COMMISSIONER OF INCOME TAX vs. M/S. INDO ASIA ENERGY PRIVATE

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TCA/209/2016HC Madras17 March 2020Bench: Hon`ble Dr Justice VINEET KOTHARI4 pages
AI SummaryDismissed

What did the High Court hold?

The High Court noted that the learned Standing Counsel for the Revenue brought to its notice Circular No.17/2019 dated 8th August 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 in cases where the tax effect does not exceed Rs.1,00,00,000/- (Rupees One Crore). 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.

What were the facts?

The Revenue, Commissioner of Income Tax-II, Chennai, filed a Tax Case Appeal under Section 260A of the Income Tax Act, 1961, against the order of the Income Tax Appellate Tribunal ('C' Bench, Chennai) dated 11.11.2014 in ITA No.1986/Mds/2014. The appeal was filed against M/s. Indo Asia Energy Private Ltd. The appeal challenged the Tribunal's decision to delete the disallowance made under Section 40(a)(ia) of the Income Tax Act, 1961, and its finding regarding the retrospective application of the Finance Act, 2010 amendment to Section 40(a)(ia). The respondent assessee did not appear for the hearing.

What were the issues?

1. Whether, on the facts and circumstances of the case, the Tribunal was right in deleting that Section 40(a)(ia) is applicable only on those amounts 'payable' and not those amounts 'paid' during the year without deducting tax at source? (Question of law) 2. Whether, under the facts and circumstances of the case, the Income Tax Appellate Tribunal was right in holding that the amendment in Finance Act, 2010 to Section 40(a)(ia) is applied retrospectively? (Question of law) The Revenue contended that the Tribunal erred in its interpretation of Section 40(a)(ia) and the retrospective applicability of the Finance Act, 2010 amendment. The judgment does not record any specific arguments made by the assessee.

Which sections of the Income-tax Act were involved?

Section 260A,Section 40(a)(ia)

AI-generated summary — verify with the full judgment below

Order in TCA No.209 of 2016 (CIT -Vs- M/s.Indo Asia Energy Pvt Ltd) dated 17.03.2020 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 17.03.2020 CORAM THE HON'BLE DR.JUSTICE VINEET KOTHARI AND THE HON'BLE MR.JUSTICE R.SURESH KUMAR Tax Case (Appeal) No.209 of 2016 The Commissioner of Income Tax-II Central IV, Chennai ... Appellant Vs. M/s.Indo Asia Energy Private Ltd., No.14, Padmanabhan Street T.Nagar, Chennai 600 017 PAN : AAB CI 3998 R .. Respondent Tax Case Appeal filed under Section 260A of the Income Tax Act, 1961 against the common order of the Income Tax Appellate Tribunal 'C' Bench, Chennai dated 11.11.2014 in ITA No.1986/Mds/2014. For Appellant : Mr.V.Rajesh, Jr.Standing Counsel

For Respondent : Notice Served - No Appearance

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, 'C' Page 1 of 4 http://www.judis.nic.in Order in TCA No.209 of 2016 (CIT -Vs- M/s.Indo Asia Energy Pvt Ltd) dated 17.03.2020 Bench, Chennai, by raising the following substantial questions of law: “ (i) Whether on the facts and circumstances of the case, the Tribunal was right in deleting that Section 40(a)(ia) is applicable only on those amounts 'payable' and not those amounts 'paid' during the year without deducting tax at source? And (ii) Whether under the facts and circumstances of the case, the Income Tax Appellate Tribunal was right in holding that the amendment in Finance Act, 2010 to Section 40(a)(ia) is applied retrospectively?"

2.

When the matter was taken up for hearing, the learned Standing 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 cases, 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.) Page 2 of 4 http://www.judis.nic.in Order in TCA No.209 of 2016 (CIT -Vs- M/s.Indo Asia Energy Pvt Ltd) dated 17.03.2020 17.03.2020 KST To Income Tax Appellate Tribunal 'C' Bench,Chennai. Page 3 of 4 http://www.judis.nic.in Order in TCA No.209 of 2016 (CIT -Vs- M/s.Indo Asia Energy Pvt Ltd) dated 17.03.2020 DR.VINEET KOTHARI, J. AND R.SURESH KUMAR, J. KST T.C.(A) No.209 of 2016 17.03.2020 Page 4 of 4 http://www.judis.nic.in

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