THE COMMISSIONER OF INCOME T vs. M/S.TRANS WORLD GARNET INDIA

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TCA/232/2015HC Madras27 August 2019Bench: Hon`ble Mr Justice T. S. SIVAGNANAM4 pages
AI SummaryDismissed

What did the High Court hold?

The High Court dismissed the appeal filed by the Revenue on the ground of low tax effect, as per CBDT Circular No. 17/2019. The learned Senior Standing Counsel for the Revenue submitted that the appeal was not being pursued because the tax effect was less than the increased monetary limit of Rs. 1 Crore for filing appeals before the High Court. Consequently, the substantial question of law framed by the court was left open. The court granted liberty to the Revenue to seek restoration of the appeal if the tax effect was found to be above the threshold limit fixed in the circular, allowing it to be heard and decided on merits. No costs were awarded.

What were the facts?

The Revenue, represented by the Commissioner of Income Tax, Chennai, filed an appeal before the High Court of Judicature at Madras against an order dated 24.10.2013 passed by the Income Tax Appellate Tribunal (ITAT), Chennai 'C' Bench. The appeal pertains to the assessment year 2006-07 and challenges the ITAT's decision to uphold the deletion of penalty imposed under Section 271G of the Income Tax Act, 1961. The penalty was imposed for alleged violation of Section 92D read with Rule 10B(g) of the Income Tax Rules. The assessee is M/s. Transworld Garnet India Pvt. Ltd.

What were the issues?

1. Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in upholding the orders of the CIT(A) who deleted the penalty imposed under Section 271G of the Income Tax Act, especially when the assessee has violated Section 92D read with Rule 10B(g) of the Income Tax Rules? Assessee's Contention: The judgment does not record any specific arguments made by the assessee. The appeal was dismissed on the grounds of low tax effect before any arguments on merits were presented. Revenue's Contention: The Revenue argued that the assessee had violated Section 92D read with Rule 10B(g) of the Income Tax Rules, which warranted the penalty under Section 271G. However, the Revenue later submitted that the appeal was not being pursued due to low tax effect, citing CBDT Circular No. 17/2019 which increased the monetary limit for appeals to the High Court to Rs. 1 Crore. The tax effect in this case was stated to be below this threshold.

Which sections of the Income-tax Act were involved?

Section 260A,Section 271G,Section 92D

AI-generated summary — verify with the full judgment below

TCA.No.232 of 2015 In the High Court of Judicature at Madras Dated : 27.08.2019 Coram : The Honourable Mr.Justice T.S.SIVAGNANAM and The Honourable Mrs.Justice V.BHAVANI SUBBAROYAN Tax Case Appeal No.232 of 2015 The Commissioner of Income Tax, Chennai. ...Appellant Vs M/s.Transworld Garnet India Pvt. Ltd., 34/46, M.G.R. Road, Kalashetra Colony, Besant Nagar, Chennai - 600 090. ...Respondent APPEAL under Section 260A of the Income Tax Act, 1961 against the order dated 24.10.2013 made in ITA.No.1353/MDS/2013 on the file of the Income Tax Appellate Tribunal, Chennai 'C' Bench for the assessment year 2006-07. For Appellant : Mr.M.Swaminathan, SSC and Ms.V.Pushpa, SC For Respondent : Mr.Srinath Sridevan JUDGMENT (Judgment was delivered by T.S.Sivagnanam,J.) We have heard Mr.M.Swaminathan, learned Senior Standing Counsel, and Ms.V.Pushpa, learned Standing Counsel appearing for the appellant/revenue 1/4 http://www.judis.nic.in TCA.No.232 of 2015 and Mr.Srinath Sridevan, learned counsel appearing for the respondent/assessee. 2.This appeal, filed by the Revenue under Section 260A of the Income Tax Act, 1961 is directed against the order dated 24.10.2013 made in ITA.No.1353/MDS/2013 on the file of the Income Tax Appellate Tribunal, Chennai 'C' Bench for the assessment year 2006-07. 3.The appeal was admitted on 02.06.2015 on the following substantial question of law : “Whether on the facts and in the circumstances of the case, the Appellate Tribunal was right in upholding the orders of CIT(A) who deleted the penalty imposed under Section 271G of the Income Tax Act especially when the assessee has violated Section 92D read with Rule 10B(g) of the Income Tax Rules?" 4.The learned Senior Standing Counsel for the appellant submits that the above appeal is not pursued by the Revenue on account of the low tax effect in terms of Circular No.17/2019 dated 08.8.2019 issued by the Central Board of Direct Taxes. By the said Circular, the monetary limit for filing or pursuing an appeal before the High Court has been increased to Rs.1 Crore. It 2/4 http://www.judis.nic.in TCA.No.232 of 2015 is further submitted that the tax effect in this case is less than the threshold limit. 5.In the light of the said submissions, the above tax case appeal is dismissed on account of the low tax effect. The substantial question of law framed is left open. In the event the tax effect is above the threshold limit fixed in the said circular, liberty is granted to the Revenue to make a mention to this Court to restore the appeal to be heard and decided on merits. No costs. (T.S.S.J.) (V.B.S.J.) 27.08.2019 cse Speaking (or) Non Speaking Order Index : Yes (or) No To 1.M/s.Transworld Garnet India Pvt. Ltd., 34/46, M.G.R. Road, Kalashetra Colony, Besant Nagar, Chennai - 600 090. 2.The Income Tax Appellate Tribunal, Chennai 'C' Bench. 3/4 http://www.judis.nic.in TCA.No.232 of 2015 T.S.SIVAGNANAM,J. AND V.BHAVANI SUBBAROYAN,J. cse TCA.No.232 of 2015 27.08.2019 4/4 http://www.judis.nic.in

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