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ACIT, Circle 50(1),R.No. 503,5th floor, Aaykar Bhavan,Laxmi Nagar, Delhi vs. M/s Indian Express Newspapers Mumbai Limited,(Presently known as the Indian Express Newspaper),A-8, Sector-7, Noida (UP)
July, 28th 2012
                                                            I.T.A. NOS. 665 & 666/DEL/2011


                     IN THE INCOME TAX APPELLATE TRIBUNAL
                         DELHI BENCH "SMC" NEW DELHI
           BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER
                          I.T.A. Nos. 665 & 666/Del/2011
                            F.Yrs. : 2005-06 & 2006-07
ACIT, Circle 50(1),                       vs. M/s Indian Express Newspapers
R.No. 503, 5th floor, Aaykar Bhavan,          Mumbai Limited,
Laxmi Nagar, Delhi                            (Presently known as the Indian
                                              Express Newspaper),
                                              A-8, Sector-7, Noida (UP)
                                              (PAN/GIR NO. : AACCT1148F)

      (Appellant )                               (Respondent )

           Assessee by                      :    Sh. K.V.S.R. Krishna, CA
          Department by                     :    Dr. B.R.R. Kumar, Sr. D.R.





                                  ORDER
      Theses appeals by the Revenue are directed against the order of

the Ld. Commissioner of Income Tax (Appeals)-XXX, New Delhi dated

16.11.2010 and pertain to financial years 2005-06 & 2006-07.


2.    The grounds        raised    in the       I.T.A. No. 665/Del/2011 read as

under:-


            "On the facts and in the circumstances of the case as well
            as in law, the Ld. Commissioner of Income Tax (A) has erred
            in

            i)       Holding that there is no liability for deduction of tax at
                     source and as the deductee assessee is exempted
                     from tax, there cannot be any liability of interest u/s.



                                          1
                                                       I.T.A. NOS. 665 & 666/DEL/2011


                 201(A).      The interest     cannot be computed on zero
                 principal.
          ii)    Not following the order of Hon'ble Supreme court in
                 the case of Hindustan Coco Cola Beverages Pvt. Ltd.
                 vs. C.I.T. in (2007) 293 ITR (SC) wherein it is held that
                 no demand visualize u/s. 201(1) should             be enforced
                 after the deductor has satisfied the           TDS Officer in
                 charge of TDS that taxes have been paid by the
                 deductee assessee.          However, this will not alter the
                 liability to charge interest u/s. 201(1A) till the date of
                 payment of taxes by the deductee assessee or the
                 liability for penalty u/s. 201(1A) till the date of
                 payment of taxes by the deductee assessee or the
                 liability for penalty u/s. 271(1)(c) of the I.T. Act.
          iii)   Though the revenue effect is ` 1,42,150/- only which
                 is less than the monetary limit prescribed by the
                 Board, since the legal issue is involved in this case,
                 appeal to the ITAT is being filed in view of the clause
                 (a) of para 8 of the Board Instruction No. 05/2008
                 dated 15.5.2008.
                 The appellant craves leave to add, alter or amend any
                 of the grounds of appeal at the time of hearing."

3.   The grounds raised         in the I.T.A. No. 666/Del/2011           read as
under:-

          "On the facts and in the circumstances of the case as well
          as in law, the Ld. Commissioner of Income Tax (A) has erred
          in


                                      2
                                                        I.T.A. NOS. 665 & 666/DEL/2011


           i)     Holding that there is no liability for deduction of tax at
                  source and as the deductee assessee is exempted
                  from tax, there cannot be any liability of interest u/s.
                  201(A).      The interest     cannot be computed on zero
                  principal.
           ii)    Not following the order of Hon'ble Supreme court in
                  the case of Hindustan Coco Cola Beverages Pvt. Ltd.
                  vs. C.I.T. in (2007) 293 ITR (SC) wherein it is held that
                  no demand visualize u/s. 201(1) should             be enforced
                  after the deductor has satisfied the           TDS Officer in
                  charge of TDS that taxes have been paid by the
                  deductee assessee.          However, this will not alter the
                  liability to charge interest u/s. 201(1A) till the date of
                  payment of taxes by the deductee assessee or the
                  liability for penalty u/s. 201(1A) till the date of
                  payment of taxes by the deductee assessee or the
                  liability for penalty u/s. 271(1)(c) of the I.T. Act.
           iii)   Though the revenue effect is ` 1,42,150/- only which
                  is less than the monetary limit prescribed by the
                  Board, since the legal issue is involved in this case,
                  appeal to the ITAT is being filed in view of the clause
                  (a) of para 8 of the Board Instruction No. 05/2008
                  dated 15.5.2008.
                  The appellant craves leave to add, alter or amend any
                  of the grounds of appeal at the time of hearing."

4.    At the threshold, we note that tax effect in these cases are less than

` 3 lacs fixed by the CBDT for filing appeal before the tribunal.            As per



                                       3
                                                           I.T.A. NOS. 665 & 666/DEL/2011





Instruction No. 3/2011 (F.No. 279/Misc./142/2007-ITJ) dated 09.02.2011

issued by the CBDT, the tax effect for filing appeal before the Appellate

Tribunal should be more than ` 3 lakhs.          The aforesaid instructions have

been held to be applicable to all pending appeals by the Hon'ble Delhi High

Court in the decisions in the cases:-


(i)    C.I.T. vs. M/s P.S. Jain & Co. in ITA No. 179/1991, order dated 2nd
       August, 2010.

(ii)   C.I.T. vs. Delhi Race Club in ITA No. 128/2008, order dated 3rd March,
       2011.

4.1    I further find that clause (a) of para 8 of the Board instruction No. 5/

       2008 dated 15.5.2008 provides the following:


               "8.   Adverse judgements relating to the following should be

                     contested irrespective of the tax effect.

               (a)   Where the Constitutional validity of the provisions of an Act

                     or Rule are under challenge.

               (b)   Where Board's order, Notification, Instruction or Circular

                     has been held to be illegal or ultra virus.

               (c)   Where Revenue Audit        objection in the case has been

                     accepted by the Department."

4.2    A reading of the above signifies that ground no. (iii) taken in Revenue
appeals are not sustainable.




                                          4
                                                        I.T.A. NOS. 665 & 666/DEL/2011


5.     In     the   present   cases,    admittedly     the     tax      is    below

` 3 lakhs. Hence, the appeals are in contravention of the aforesaid CBDT

Circular/Instruction.    Hence,   the   same   are   liable   to   be   dismissed.

Accordingly, these appeals by the revenue stand dismissed for tax effect.


6.     In the result, both the Revenue appeals stand dismissed.

       Order pronounced in the Open Court on 26/7/2012.


                                                               Sd/-


                                                        [SHAMIM YAHYA]
                                                     ACCOUNTANT MEMBER
Date 26/7/2012
SRBHATNAGAR

Copy forwarded to: -
1.     Appellant 2.      Respondent    3.       CIT     4.CIT (A) 5.DR, ITAT
                              TRUE COPY
                                                        By Order,
                              Assistant Registrar, ITAT, Delhi Benches




                                        5
 
 
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