THE COMMISSIONER OF INCOME vs. M/S.COGNIZANT TECHNOLOGY

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TCA/191/2017HC Madras12 March 2020Bench: Hon`ble Dr Justice VINEET KOTHARI4 pages
AI SummaryDismissed

What did the High Court hold?

The High Court noted the Circular instruction issued by the Central Board of Direct Taxes (CBDT) vide Circular No. 17/2019 dated August 8, 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/-. In the present case, the tax effect was stated to be less than this monetary limit. Consequently, the High Court dismissed the appeal filed by the Revenue as not pressed. The substantial questions of law were kept open for determination in an appropriate case. No decision was made on the merits of the substantial questions of law raised.

What were the facts?

The Commissioner of Income Tax, Chennai (Revenue) filed a Tax Case Appeal under Section 260A of the Income Tax Act, 1961, challenging an order passed by the Income Tax Appellate Tribunal (ITAT), 'A' Bench, Chennai, dated July 9, 2015. The appeal was filed against M/s. Cognizant Technology Solutions India Pvt Ltd. (Assessee). The procedural history leading to the ITAT's order is not detailed in the provided judgment. The Revenue's appeal to the High Court was based on several substantial questions of law concerning the ITAT's decision.

What were the issues?

The Tribunal had to decide the following substantial questions of law: 1. Whether the ITAT was right in recalling its order dated April 18, 2013, and restoring the original order without listing the case for hearing on merits. 2. Whether the ITAT was justified in restoring dismissal orders dated August 20, 2007, and January 21, 2008, when the issue of approval by the Committee on Dispute was no longer relevant due to the constitutional bench judgment in the case of Electronics Corporation of India Ltd. 3. Whether the ITAT was right in holding that only travel expenditure for the benefit of the employee constitutes Fringe Benefit Tax (FBT) when there is no such stipulation under Section 115WB(2). 4. Whether the ITAT's finding that interest under Section 115WJ(3) is not leviable on advance FBT on ESOP is proper. 5. Whether the ITAT's finding on the levy of interest under Section 115WJ(3) is proper, given the Apex Court's holding that such interest is mandatory. Arguments: The Revenue raised these substantial questions of law. The judgment does not record specific arguments made by the Assessee or the Revenue on each issue, other than the Revenue's reliance on the Circular No. 17/2019.

Which sections of the Income-tax Act were involved?

Section 260A,Section 115WB(2),Section 115WJ(3)

AI-generated summary — verify with the full judgment below

Judgment in TCA No.191 of 2017 dated 12.03.2020 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 12.03.2020 CORAM THE HON'BLE DR.JUSTICE VINEET KOTHARI AND THE HON'BLE MR.JUSTICE R.SURESH KUMAR Tax Case (Appeal) No.191 of 2017 The Commissioner of Income Tax Chennai. ... Appellant Vs. M/s.Cognizant Technology Solutions India Pvt Ltd., 5/535, Okkiam, Old Mahabalipuram Road, Thoraipakkam, Chennai 600 096. ... Respondent ----- Tax Case Appeal filed under Section 260A of the Income Tax Act, 1961 against the order of the Income Tax Appellate Tribunal 'A' Bench, Chennai dated 09.07.2015 in ITA.25/Mds/2015. For Appellant : Mr.T.Ravi Kumar, Senior Standing Counsel

For Respondent : Mr.N.V.Balaji J U D G M E N T (Judgment of the Court was delivered by DR.VINEET KOTHARI,J) This Tax Case Appeal has been filed by the Revenue calling in question the correctness of the order passed by the Income Tax Appellate Tribunal, 'A' Page 1 of 4 http://www.judis.nic.in Judgment in TCA No.191 of 2017 dated 12.03.2020 Bench, Chennai, by raising the following substantial questions of law: "1.Whether on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal was right in recalling its order dated 18.04.2013 whereby the original order of the Tribunal was restored without even listing the case for hearing on merits? 2. Whether the Tribunal was justified in restoring the orders of the dismissal dated 20.08.2007 and 21.01.2008 wherein issue of approval by the Committee on Dispute was no longer relevant in view of the constitutional Bench judgment in the case of Electronics Corporation of India Ltd? 3. Whether on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal was right in holding that only travel expenditure for the benefit of employee constitutes Fringe Benefit when there is no such stipulation u/s.115WB(2)? 4. Whether the finding of the Tribunal is proper by holding that interest u/s.115WJ(3) is not leviable on advance FBT on ESOP? 5. Whether the finding of the Tribunal is proper on the question of levy of interest u/s.115WJ(3) wherein the Apex Court has held that levy of such interest is mandatory?” 2. When the matter was taken up for hearing, the learned Standing Page 2 of 4 http://www.judis.nic.in Judgment in TCA No.191 of 2017 dated 12.03.2020 Counsel brought to our notice the Circular instruction issued by the Central Board of Direct Taxes vide Circular No.17/2019 dated 8th August 2019, 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). 3. In the instant case, the tax effect is said to be less than the monetary limit imposed and therefore, the appeal filed by the Revenue is dismissed as not pressed, keeping open the substantial questions of law for determination in an appropriate case. (V.K.,J.) (R.S.K.,J.) 12.03.2020 KST To Income Tax Appellate Tribunal 'A' Bench,Chennai. Page 3 of 4 http://www.judis.nic.in Judgment in TCA No.191 of 2017 dated 12.03.2020 DR.VINEET KOTHARI, J. AND R.SURESH KUMAR, J. KST T.C.(A) No.191 of 2017 12.03.2020 Page 4 of 4 http://www.judis.nic.in

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