COMMISSIONER OF INCOME vs. M/S. L & T HOUSING FINANCE L

PDF · subscribers
TCA/377/2016HC Madras01 September 2021Bench: Hon`ble Mr Justice T. S. SIVAGNANAM4 pages
AI SummaryDismissed

What did the High Court hold?

The High Court dismissed the appeal filed by the Revenue on the ground of low tax effect, as per CBDT Circular No.17/2019. The Court noted the submission by the Revenue's counsel that the tax effect was less than the increased threshold limit for pursuing appeals before the High Court. Consequently, the appeal was dismissed without deciding the substantial question of law on its merits. The substantial question of law framed at the time of admission was expressly left open. Liberty was granted to the Revenue to seek restoration of the appeal if the tax effect was found to be above the threshold limit, to be heard and decided on merits. No costs were awarded.

What were the facts?

The Revenue, Commissioner of Income Tax IV, filed an appeal under Section 260A of the Income Tax Act, 1961, against an order of the Income Tax Appellate Tribunal (ITAT), Madras 'D' Bench, dated 31.07.2015 in ITA No.328/Mds/2013. The appeal was admitted on 07.06.2016 on a substantial question of law concerning the retrospective application of Rule 8D for the assessment year 2007-08. The assessee is M/s. L&T Housing Finance Ltd. The appeal was admitted on a specific substantial question of law. The Revenue later submitted that it was not pursuing the appeal due to 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.

What were the issues?

1. Whether, on the facts and in the circumstances of the case and in law, the Appellate Tribunal was correct in holding that Rule 8D has no retrospective effect and therefore, it cannot be applied for the assessment year 2007-08 when disallowance under Section 14A shall be made in accordance with the method prescribed under Rule 8D and the provisions of Rule 8D are procedural in nature? (Question of law) Assessee's Contention: The judgment does not record any specific contentions made by the assessee. The appeal was admitted on the substantial question of law as framed. Revenue's Contention: The Revenue submitted that the appeal was not being pursued due to low tax effect, citing CBDT Circular No.17/2019, which increased the monetary limit for filing appeals before the High Court to Rs.1 Crore. The tax effect in this case was below the threshold limit.

Which sections of the Income-tax Act were involved?

Section 260A,Section 14A

AI-generated summary — verify with the full judgment below

T.C.A.No.377 of 2016 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 01.09.2021 CORAM : THE HON'BLE MR. JUSTICE T.S. SIVAGNANAM AND THE HON'BLE MR. JUSTICE SATHI KUMAR SUKUMARA KURUP T.C.A.No.377 of 2016 Commissioner of Income Tax IV, No.121, Nungambakkam High Road, Chennai-600 034.

... Appellant Vs. M/s. L&T Housing Finance Ltd. (formerly knows as Indo Pacific Housing Finance Ltd.) Unit No.205 & 206, 2nd Floor, Capital Towers, Kodambakkam High Road, Nungambakkam, Chennai-600 034. PAN: AAA CW 1328 G ... Respondent Appeal filed under Section 260A of the Income Tax Act, 1961, against the order of the Income Tax Appellate Tribunal, Madras 'D' Bench dated 31.07.2015 in ITA No.328/Mds/2013. For Appellant : Mr.Karthik Ranganathan

Senior Standing Counsel For Respondent : Mr.Sandeep Bagmar J U D G M E N T (Judgment was delivered by T.S. SIVAGNANAM, J.) Page 1/4 http://www.judis.nic.in T.C.A.No.377 of 2016 We have heard Mr.Karthik Ranganathan, learned Senior Standing Counsel for the appellant/Revenue and Mr.Sandeep Bagmar, learned counsel for the respondent/assessee. 2.The appeal, filed under Section 260A of the Income Tax Act, 1961, against the order of the Income Tax Appellate Tribunal, Madras 'D' Bench dated 31.07.2015 in ITA No.328/Mds/2013. 3.The appeal was admitted on 07.06.2016 on the following substantial question of law: “Whether on the facts and in the circumstances of the case and in law, the Appellate Tribunal was correct in holding that Rule 8D has no retrospective effect and therefore, it cannot be applied for the assessment year 2007 - 08 when disallowance under Section 14A shall be made in accordance with the method prescribed under Rule 8D and the provisions of Rule 8D and the provisions of Rule 8D are procedural in nature?" 4.The learned Senior Standing Counsel for the appellant submits that Page 2/4 http://www.judis.nic.in T.C.A.No.377 of 2016 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 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 restore the appeal to be heard and decided on merits. No costs. (T.S.S., J.) (S.S.K., J.) 01.09.2021 Internet : Yes

Index : Yes / No Sgl/mka T.S. SIVAGNANAM, J. and SATHI KUMAR SUKUMARA KURUP, J. Page 3/4 http://www.judis.nic.in T.C.A.No.377 of 2016 Sgl/mka To The Income Tax Appellate Tribunal, Maras, “D” Bench. T.C.A.No.377 of 2016 (1/2) 01.09.2021 Page 4/4 http://www.judis.nic.in

More judgments on Section 14A

All 15,875 judgments and leading authorities on Section 14A →

Recent GST High Court judgments

Search GST case law →