PRINCIPAL COMMISSIONER OF IN vs. M/S.HIDESIGN INDIA PVT. LTD.,

TCA.No.28 of 2021 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 07.1.2021 CORAM THE HONOURABLE MR.JUSTICE T.S.SIVAGNANAM and THE HONOURABLE MS.JUSTICE R.N.MANJULA Tax Case Appeal No.28 of 2021

The Principal Commissioner of Income Tax, Corporate Circle 2(2), Chennai-34 ...Appellant Vs M/s.Hidesign India Pvt. Ltd., Chennai-20 ...Respondent APPEAL under Section 260A of the Income Tax Act, 1961 against the order dated 31.1.2018 passed by the Income Tax Appellate Tribunal, Madras 'A' Bench, Chennai made in I.T.A.No.2496/Mds/2017 for the assessment year 2013-14. For Appellant: Mr.Karthik Ranganathan, SC assisted by Mr.S.Rajesh, JSC Judgment was delivered by

T.S.SIVAGNANAM

This appeal has been filed by the Revenue under Section 260A of the Income Tax Act, 1961 ('the Act' for brevity) challenging the order 1/4 https://www.mhc.tn.gov.in/judis/ TCA.No.28 of 2021 dated 31.1.2018 made in I.T.A.No.2496/Mds/2017 on the file of the Income Tax Appellate Tribunal, Chennai, 'A' Bench ('the Tribunal' for brevity) for the assessment year 2013-14. 2. The Revenue has filed this appeal by raising the following substantial questions of law: “1. Whether, on the facts and circumstances of the case and in law, the Tribunal was correct and justified in holding that the assessee's belated remittance of PF & ESI as per relevant Act, but before the due date of filing of IT return in accordance with the IT Act, which is in contravention of provisions of Section 36(1)(va) of the IT Act ? 2. Whether, on the facts and circumstances of the case and in law, the Tribunal was correct in applying the decision of M/s.Industrial Security & Intelligence India Private Limited without considering circular No. 22/2015 dated 17.12.2015 which clearly states that only the remittance of employer's contribution to PF/ESI by the assessee as an employer on or before the due date of filing the return of income under Section 139(1) of the Act would be allowable as per provisions under Section 43B of the Act, further it clarified that it is not applicable to cases which 2/4 https://www.mhc.tn.gov.in/judis/ TCA.No.28 of 2021 are governed by Section 36(1)(va) of the Act ? 3. Whether, on the facts and circumstances of the case and in law, the Tribunal was correct in deleting the addition made under Section 14A of the Act by holding that there cannot be any disallowance under Section 14A when there is no exempted income, when the provisions of the said Section as well as Rule 8D does not provide for any such exception ? And 4. Whether, on the facts and in the circumstances of the case and in law, the Tribinal was correct in not appreciating the CBDT circular No.5/2014 wherein it is clarified that disallowance under Section 14A read with Rule 8D has to be made even if the taxpayer in a particular year not earned any exempt income?” 3. We have heard Mr.Karthik Ranganathan, learned Standing Counsel assisted by Mr.S.Rajesh, learned Junior Standing Counsel appearing for the appellant/Revenue. 4. The learned 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 3/4 https://www.mhc.tn.gov.in/judis/ TCA.No.28 of 2021 T.S.SIVAGNANAM,J AND R.N.MANJULA,J RS limit for filing or pursuing an appeal before the High Court has been increased to Rs.1 Crore. It 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 questions of law raised are 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 file a petition before this Court to restore the appeal to be heard and decided on merits. 07.1.2021 To The Income Tax Appellate Tribunal, 'A' Bench, Chennai. TCA.No.28 of 2021 4/4 https://www.mhc.tn.gov.in/judis/