C I T vs. M/S MAJESTIC AUTO LTD.

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ITA/536/2008HC Punjab & HaryanaPHHC01080538200811 May 20162 pages
AI SummaryDismissed

What did the High Court hold?

The High Court dismissed the appeal as not pressed. The Revenue, citing Circular No. 21/2015 and Circular No. 279/Misc/M-142/2007-ITJ (Part) issued by the Central Board of Direct Taxes, stated that they did not wish to press the appeal as the tax effect involved was less than Rs. 20 lacs. The Court granted liberty to the revenue to file an application for revival of the appeal if something survived therein. It was clarified that the withdrawal of the appeal by the revenue would not be taken as an affirmation of the Tribunal's order on merits, and the legal issue raised by the revenue was left open to be adjudicated in an appropriate case. No decision was made on the merits of the substantial question of law.

What were the facts?

The Revenue, Commissioner of Income Tax-I, Ludhiana, filed an appeal under Section 260A of the Income Tax Act, 1961, against an order dated 28.02.2005 passed by the Income Tax Appellate Tribunal (ITAT), Chandigarh Bench 'A'. The appeal pertained to the assessment year 1997-98 and concerned the applicability of the explanation to clause VIII to Section 115JA of the Act. The ITAT had directed that the respondent company, M/s Majestic Auto Ltd., should be given the benefit of this explanation. The Revenue challenged this direction, arguing that the explanation was introduced with effect from 01.04.1998 and was not applicable retrospectively.

What were the issues?

1. Whether, on the facts and circumstances of the case, the Income Tax Appellate Tribunal is justified in law in directing to give the benefit to the respondent company in accordance with the explanation to clause VIII to Section 115JA of the Income Tax Act, by ignoring that the said explanation was introduced with effect from 1.4.1998 and was not applicable retrospectively? (Question of law turning on Section 115JA of the Income Tax Act, 1961). Contentions: Assessee: No arguments recorded in the judgment. Revenue: The Revenue contended that the explanation to clause VIII to Section 115JA was introduced prospectively from 01.04.1998 and therefore, could not be applied retrospectively to the assessment year 1997-98. The Revenue relied on Circular No. 21/2015 dated 10.12.2015 and Circular No. 279/Misc/M-142/2007-ITJ (Part) dated 8.3.2016 issued by the Central Board of Direct Taxes, indicating that they did not wish to press the appeal due to the tax effect being less than Rs. 20 lacs.

Which sections of the Income-tax Act were involved?

Section 260A,Section 115JA

AI-generated summary — verify with the full judgment below

-1- IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH Date of Decision: 11.05.2016 Commissioner of Income Tax-I, Ludhiana .......Appellant Versus M/s Majestic Auto Ltd., ......Respondent CORAM: HON'BLE MR. JUSTICE RAJESH BINDAL HON'BLE MR. JUSTICE HARINDER SINGH SIDHU Present: Mr. Rajesh Katoch, Advocate for the appellant. Mr. Alok Mittal, Advocate for the respondent. RAJESH BINDAL,J. This appeal has been filed under Section 260 A of the Income Tax Act, 1961 (for short 'the Act'), against the order dated 28.2.2005 passed by the Income Tax Appellate Tribunal, Chandigarh Bench 'A' Chandigarh, in ITA No. 413/Chandi/2001, for the assessment year 1997-98, raising the following substantial question of law: Whether on the facts and circumstances of the case, the Income Tax Appellate Tribunal is justified in law in directing to give the benefit to the respondent company in accordance with the explanation to clause VIII to Section 115JA of I.T. Act by ignoring that the said explanation was introduced with effect from 1.4.1998 and was not applicable retrospectively? REEMA SAINI 2016.05.18 11:22 I attest to the accuracy and authenticity of this document High Court, Chandigarh -2- Learned counsel for the appellant-revenue submitted that in view of circular No.21/2015 dated 10.12.2015 read with circular No.279/Misc/M-142/2007-ITJ (Part) dated 8.3.2016, issued by Central Board of Direct Taxes, he does not wish to press the present appeal, as the tax effect involved is less than ` 20 lacs. However, he prays that liberty be granted to the revenue to file an application for revival of the appeal in case something survives therein. Dismissed as not pressed with liberty as prayed for. It is however, clarified that withdrawal of the appeal by the revenue shall not be taken as affirmation of order of the Tribunal on merits. The legal issue as claimed by the revenue is left open to be adjudicated in an appropriate case. (RAJESH BINDAL)

JUDGE (HARINDER SINGH SIDHU) 11.05.2016 JUDGE reema REEMA SAINI 2016.05.18 11:22 I attest to the accuracy and authenticity of this document High Court, Chandigarh

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