PRINICIPAL COMMISSIONER OF I vs. M/S YES AND YES HITECH PREMI

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TCA/20/2020HC Madras13 January 2020Bench: Hon`ble Mr Justice N. KIRUBAKARAN6 pages
AI SummaryDismissed

What did the High Court hold?

The High Court dismissed the Tax Case Appeals filed by the Revenue on the ground of tax effect. The Court referred to Circular No. 17/2019 dated August 8, 2019, which stipulates a monetary limit of Rs. 1 crore for filing appeals before the High Court. Since the tax effect in these appeals was less than Rs. 1 crore, the appeals were dismissed. However, the substantial questions of law framed were left open. The Revenue was granted liberty to mention the case before the Court to restore the appeals for hearing on merits if the tax effect is found to be above the limit fixed in the circular. No costs were awarded. The connected miscellaneous petitions were closed.

What were the facts?

The Revenue (Principal Commissioner of Income Tax 2, Coimbatore) filed these appeals against the order of the Income Tax Appellate Tribunal (ITAT), Chennai 'B' Bench, dated June 19, 2017. The ITAT had allowed the assessee's appeal (ITA.No.22/Mds/2016) and dismissed the Revenue's appeals (ITA.Nos.351 & 3192/Mds/2016). The appeals before the High Court pertained to assessment years 2012-13 and 2013-14. The assessee is M/s. Yes & Yes Hitech Premier Homes India Pvt. Ltd., Erode. The appeals were admitted on substantial questions of law.

What were the issues?

1. Whether the Tribunal is right in nullifying the assessment merely because the AO adopted the income reflected in the Original return of income as a starting point for assessing the true income, despite the AO completing the assessment validly under Section 143(3) after issuing a valid notice under Section 143(2) on the latest revised return of income filed by the assessee? 2. Whether, on the merits of the case, the AO needs to issue notice under Section 143(2) every time an assessee furnishes a revised return of income under Section 139(5) of the Income Tax Act? Assessee's arguments: Not recorded in the judgment. Revenue's arguments: The learned Senior Standing Counsel for the appellant (Revenue) submitted that the tax effect in these cases is less than Rs. 1 crore, which is covered by Circular No. 17/2019 dated August 8, 2019, issued by the CBDT. As per this circular, the monetary limit for filing an appeal before the High Court is Rs. 1 crore. Therefore, these appeals should be dismissed.

Which sections of the Income-tax Act were involved?

Section 260A,Section 143(3),Section 143(2),Section 139(5)

AI-generated summary — verify with the full judgment below

T.C.A.Nos.20 to 22 of 2020 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 13.01.2020 CORAM : THE HONOURABLE MR.JUSTICE N.KIRUBAKARAN and THE HONOURABLE MR.JUSTICE RMT.TEEKAA RAMAN T.C.A.Nos.20 to 22 of 2020 and C.M.P.No.769 & 770 of 2020 Principal Commissioner of Income Tax 2, No.63, Race Course Road, Coimbatore. ... Appellant (in all the appeals) Vs M/s.Yes & Yes Hitech Premier Homes India Pvt. Ltd., 14A, Sathy Road, Erode 638 004. PAN: AAACY 4148 E ... Respondent (in all the appeals) PRAYER : Appeals under Section 260A of the Income Tax Act, 1961 against the order of the Income Tax Appellate Tribunal, Madras “B” Bench, dated 19.06.2017 passed in ITA.Nos.22, 351 & 3192/Mds/2016. For Appellant :Mr.T.R.Senthil Kumar (in all the appeals) Senior standing counsel 1/6 http://www.judis.nic.in T.C.A.Nos.20 to 22 of 2020 C O M M O N J U D G M E N T (Judgment of the Court was delivered by N.KIRUBAKARAN, J) This Tax Case Appeal has been preferred by the Revenue against the order dated 19.06.2017 passed in ITA.Nos.22, 351 & 3192/Mds/2016 on the file of the Income Tax Appellate Tribunal, Chennai 'B' Bench for the assessment year 2012-13 & 2013-14. 2.ITA.No.22/Mds/2016 has been filed by the Assessee and ITA.Nos.351 & 3192/Mds/2016 have been filed by the Revenue. On 19.06.2017, the Appellate Tribunal has accepted the plea of the Assessee and allowed ITA.No.22/Mds/2016 and further, the Appellate Tribunal has rejected the plea of Revenue and dismissed ITA.Nos.351 & 3192/Mds/2016. Against the order of the Appellate Tribunal only, the present appeals have been filed. 3.The Tax Case Appeals are admitted on the following substantial questions of law :

2/6 http://www.judis.nic.in T.C.A.Nos.20 to 22 of 2020 “1.Whether the Tribunal is right in nullifying the assessment merely because the AO adopted the income reflected in the Original return of income as starting point for assessing true income of the assessment despite the facts that the AO completed the assessment validly u/s.143(3) after issuing of valid notice u/s.143(2) on the latest revised return of income filed by the assessment? 2.Whether on the merits of the case, the AO need to issue notice under Section 143(2) every time an assessee furnishes a revised return of income under Section 139(5) of the Income Tax Act?" 4.Mr.T.R.Senthil Kumar, learned Senior Standing Counsel appearing on behalf of the appellant would submit that the tax effect in this case is less than Rs.1 crore and is covered by Circular No.17/2019 dated 08.08.2019 issued by the Director, Central Board of Direct Taxes, Department of Revenue, Ministry of Finance, Government of India, Delhi. As per the said circular, the monetary limit to file an appeal before the High Court is fixed at Rs.1 crore. In these cases, tax effect is less than Rs.1 crore and therefore, the cases have to be dismissed. 3/6 http://www.judis.nic.in T.C.A.Nos.20 to 22 of 2020 5.This Court perused the circular dated 08.08.2019 and Paragraph No.2 of the said Circular, which prescribes monetary limit for filing appeal is usefully extracted as follows: 2.As a step towards further management of litigation, it has been decided by the Board that monetary limits for filing of appeals in income-tax cases be enhanced further through amendment in Para 3 of the Circular mentioned above and accordingly, the table for monetary limits specified in Para 3 of the Circular shall read as follows: S.No. Appeals / SLPs in Income- tax matters Monetary Limit (Rs.) 1. Before Appeallate Tribunal 50,00,000 2. Before High Court 1,00,00,000 3. Before Supreme Court 2,00,00,000 6.In view of the submissions made by the learned counsel appearing on behalf of the appellant and also in view of the Circular No.17/2019 dated 08.08.2019 issued by the Director, Central Board of Direct Taxes, Delhi, the Tax Case Appeals are dismissed on account of tax effect. However, the substantial questions of law framed is left 4/6 http://www.judis.nic.in T.C.A.Nos.20 to 22 of 2020 open. In the event the tax effect is above the limit fixed in the said circular, liberty is granted to the Revenue to make a mention to this Court to restore the appeals to be heard and decided on merits. No costs. Consequently, connected Miscellaneous Petitions are closed. (NKKJ) (PVJ) 13.01.2020 sai To 1.The Principal Commissioner of Income Tax 2, No.63, Race Course Road, Coimbatore. 2.Income Tax Appellate Tribunal 'B' Bench, Chennai. 5/6 http://www.judis.nic.in T.C.A.Nos.20 to 22 of 2020 N.KIRUBAKARAN, J. and P.VELMURUGAN

, J.

sai T.C.A.Nos.20 to 22 of 2020 Dated : 13.01.2020 6/6 http://www.judis.nic.in

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