Miscellaneous Petition if the assessees cases fall under any of the exceptions mentioned above or if the Department is able to show t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Department from filing the appeal in spite of the tax effect being below the monetary limits specified in that Circular. Therefore, it was prayed that the mistake apparent from record in the decision of the Tribunal in the above cases may kindly be rectified and appropriate remedial orders be passed. 5. It was submitted by the Ld. DR that since the Department has challenged the constitutional validity of the provisions of section 153A of the I.T. Act, the Tribunal in the second round ought to decide the issue on merits as per the exceptions provided in CBDT Circular No. 3/2018 dated 11/07/2018. Therefore, according to the Ld. DR, the order of the Tribunal is to be recalled so as to decide the appeals on merit. 6. On the other hand, the Ld. AR submitted that while filing Miscellaneous Applications, the department has raised a new ground that the appeals filed by them are covered by the exemptions provided in Circular No. 3/2018, viz, Adverse judgment relating to an issue where the constitutional validity of the provisions of an Act or Rule is under challenge . In this respect, the Ld. AR submitted that the question of constitutional validity was not raised by the respondent a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gh Courts or Supreme Court in which it is held that the provisions of sec. 153A/153C are constitutionally not valid. According to the Ld. AR the CIT(A) relied on the decisions of the Tribunal and Special Bench of the Tribunal in which the provisions of sec. 153A are properly interpreted by the Tribunal. It was submitted that in this case, the department could not prove that the constitutional validity of Sec 153A/C is challenged by the assessee and the ground raised by the department is only for argument sake and without any support, and hence it deserves no merit. The Ld. AR relied on the judgment of the Bombay High Court in the case of PCIT Vs M/s Nawany Construction Co. Pvt Ltd (ITA No. 1142 of 2015) dated 10.09.2018 wherein it was held as follows: The Circulars continue to bind the Revenue and if they contain any conditions, whether such conditions are attracted or not would have to be proved and established by the Revenue. Once there is no such record before us, we do not countenance the oral request of Mr. Pinto. Consequently, we do not see any reason to entertain this appeal. It is dismissed. 6.3 The Ld. AR relied on the judgment of the Delhi High Court in the cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case and when the AO is empowered to assess and reassess income for six prior period assessment years notwithstanding the provisions in sections 139, 147, 148, 149, 151 and 153, is not the above approach of the Tribunal one putting an artificial cap on section 153A? 7.1 These questions framed by the Revenue were answered by the Jurisdictional High Court vide judgment in ITA No.169/2015 Ors. dated 22/03/2016 as follows : 17. After considering the rival submissions and appreciating and perusing the pleadings and documents produced by the Revenue and the written submissions made by the learned counsel for the assessee, we find that the Tribunal without taking any efforts to find out the facts and circumstances involved in the cases on hand has relied on the decision of the Special Bench of the ITAT in All Cargo Logistics Ltd. (supra) and has held that there was no need to interfere with the order passed by the Appellate Tribunal. In order to consider the issue, we think it is profitable to extract section 132(1) and clause (a) and sub-section (4). 132 Search and seizure (1) Where the Director General or Director or the Chief Commissioner or Commissioner or Addi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act 1961. Therefore, by going by the said provision not only the books, documents, documents etc. etc. that are unearthed during such examination can also be used in evidence in any proceeding under the Indian Income Tax Act, 1961. Thus viewing the provision in such manner, it is an admitted fact that the Managing Partner of the firms in question has given a voluntary statement to the AO that there is a undisclosed income of ₹ 2.75 Crores, which according to the learned counsel, was retracted by the Managing Partner subsequently. Thus it can be seen that even according to the assessee, there was a disclosure made by giving a statement during the course of search and therefore, the AO, by virtue of the power conferred on him under section 153A was competent to issue notice under the said provision and require the assessee firms to furnish the returns as provided thereunder. Neither under section 132 or under section 153A, the phraseology incriminating is used by the Parliament. Therefore, any material which was unearthed during search operations or any statement made during the course of search by the assessee is a valuable piece of evidence in order to invoke section 15 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 153, the assessment or reassessment relating to any assessment year which has abated under the second proviso to sub-section (1), shall stand revived with effect from the date of receipt of the order of such annulment by the Commissioner. Provided that such revival shall cease to have effect, if such order of annulment is set aside. Explanation.- For the removal of doubts, it is hereby declared that.- (i) save as otherwise provided in this section, section 153B and section 153C, all other provisions of this Act shall apply to the assessment made under this section. ii) in an assessment or reassessment made in respect of an assessment year under this section, the tax shall be chargeable at the rate or rates as applicable to such assessment year. 20. On a plain reading of Section 153A, it is clear that once search is initiated under section 132 or a requisition is made under section 132A after the 31st day of May 2003, the Assessing Officer is empowered to issue notice to such person requiring him to furnish return of income in respect of each assessment year following six assessment years referred to in clause (b). It further treats the returns so filed a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Revenue as well as the assessee or any other principles of law laid down by competent courts of law and take a decision on merits in accordance with law. The question thus framed is answered in favour of revenue to the extent indicated above. However we make it clear that the common question with regard to the power of the Appellate Authority with respect to receipt of evidence in appeal and its application, concluded by the Tribunal in 84 cases and upheld by this court, will remain undisturbed. The appeals are disposed of accordingly. 7.2 In view of the above judgment of the Jurisdictional High Court, the above cases came up for hearing before the Tribunal on 26/09/2019 and the Tribunal vide order dated 26/09/2019 dismissed the above appeals of the Revenue by placing reliance on the CBDT Circular No. 3/2018 dated 11/07/2018. Not being satisfied with the findings of the Tribunal, the Department has now filed the Miscellaneous Petitions before us. 7.3 In our humble opinion, the Revenue has not at all raised the constitutional validity of the assessment proceedings u/s. 153A of the I.T. Act or provisions of other sections namely, 139, 142, 148, 151 and 153 of the I.T. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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