COMMISSIONER OF INCOME TAX vs. M/S. THE WILLINGONT CHARITABLE

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TCA/111/2016HC Madras01 July 2025Bench: Honourable The CHIEF JUSTICE4 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that the appeal was not maintainable. The Court agreed with the Assessee that the exceptions provided in Circular No.5/2024 would not apply in this case, despite the order originating from a Section 263 proceeding. The reasoning was based on Clause 3.1(f) of Circular No.5/2024, which states that exceptions apply where the tax effect is not quantifiable or not involved. In this case, the tax effect was clearly quantified at Rs.1,84,10,624/-. The Court further clarified that the reference to Section 263 cases in the circular was for illustrative purposes only, and the exception would not apply when the tax effect is quantifiable. The circulars issued under Section 268A of the Act are aimed at litigation management and revising monetary limits. Since the tax effect was quantified, the appeal fell under the 'less than tax effect' category and was therefore not covered by the exception. The appeal was accordingly disposed of.

What were the facts?

The appeal was filed by the Commissioner of Income Tax, Chennai (Revenue) against an order dated 15.05.2015 passed by the Income Tax Appellate Tribunal, Madras 'C' Bench, Chennai. The appeal pertains to the Assessment Year 2009-10 and concerns M/s. The Willingdon Charitable Trust (Assessee). The High Court noted that both counsels agreed that the amount involved in the dispute was Rs.1,84,10,624/-. This amount was less than the Rs.2 crores threshold stipulated in Circular No.9/2024 for filing or pursuing appeals in the High Court.

What were the issues?

1. Whether the appeal filed by the Revenue is maintainable before the High Court, considering the tax effect is less than the threshold limit prescribed by Circular No.9/2024? 2. Whether the exception provided in Circular No.5/2024, which exempts cases originating from orders passed under Section 263 of the Income Tax Act, 1961, applies when the tax effect is quantifiable? Assessee's Contention: The Assessee argued that the appeal was not maintainable as the tax effect of Rs.1,84,10,624/- was below the monetary limit prescribed by Circular No.9/2024 for filing appeals in the High Court. Revenue's Contention: The Revenue contended that the appeal should be considered an exception to the monetary limit because the impugned order originated from an order passed under Section 263 of the Income Tax Act, 1961, as per Circular No.5/2024.

Which sections of the Income-tax Act were involved?

Section 260A,Section 263,Section 268A

AI-generated summary — verify with the full judgment below

T.C.A. No.111 of 2016 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 01.07.2025 CORAM THE HON'BLE MR.K.R.SHRIRAM, CHIEF JUSTICE AND THE HON'BLE MR.JUSTICE SUNDER MOHAN Tax Case Appeal No.111 of 2016 Commissioner of Income Tax Chennai. .. Appellant -vs- M/s.The Willingdon Charitable Trust, No.603, 6th Floor, Rani Seethai Hall, Chennai 600 006. .. Respondent Prayer: Appeal filed under Section 260A of the Income Tax Act, 1961, against the order dated 15.05.2015 passed in ITA No.1044/Mds/2014 on the file of Income Tax Appellate Tribunal, Madras 'C' Bench, Chennai for the Assessment Year 2009-10. For Appellant : Ms.V.Pushpa Stdg. Counsel For Respondent : Mr.A.S.Sriraman * * * * * Page 1 of 4 https://www.mhc.tn.gov.in/judis ( Uploaded on: 03/07/2025 12:21:23 pm ) T.C.A. No.111 of 2016 JUDGMENT (Judgment of the Court was delivered by the Hon'ble Chief Justice) Both counsels are ad idem that the amount involved is only Rs.1,84,10,624/-, which is less than Rs.2 crores threshold given in Circular No.9/2024, for filing/pursuing an appeal in High Court. 2. Ms.Pushpa submitted that the origin of the impugned order is an order passed under Section 263 of the Income Tax Act, 1961 and therefore, would fall under the exceptions given in Circular No.5/2024. 3. We agree with Mr.Sriraman that in this case, exceptions would not fall under the exemptions, though the origin is under Section 263 of the Act, because Clause 3.1(f) of the Circular No.5/2024 starts with the words "Where the tax effect is not quantifiable or not involved..." In the case at hand, the tax effect has been quantified as Rs.1,84,10,624/-. 4. Moreover, though it refers to order passed under Section 263 of the Act, it again says that the reference to cases involving sections referred Page 2 of 4 https://www.mhc.tn.gov.in/judis ( Uploaded on: 03/07/2025 12:21:23 pm ) T.C.A. No.111 of 2016 here, where it is not possible to quantify the tax effect or the tax effect is not involved, is for the purpose of illustration only. Therefore, this exception would not apply where the tax effect is quantifiable and in this case, it has already been quantified. Therefore, this would fall under the 'less than tax effect' cases. 5. Moreover, the Circulars issued under Section 268A of the Act itself provides that it is a step towards management of litigation and the Board has been revising the monetary limits for filing of appeal from time to time. Circular No.5/2024 also states that monetary limits shall be applicable to all cases, including those relating to TDS/TCS under the Act, with the exception where the tax effect is not quantifiable or not involved. Therefore, since in the present case the tax effect is quantified, in our view, it would not be covered under the exception. Appeal is, accordingly, disposed of. No costs. (K.R.SHRIRAM, CJ.) (SUNDER MOHAN, J.) 01.07.2025 Index : Yes/No Page 3 of 4 https://www.mhc.tn.gov.in/judis ( Uploaded on: 03/07/2025 12:21:23 pm ) T.C.A. No.111 of 2016 Neutral Citation : Yes/No sra The Hon'ble Chief Justice and Sunder Mohan, J. (sra) To 1. The Income Tax Appellate Tribunal Madras 'C' Bench, Chennai. 2. The Commissioner of Income Tax, Chennai. T.C.A. No.111 of 2016 01.07.2025 Page 4 of 4 https://www.mhc.tn.gov.in/judis ( Uploaded on: 03/07/2025 12:21:23 pm )

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