The Commissiooner of Income vs. Tital Industries LTd

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TCA/132/2022HC Madras06 June 2022Bench: Hon`ble Mr Justice R. MAHADEVAN4 pages
AI SummaryWithdrawn

What did the High Court hold?

The High Court noted that the learned counsel for the appellant/Revenue brought to its notice Circular No.17/2019 dated 08.08.2019 issued by the Central Board of Direct Taxes (CBDT). This circular stipulates that appeals shall not be filed or pursued by the Department before the High Court if the tax effect does not exceed Rs.1,00,00,000/- (Rupees One Crore). The Revenue submitted that the tax effect in the present appeal is less than this threshold limit. In light of this submission, the Court dismissed the present appeal as withdrawn, stating that the substantial question of law is kept open for determination in an appropriate case. No costs were awarded.

What were the facts?

The Commissioner of Income Tax, LTU, Chennai (the Revenue) filed a Tax Case Appeal before the High Court of Judicature at Madras, challenging an order dated 03.04.2017 passed by the Income Tax Appellate Tribunal (ITAT), Chennai, in ITA.No.2192/Mds/2016. The appeal concerned M/s. Titan Industries Ltd. (the Assessee). The Revenue's appeal was filed under Section 260A of the Income Tax Act, 1961. The procedural history indicates that the Revenue is questioning the correctness of the ITAT's order.

What were the issues?

1. Whether the Tribunal was correct in directing the Assessing Officer (AO) to disallow only 2% of the exempted income earned by the Assessee, which is without any basis under Section 14A of the Income Tax Act, 1961, as Rule 8D was not applicable to the present assessment year? Contentions: Assessee: Not recorded. Revenue: The Tribunal's direction to disallow only 2% of exempted income is without basis under Section 14A, especially since Rule 8D was not applicable for the assessment year in question. The Revenue relies on the substantial question of law as framed in the appeal.

Which sections of the Income-tax Act were involved?

Section 14A,Section 260A

AI-generated summary — verify with the full judgment below

TCA.No.132 of 2022 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED :06.06.2022 CORAM THE HONOURABLE MR. JUSTICE R. MAHADEVAN AND THE HONOURABLE MR. JUSTICE MOHAMMED SHAFFIQ T.C.A.No.132 of 2022 The Commissioner of Income Tax, LTU, Chennai

.. Appellant Versus M/s. Titan Industries Ltd., 3, Sipcot Industrial Complex, Hosur 635 126.

.. Respondent Tax Case Appeal filed under Section 260 A of the Income Tax Act, 1961 against the order of the Income Tax Appellate Tribunal “D” Bench, Chennai, dated 03.04.2017 in ITA.No.2192/Mds/2016. For Appellant : Mr.T.Ravi Kumar Standing Counsel 1/4 https://www.mhc.tn.gov.in/judis TCA.No.132 of 2022 JUDGMENT (Judgment of the Court was delivered by R. MAHADEVAN, J.) This Tax Case Appeal has been filed by the appellant / revenue, questioning the correctness of the order dated 03.04.2017 passed by the Income Tax Appellate Tribunal “D” Bench, Chennai in ITA.No.2192/Mds/2016, raising the following substantial question of law; ' 1. Whether the Tribunal was correct in directing the AO to disallow only 2% of the exempted income earned by the Assessee which is without any basis under section 14A of Income Tax Act, 1961 as Rule 8D was not applicable to present asst. year?'

2.

When the matter was taken up for consideration, the learned counsel for the appellant / Revenue brought to the notice of this court the Circular No.17/2019 dated 08.08.2019 issued by the Central Board Direct Taxes, wherein, it is stipulated that appeals shall not be filed/pursued by the Department before the High Court in cases where the tax effect does not exceed Rs.1,00,00,000/- (Rupees One Crore). It is also submitted that the tax effect in this appeal is less than the threshold limit. 2/4 https://www.mhc.tn.gov.in/judis TCA.No.132 of 2022 3. In the light of the aforesaid submissions made by the learned counsel for the appellant / Revenue, the present appeal, wherein, the tax effect is said to be less than the monetary limit imposed, is dismissed as withdrawn, keeping open the substantial question of law for determination in an appropriate case. No costs. [R.M.D,J.] [M.S.Q., J.] 06.06.2022 msr

Index : Yes / No To The Income Tax Appellate Tribunal “D” Bench, Chennai 3/4 https://www.mhc.tn.gov.in/judis TCA.No.132 of 2022 R. MAHADEVAN, J. AND MOHAMMED SHAFFIQ, J. msr TCA.No.132 of 2022 06.06.2022 4/4 https://www.mhc.tn.gov.in/judis

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