The Principal Commissioner o vs. M/s MCML Train Control Techn

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TCA/173/2022HC Madras04 July 2022Bench: Hon`ble Mr Justice R. MAHADEVAN4 pages
AI SummaryWithdrawn

What did the High Court hold?

The High Court did not decide the substantial questions of law on merits. Instead, the learned counsel for the appellant/Revenue brought to the court's notice CBDT Circular No. 17/2019, which 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/-. It was submitted that the tax effect in the present appeal was less than this threshold limit. Consequently, the High Court dismissed the appeal as withdrawn, in light of the submissions made by the Revenue regarding the tax effect being below the monetary limit. The substantial questions of law were kept open for determination in an appropriate case. No costs were awarded.

What were the facts?

The Revenue, represented by the Principal Commissioner of Income Tax, Corporate Circle-4(1), Chennai, filed an appeal under Section 260A of the Income Tax Act, 1961, against an order dated 11.01.2018 passed by the Income Tax Appellate Tribunal, Chennai, 'C' Bench. The appeal pertained to assessment year 2010-11 and challenged the Tribunal's decision regarding the assessee, M/s. MCML Train Control Technologies Pvt. Ltd. The dispute involved the assessee's claim of expenditure in the nature of depreciation and the subsequent imposition of penalty under Section 271(1)(c) of the Act. The tax effect in this appeal was stated to be less than the threshold limit prescribed by CBDT Circular No. 17/2019.

What were the issues?

The Tribunal had to decide the following substantial questions of law: 1. Whether the Tribunal was right in holding that the assessee had not filed any inaccurate particulars despite making a wrong claim of expenditure in the nature of depreciation, thereby impacting the applicability of penalty provisions. 2. Whether the Tribunal was correct in dismissing the Department's appeal when the assessee had accepted the addition made towards the wrong claim of depreciation. 3. Whether any intentional action by the assessee could be categorized as a bonafide mistake, exempting it from penalty under Section 271(1)(c) of the Income Tax Act. The Revenue contended that the assessee had made a wrong claim of expenditure in the nature of depreciation and filed inaccurate particulars. The Revenue argued that the Tribunal erred in dismissing their appeal, especially since the assessee had accepted the addition. The Revenue also questioned whether an intentional action could be treated as a bonafide mistake for penalty purposes. The judgment does not record specific arguments from the assessee's side regarding these issues, nor does it name any specific authorities, circulars, or precedents relied upon by either side in the context of these questions.

Which sections of the Income-tax Act were involved?

Section 260A,Section 271(1)(c)

AI-generated summary — verify with the full judgment below

T.C.A.No.173 of 2022 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 04.07.2022 CORAM : THE HON'BLE MR. JUSTICE R. MAHADEVAN AND THE HON'BLE MR. JUSTICE MOHAMMED SHAFFIQ T.C.A.No.173 of 2022 The Principal Commissioner of Income Tax, Corporate Circle-4(1), Chennai – 34. ... Appellant Versus M/s.MCML Train Control Technologies Pvt.Ltd., No.C-9, Industrial Estate, Yelahanka, Bengalure – 560 064. PAN: AAFCM 3804Q ... Respondent Appeal preferred under Section 260A of the Income Tax Act, 1961, against the order of the Income Tax Appellate Tribunal, Chennai, “C” Bench, dated 11.01.2018 in I.TA.No.14/Mds/2017. For Appellant : Mr.Rajesh For Mr.Karthik Ranganathan Page 1/4 https://www.mhc.tn.gov.in/judis T.C.A.No.173 of 2022 J U D G M E N T (Judgment was delivered by R.MAHADEVAN, J.) This tax case appeal has been filed by the appellant / Revenue, challenging the order dated 11.01.2018 passed by the Income Tax Appellate Tribunal, Bench 'C', Madras, in I.T.A.No.14/Mds/2017, relating to the assessment year 2010-11, by raising the following substantial questions of law:- (i) Whether on the facts and circumstances of the case and in law, the Income Tax Appellate Tribunal is right in holding that the asessee has not filed any inaccurate particulars even though the assessee has made wrong claim of expenditure in the nature of depreciation? (ii) Whether on the facts and circumstances of the case and in law, the Income Tax Appellate Tribunal is right in law in dismissing the appeal filed by the Department though the assessee has accepted the addition made towards wrong claim of depreciation? (iii) Whether any intentional action of the assessee be brought under the umbrella of bonafide mistake and be done away with the provisions of penalty under Section 271 (1)(c) of the IT Act?” Page 2/4 https://www.mhc.tn.gov.in/judis T.C.A.No.173 of 2022 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 appeal 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. 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 questions of law for determination in an appropriate case. No costs. (R.M.D., J.) (M.S.Q., J.) 04.07.2022 r n s

Internet : Yes.

Index : Yes / No. R. MAHADEVAN, J. Page 3/4 https://www.mhc.tn.gov.in/judis T.C.A.No.173 of 2022 and MOHAMMED SHAFFIQ, J. r n s To 1. The Deputy Commissioner of Income Tax, Company Circle IV (1), Chennai, 121, Mahatma Gandhi Salai, Chennai. 2. The Commissioner of Income Tax, Room No.222, Aayakar Bhavan, Mail Building, 121, Mahatma Gandhi Road, Nungambakkam. 3. The Income Tax Appellate Tribunal 'C' Bench, Chennai. T.C.A.No.173 of 2022 04.07.2022 Page 4/4 https://www.mhc.tn.gov.in/judis

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