THE PRINCIPAL COMMISSIONER O vs. PANASONIC INDIA PVT LTD

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TCA/35/2022HC Madras03 February 2022Bench: Hon`ble Mr Justice R. MAHADEVAN4 pages
AI SummaryWithdrawn

What did the High Court hold?

The High Court noted that the Revenue itself brought to its notice CBDT Circular No. 17/2019, which 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/-. The Revenue further submitted that the tax effect in the present appeal was below this threshold. In light of this submission by the appellant/Revenue, the High Court dismissed the appeal as withdrawn. The Court explicitly stated that the substantial questions of law were left open for determination in an appropriate case. No costs were awarded.

What were the facts?

The appeal was filed by the Principal Commissioner of Income Tax (Revenue) against an order dated 30.11.2016 passed by the Income Tax Appellate Tribunal (ITAT), Chennai, 'D' Bench. The ITAT's order pertained to assessment year 2007-08 and concerned a penalty levied under Section 271(1)(c) of the Income Tax Act, 1961. The assessee is M/s. Panasonic India Pvt. Ltd. The appeal was preferred under Section 260-A of the Income Tax Act, 1961. During the hearing, the Revenue brought to the court's notice 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/-. The Revenue submitted that the tax effect in this appeal was below this threshold.

What were the issues?

1. Whether the Tribunal was justified in placing the onus on the Revenue to demonstrate the absence of good faith and due diligence by the Assessee when deleting the penalty imposed under Section 271(1)(c)? (Question of law) 2. Whether, as per Explanation (vii) to Section 271(1)(c), the burden of proof lies with the Assessee or the Department to establish that the price charged/paid was computed in accordance with Section 92C in good faith and with due diligence? (Question of mixed law and fact) Assessee's arguments: Not recorded in the judgment. Revenue's arguments: The Revenue contended that the tax effect in the appeal was less than the monetary limit stipulated in CBDT Circular No. 17/2019 for filing/pursuing appeals before the High Court.

Which sections of the Income-tax Act were involved?

Section 271(1)(c),Section 92C,Section 260-A

AI-generated summary — verify with the full judgment below

T.C.A. No. 35 of 2022 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 03.02.2022 CORAM : THE HONOURABLE MR. JUSTICE R. MAHADEVAN AND THE HONOURABLE MR. JUSTICE MOHAMMED SHAFFIQ Tax Case Appeal No. 35 of 2022 The Principal Commissioner of Income Tax HSIIDC Building, Vanijaya Nikunj Udyog Vihar, Phase-V Gurgaon (Haryana) ... Appellant Vs. M/s.Panasonic India Pvt. Ltd. Spic Building Annexe No.6th Floor, 88 Mount Road Guindy, Chennai – 600 032. ... Respondent PAN : AADCP 9391 B Appeal preferred under Section 260-A of the Income Tax Act, 1961, against the order of the Income Tax Appellate Tribunal, Chennai, ''D'' Bench, dated 30.11.2016 in I.TA.No.479/Mds/2016. Page 1/4 https://www.mhc.tn.gov.in/judis T.C.A. No. 35 of 2022 For Appellant : Mr. T.Ravikumar Senior Standing Counsel For Respondent : Mrs. L.Maithili J U D G M E N T (Judgment was delivered by R.MAHADEVAN, J.) This tax case appeal has been filed by the appellant / Revenue, challenging the order dated 30.11.2016 passed by the Income Tax Appellate Tribunal, Bench 'D', Chennai, in I.T.A. No. 479 / Mds / 2016, relating to the assessment year 2007-08, by raising the following substantial questions of law:- “1. Whether the Tribunal was justified in putting the onus on the Revenue to show the absence of good faith and due diligence on the part of the Assessee while deleting the penalty levied under Section 271 (1) (c)? 2. Whether as per Explanation (vii) to Section 271(1)(c) the onus is on the Assessee or the department to prove that the price charged /paid was computed in accordance with the provisions contained in Section 92C is in good faith and due diligence ?" Page 2/4 https://www.mhc.tn.gov.in/judis T.C.A. No. 35 of 2022 2.When the matter was taken up for consideration, the learned counsel for the appellant / Revenue brought to the notice of this court the Circular No.17/2019 dated 08.08.2019 issued by the Central Board Direct Taxes, wherein, it is stipulated that appeal 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). It is also submitted that the tax effect in this appeal is less than the threshold limit. 3.In the light of the aforesaid submissions made by the learned counsel for the appellant / Revenue, the present appeal, wherein, the tax effect is said to be less than the monetary limit imposed, is dismissed as withdrawn, keeping open the substantial question of law for determination in an appropriate case. No costs. [R.M.D., J.] [M.S.Q., J.] 03.02.2022 Maya

Internet : Yes

Index : Yes / No Page 3/4 https://www.mhc.tn.gov.in/judis T.C.A. No. 35 of 2022 R. MAHADEVAN, J. and MOHAMMED SHAFFIQ, J. Maya To 1. The Principal Commissioner of Income Tax HSIIDC Building, Vanijaya Nikunj Udyog Vihar, Phase-V Gurgaon (Haryana). 2.The Income Tax Appellate Tribunal, Chennai, “D” Bench. T.C.A.No.35 of 2022

Dated : 03.02.2022 Page 4/4 https://www.mhc.tn.gov.in/judis

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