PRINCIPAL COMMISSIONER OF vs. SMT. SAROJ SINGHANIA,

TCA/295/2017HC Madras13 March 2020Bench: Hon`ble Dr Justice VINEET KOTHARI4 pages

AI SummaryDismissed

What did the High Court hold?

The High Court noted that the Revenue's Standing Counsel brought to its attention CBDT Circular No.17/2019. This circular mandates 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 appeal filed by the Revenue was dismissed as not pressed. The Court explicitly stated that 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 by the Revenue.

What were the facts?

The Revenue, represented by the Principal Commissioner of Income Tax, Coimbatore, filed an appeal under Section 260A of the Income Tax Act, 1961, against an order of the Income Tax Appellate Tribunal (ITAT), Madras 'C' Bench, dated 30.11.2016. The appeal concerned the assessment year(s) not explicitly stated but related to the ITAT's decision in ITA No.396/Mds/2016. The dispute revolved around whether the profit on the sale of land should be treated as agricultural income or business income. The assessee is Smt. Saroj Singhania. The Revenue's appeal was listed for hearing before the High Court of Judicature at Madras. The respondent, Smt. Saroj Singhania, did not appear.

What were the issues?

The Tribunal had to decide the following substantial questions of law: 1. Whether the land in question is agricultural land, despite no recent agricultural activities and sale for windfall profit? 2. Whether, for profit on land sale to be business income, the land must have been developed into layouts or divided into plots before sale? 3. Whether the land is agricultural land, considering the surrounding areas have developed with industries and educational institutions? The Revenue contended that the land was not agricultural and the profit was business income. The assessee's arguments are not recorded as there was no appearance. The Revenue relied on CBDT Circular No.17/2019, which stipulates that appeals shall not be filed or pursued if the tax effect does not exceed Rs.1,00,00,000/-.

Which sections of the Income-tax Act were involved?

Section 260A

AI-generated summary — verify with the full judgment below

Order in Tax Case (Appeal) No.295 of 2017 dated 13.03.2020 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 13.03.2020 CORAM THE HON'BLE DR.JUSTICE VINEET KOTHARI AND THE HON'BLE MR.JUSTICE R.SURESH KUMAR Tax Case (Appeal) No.295 of 2017 Principal Commissioner of Income Tax 2, No.63, Race Course Road, Coimbatore ... Appellant Vs. Smt. Saroj Singhania, No.170-A (38), Gandhi Nagar, Sundarapuram, Coimbatore 641 024 ... Respondent Tax Case Appeal filed under Section 260A of the Income Tax Act, 1961 against the order of the Income Tax Appellate Tribunal, Madras 'C' Bench, dated 30.11.2016 in ITA No.396/Mds/2016. ----- For Appellant : M/s.K.G.Usha Rani Senior Standing Counsel

For Respondent : 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 Page 1 of 4 http://www.judis.nic.in Order in Tax Case (Appeal) No.295 of 2017 dated 13.03.2020 the correctness of the order passed by the Income Tax Appellate Tribunal, Madras 'C' Bench, by raising the following substantial questions of law: "1. Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in holding that the land in question is agricultural land when no agricultural activities were carried out there in the recent years and the land was sold for windfall profit? 2. Whether on the facts and circumstances of the case, the Tribunal was right in holding that in order to treat the profit on sale of land as business income, the land should have been developed into layouts or divided into plots before sale? 3. Whether on the facts and circumstances of the case, the Hon'ble Tribunal was right holding that the land in question is agricultural land though the surrounding/adjoining areas have developed with the functioning of industries and educational institutions?' 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). Page 2 of 4 http://www.judis.nic.in Order in Tax Case (Appeal) No.295 of 2017 dated 13.03.2020 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.) 13.03.2020 msr To Income Tax Appellate Tribunal 'D' Bench,Chennai. Note: Though the name of the counsel for the respondent has been shown in the cause list, as there is no appearance a copy of the order may be sent to learned counsel for the respondent. Page 3 of 4 http://www.judis.nic.in Order in Tax Case (Appeal) No.295 of 2017 dated 13.03.2020 DR.VINEET KOTHARI, J. AND R.SURESH KUMAR, J. msr T.C.(A) No.295 of 2017 13.03.2020 Page 4 of 4 http://www.judis.nic.in

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