COMMISSIONER OF INCOME TAX vs. M/S COUNCIL FOR LEATHER EXPO

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TCA/337/2016HC Madras20 July 2021Bench: Hon`ble Mr Justice M.DURAISWAMY5 pages
AI SummaryWithdrawn

What did the High Court hold?

The High Court dismissed the appeal as withdrawn on account of low tax effect, as per the submissions made by the Revenue. The Court noted that the appeal was not being pursued due to the monetary limit stipulated in CBDT Circular No. 17/2019. The substantial question of law framed at the time of admission was left open. The Revenue was granted liberty to mention the case for restoration if the tax effect was found to be above the threshold limit fixed in the said Circular, to be heard and decided on merits. No costs were awarded. The Tribunal's order was not adjudicated upon on its merits.

What were the facts?

The Revenue, Commissioner of Income Tax, Chennai, filed an appeal under Section 260A of the Income Tax Act, 1961, against an order of the Income Tax Appellate Tribunal, Chennai, dated June 26, 2015. The appeal pertained to Assessment Year 2010-11 and concerned the assessee, M/s. Council for Leather Exports. The Tribunal had held that the assessee, whose objects were to promote and support the leather business industry, was not for profit but existed for charitable purposes under Section 2(15) of the Act, and was thus entitled to exemption under Section 10(23C)(iv). The Revenue's appeal was admitted on a substantial question of law related to this finding.

What were the issues?

1. Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the assessee, which has objects to promote and support the leather business industry, is not for profit, but to do charity through the advancement of an object of general public utility and the assessee is existing for a charitable purpose as per Section 2(15) of the Act, and consequently, the assessee is entitled for exemption under Section 10(23C)(iv)? Assessee's arguments: Not recorded. Revenue's arguments: The Revenue submitted that the appeal was not being pursued due to the 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 2(15),Section 10(23C)(iv)

AI-generated summary — verify with the full judgment below

T.C.A.No.337 of 2016 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 20.07.2021 CORAM THE HON'BLE MR. JUSTICE M.DURAISWAMY AND THE HON'BLE MRS.JUSTICE R. HEMALATHA T.C.A.No.337 of 2016 Commissioner of Income Tax, Chennai. ... Appellant Vs. M/s.Council for Leather Exports CMDA Tower II 3rd Floor Gandhi Irwin Bridge Road, Egmore, Chennai - 600 008. ... Respondent Appeal preferred under Section 260A of the Income Tax Act, 1961, against the order of the Income Tax Appellate Tribunal, Madras, “A” Bench, dated 26.06.2015 in I.TA.No.1192/Mds/2014, Assessment Year 2010-11. For Appellant : Mr.J.Narayanaswamy Senior Standing Counsel For Respondent : Mr.R.Venkat Narayanan for M/s.Subbaraya Aiyar Padmanabhan Page 1/5 https://www.mhc.tn.gov.in/judis/ T.C.A.No.337 of 2016 JUDGMENT (Judgment was delivered by M.DURAISWAMY, J.) We have heard Mr.J.Narayanaswamy, learned Senior Standing Counsel for the appellant/Revenue and Mr.R.Venkat Narayanan for M/s.Subbaraya Aiyar Padmanabhan, learned counsel for the respondent/assessee. 2.The appeal, filed by the Revenue under Section 260A of the Income Tax Act, 1961 (for short, the Act) is directed against the order dated 26.06.2015 made in I.TA.No.1192/Mds/2014 on the file of the Income Tax Appellate Tribunal, Chennai, “A” Bench (for brevity, the Tribunal) for the Assessment Year 2010-11. 3.The appeal was admitted on the following substantial question of law: “Whether on the facts and in the circumstances of the case, the Tribunal was right in holding that the assessee which has objects to Page 2/5 https://www.mhc.tn.gov.in/judis/ T.C.A.No.337 of 2016 promote and support the leather business industry, is not for profit, but to do charity through advancement of object of general public utility and the assessee is existing for charitable purpose as per Section 2(15) of the Act and consequently, the assessee is entitled for exemption under Section 10(23C)(iv)?” 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 08.08.2019 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 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 as withdrawn on account of the Low Tax Effect. The substantial question of law framed is left open. In the event the tax effect in this case is above the threshold limit fixed in the said Circular, liberty is granted to the Revenue to make a mention to this Court to Page 3/5 https://www.mhc.tn.gov.in/judis/ T.C.A.No.337 of 2016 restore the appeal to be heard and decided on merits. No costs. [M.D., J.] [R.H., J.] 20.07.2021

Index : Yes/No Internet : Yes

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To The Income Tax Appellate Tribunal, Chennai, “A” Bench Page 4/5 https://www.mhc.tn.gov.in/judis/ T.C.A.No.337 of 2016 M.DURAISWAMY, J. and R. HEMALATHA, J. mkn T.C.A.No.337 of 2016 20.07.2021 Page 5/5 https://www.mhc.tn.gov.in/judis/

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