If the appeal has no effect on tax liability its liable to be dismissed

IN THE INCOME TAX APPELLATE TRIBUNAL

DELHI BENCH ‘H’: NEW DELHI

BEFORE SHRI G.D.AGRAWAL, VICE PRESIDENT AND

SHRI I.C.SUDHIR, JUDICIAL MEMBER

ITA Nos.1367/Del/2003 & 5502/Del/2003

Assessment Years: 1997-98 & 98-99

Assistant Commissioner of

Income Tax,

Circle-16(1),

New Delhi.

(Appellant)

Vs.

M/s T.V. India Limited,

7th Floor, H.T.House,

18-20, K.G.Marg,

New Delhi.

PAN: AAACT2010Q.

 (Respondent)

ITA No.169/Del/2004

Assessment Year: 1998-99

M/s T.V. India Limited,

1, Asia House,

K.G.Marg,

New Delhi – 110 001.

PAN: AAACT2010Q.

(Appellant)

Vs.

Additional Commissioner of

Income Tax,

Special Range-5,

New Delhi.

 (Respondent)

Revenue by: Shri A.K.Mishra, CIT-DR.

Assessee by: Shri Rupesh Jain, Advocate.

ORDER

PER BENCH:

ITA No.1367/Del/2003 is the appeal filed by the Revenue for AY 1997-98 while ITA No.5502/Del/2003 and 169/Del/2004 are the cross appeals by the Revenue and the assessee respectively for the AY 1998-99.

2. At the time of hearing before us, it was stated by the learned counsel that in both the years, despite huge additions, the assessed income is loss. That the set off of this loss has never been claimed in the subsequent years because in the subsequent year also, there was a loss and ultimately, the company is closed, therefore, there is no chance of claim of set off of loss by the assessee. Even otherwise, the carry forward of loss has already become barred by limitation. The above statement is supported by a chart furnished by the assessee giving the details of year-wise loss assessed/returned in these two years as well as in all the subsequent years up to AY 2004-05. From this chart, it is evident that even in all the subsequent years, the income returned was loss and no set off of loss determined in this year was claimed. It was also stated by him that subsequently the company is closed and, therefore, no return is filed.

3. In view of the above, we are of the opinion that all these appeals, either by the Revenue or by the assessee, are of academic nature because whatever would be the outcome of the appeals, it will not affect the tax liability of the assessee either in this year or in the subsequent years. The Central Board of Direct Taxes has issued Instruction No.3/2011 dated 09th February, 2011, as per which, if the tax effect is less than `3 lakhs, the Revenue is not supposed to file the appeal. In the loss case, the notional tax effect is computed keeping in view the potentiality of set off of such loss in the subsequent year.

However, since in this year, the set off of loss determined in these two years has never been claimed in the subsequent years, and now it cannot be claimed, we are of the opinion that the tax effect in these two appeals by the Revenue is nil and, therefore, the above Board’s Instruction would be squarely applicable.

4. Similarly, the appeal of the assessee is also of academic nature because it will not affect the assessee’s tax liability. At the time of hearing before us, it was stated by the learned counsel that the Revenue has initiated the penalty proceedings against the assessee and if at all the penalty is levied under Section 271(1)(c), the outcome of this appeal would be relevant. However, when it was pointed out that if at all penalty is levied under Section 271(1)(c), the assessee would be at liberty to file appeal against the levy of such penalty. The learned counsel fairly agreed that all these appeals by the Revenue as well as by the assessee can be dismissed holding the same to be academic in nature.

5. In view of the above, we dismiss all the appeals being academic and, moreover, the Revenue’s appeal being in violation of CBDT’s Instruction No.3/2011 dated 9th February, 2011.

6. In the result, all the appeals are dismissed.

Decision pronounced in the open Court on 22nd March, 2013.

Sd/- Sd/-

(I.C.SUDHIR) (G.D.AGRAWAL)

JUDICIAL MEMBER VICE PRESIDENT

Dated: 22.03.2013

VK.

Copy forwarded to:

1. Revenue: Assistant Commissioner of Income Tax, Circle-16(1), New Delhi.

2. Assessee: M/s T.V. India Limited, 1, Asia House, K.G.Marg, New Delhi – 110 001.

3. CIT

4. CIT (A)

5. DR, ITAT

Assistant Registrar