PR. COMMISSIONER OF INCOME TAX-2, JALANDHAR vs. M/S CAPITAL LOCAL AREA BANK LTD.
What did the High Court hold?
The High Court dismissed the appeal filed by the Revenue. The dismissal was based on the low tax effect of ₹49,826/-, following the precedent set by the Supreme Court in Commissioner of Income Tax v. Dhanalekshmi Bank Ltd. [2015] 373 ITR 526 (SC). In that case, the Supreme Court had dismissed the appeal without going into the merits due to the low tax effect, leaving the question of law open. The High Court clarified that the dismissal of this appeal would not be considered an affirmation of the ITAT's order on merits. Furthermore, the legal issue claimed by the revenue was expressly left open to be adjudicated in an appropriate future case.
What were the facts?
The appeal was filed by the Principal Commissioner of Income Tax-2, Jalandhar (the Revenue) against M/s Capital Local Area Bank Ltd. (now Capital Small Finance Bank Ltd.), Jalandhar (the Assessee). The tax effect involved in the present case was ₹49,826/-. The High Court of Punjab & Haryana at Chandigarh was considering the appeal. The procedural history leading to this appeal is not detailed in the provided text, other than it being an appeal against an order of the Income Tax Appellate Tribunal (ITAT).
What were the issues?
1. Whether the appeal should be dismissed due to low tax effect, as per the decision of the Apex Court in Commissioner of Income Tax v. Dhanalekshmi Bank Ltd. [2015] 373 ITR 526 (SC)? Assessee's Contention: The judgment does not record any specific contentions made by the assessee. However, the court's decision implies reliance on the precedent set by the Supreme Court regarding low tax effect. Revenue's Contention: The judgment does not record any specific contentions made by the revenue regarding the merits of the case. The revenue's appeal was dismissed based on the tax effect.
AI-generated summary — verify with the full judgment below
IN THE HIGH COURT OF PUNJAB & HARYANA AT CHANDIGARH ITA-403-2017 (O&M) Date of Decision: 24.9.2018 Principal Commissioner of Income Tax-2, Jalandhar ...Appellant. Versus M/s Capital Local Area Bank Ltd. (now Capital Small Finance Bank Ltd.), Jalandhar ...Respondent. CORAM:- HON'BLE MR. JUSTICE AJAY KUMAR MITTAL. HON'BLE MR. JUSTICE AVNEESH JHINGAN. PRESENT: Mr. Vivek Sethi, Sr. Standing Counsel for the appellant. Mr. J.S. Bhasin, Advocate for the respondent. AJAY KUMAR MITTAL, J. A perusal of the record shows that the tax effect involved in the present case is ` 49,826/-. In view of the order of the Apex Court in Commissioner of Income Tax v. Dhanalekshmi Bank Ltd. [2015] 373 ITR 526 (SC), where the Supreme Court had dismissed the appeal without going into the merits of the appeal due to low tax effect leaving the question of law open, the present appeal is dismissed. It is, however, clarified that dismissal of the appeal shall not be taken to be affirmation of order of the Tribunal on merits. Further, the legal issue as claimed by the revenue is being left open to be adjudicated in an appropriate case. (AJAY KUMAR MITTAL) JUDGE September 24, 2018 (AVNEESH JHINGAN) gbs JUDGE Whether Speaking/Reasoned Yes/No Whether Reportable Yes/No GURBACHAN SINGH 2018.09.27 16:29 I attest to the accuracy and integrity of this document
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