Principal Commissioner Of Income Tax-I v. K V A M N Patnaik

HON'BLE SRI JUSTICE C.V.NAGARJUNA REDDY AND HON'BLE SRI JUSTICE T.AMARNATH GOUD Date:05.12.2017 Between:

Principal Commissioner of Income Tax-I, Visakhapatnam.

.....Appellant And:

K.V.A.M.N.Patnaik, Maharanipeta, Visakhapatnam.

.....Respondent Counsel for the appellant: Mr. K.Raji Reddy Senior Standing Counsel for Income Tax Department The Court made the following:

CVNR, J & TA, J Dated:05.12.2017 ORDER: (per Hon'ble Sri Justice C.V.Nagarjuna Reddy) This appeal by the Revenue is filed against order, dated 02.03.2017, in ITA.No.60/Vizag/2016 on the file of the Income Tax Appellate Tribunal, Visakhapatnam Bench, Visakhapatnam (for short 'the Tribunal').

A perusal of the order under appeal shows that the Tribunal has dismissed the Revenue's appeal as the tax effect involved in the appeal was below the monetary limit specified in Circular No.21 of 2015, dated 10.12.2015, issued by the Central Board of Direct Taxes (for short 'the CBDT'). The Tribunal also observed in its order that the departmental representative has not raised any objection to the plea of the authorised representative of the assessee to dismiss the appeal on the aforementioned ground. At the hearing, Mr. K.Raji Reddy, learned Senior Standing Counsel for Income Tax Department, submitted that the said Circular of the CBDT contains exceptions-(a) to (d) at paragraph-8 and that the present case falls under exception-(b). He has further submitted that though the Commissioner of Income Tax (Appeals) has not declared the CBDT's order or notification or instructions or Circular as illegal

CVNR, J & TA, J Dated:05.12.2017 or ultra vires, he has nevertheless granted relief to the assessee contrary to the aforementioned Circular of the CBDT. Exception-(b) of paragraph-8 of the said Circular of the CBDT reads as under:

"Where Board's order, notification, instruction or circular has been held to be illegal or ultra vires." In our opinion, if any order is passed contrary to a Circular, the same does not amount to holding such Circular as illegal or ultra vires. Therefore, the present case does not fall under any of the exceptions much less under exception-(b) of paragraph-8 of the said Circular of the CBDT. For the afore-mentioned reasons, the appeal is dismissed as being contrary to Circular No.21 of 2015, dated 10.12.2015, of the CBDT.

__________________________ JUSTICE C.V.NAGARJUNA REDDY _______________________ JUSTICE T.AMARNATH GOUD 05th December 2017 DR