THE COMMISSIONER OF INCOME T vs. SHRI. P. SENTHILKUMAR

T.C.A.Nos.362 and 363 of 2021 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 15.07.2021 CORAM THE HON'BLE MR. JUSTICE M.DURAISWAMY AND THE HON'BLE MRS.JUSTICE R. HEMALATHA T.C.A.Nos.362 and 363 of 2021 The Commissioner of Income Tax, Chennai. ... Appellant in all appeals Vs. Shri P. Senthilkumar P-2, HIG, Adyar Apartments Circular Road, Kottur Gardens, Kotturpuram, Chennai – 600 085. ... Respondent in all appeals Tax Case Appeals in T.C.A.Nos.362 and 363 of 2021 preferred under Section 260A of the Income Tax Act, 1961, against the order of the Income Tax Appellate Tribunal, Madras, “B” Bench, dated 23.11.2016 in I.T.A.Nos.1222/Mds/2016 and 1223/Mds/2016, respectively for the Assessment Year 2011-12. Page 1/7 https://www.mhc.tn.gov.in/judis/ T.C.A.Nos.362 and 363 of 2021 For Appellant : Mr.T.Ravi Kumar Senior Standing Counsel in all appeals For Respondent : Mr.T.Vasudevan in all appeals C O M M O N J U D G M E N T (Judgment was delivered by M.DURAISWAMY, J.) We have heard Mr.T.Ravi Kumar, learned Senior Standing Counsel for the appellant/Revenue and Mr.T.Vasudevan, learned counsel for the respondent/assessee. 2.The above appeals, filed by the Revenue under Section 260A of the Income Tax Act, 1961 (for short, the Act), are directed against the order dated 23.11.2016 made in I.T.A.Nos.1222/Mds/2016 and 1223/Mds/2016, on the file of the Income Tax Appellate Tribunal, Madras, “B” Bench (for brevity, the Tribunal) for the Assessment Year 2011-12. Page 2/7 https://www.mhc.tn.gov.in/judis/ T.C.A.Nos.362 and 363 of 2021 3.The appellant/Revenue has raised the following substantial questions of law in the above appeals : T.C.A.No.362 of 2021 : “1.Whether on the facts and in the circumstances of the case, the Tribunal was right in deleting the penalty levied u/s.271B of the Income Tax Act especially when there was a delay in furnishing the Statutory Audit Report and no proper reasons/evidence for the delay was explained by the assessee before the AO? 2.Whether the reasoning and finding of the Tribunal is proper by deleting the penalty levied especially when the assessee had filed the Audit Report belatedly will set wrong precedents and the provisions governing levy of penalty for delay in filing render statutory requirements like Audit Reports etc. will become redundant?” T.C.A.No.363 of 2021 : 1.Whether on the facts and in the circumstances of the case, the Tribunal was correct in granting relief to the Assessee especially when the proper investigation done by Page 3/7 https://www.mhc.tn.gov.in/judis/ T.C.A.Nos.362 and 363 of 2021 the department reveal that the concerns associated with the assessee only exist on paper and the transaction were not genuine? 2.Is not the finding of the Tribunal bad especially when the corresponding payment in the ledger folio of two concerns Shri Rajam Impex and Bhagya Trading Industries clearly indicate the self drawn cheques used and it had been wrongly stated that the funds were transferred from the assessee Bank account to bank account of Bhagya Trading Agencies? 3.Whether the reasoning and finding of the Tribunal is proper especially when as per the sales-tax department records the above two concerns were categorized as resellers as they had issued Form H to the assessee under Central Sales-tax Act which only a Principal would issue and therefore the finding of the Tribunal that they were only agents in palpably wrong? 4.Whether the Tribunal is right in applying Rule 6DD(k) thereby making the provisions of Section 40A(3) which was applicable when the suppliers are found to be principles and not the agents? Page 4/7 https://www.mhc.tn.gov.in/judis/ T.C.A.Nos.362 and 363 of 2021 5.Whether the Tribunal was right in applying Rule 6DD(k) thereby making the provision of Sec.40A(3) inapplicable when the transacted goods are granites which is not covered under Rule 6DD(e) and (f) of the Income Tax Rules?” 4.The learned Senior Standing Counsel for the appellant submits that the above appeals are 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 these cases is less than the threshold limit. 5.In the light of the said submissions, the above Tax Case Appeals are dismissed as withdrawn on account of the Low Tax Effect. The substantial questions of law framed are left open. In the event the tax effect in these cases is above the threshold limit fixed in the said Circular, liberty is granted to the Revenue to make a mention to this Page 5/7 https://www.mhc.tn.gov.in/judis/ T.C.A.Nos.362 and 363 of 2021 Court to restore the above appeals to be heard and decided on merits. No costs. [M.D., J.] [R.H., J.] 15.07.2021 (2/2)

Index : Yes/No Internet : Yes

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To 1.The Income Tax Appellate Tribunal, Madras, “B” Bench. 2.The Commissioner of Income Tax, Chennai. Page 6/7 https://www.mhc.tn.gov.in/judis/ T.C.A.Nos.362 and 363 of 2021 M.DURAISWAMY, J. and R. HEMALATHA, J. mkn T.C.A.Nos.362 and 363 of 2021 15.07.2021 (2/2) Page 7/7 https://www.mhc.tn.gov.in/judis/