PRINCIPAL COMMISSIONER OF IN vs. M/S. OM SHAKTHY AGENCIES (MA

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TCA/380/2020HC Madras24 August 2022Bench: Hon`ble Mr Justice R. MAHADEVAN4 pages
AI SummaryWithdrawn

What did the High Court hold?

The High Court did not decide the substantial questions of law on merits. The learned counsel for 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/-. It was submitted that the tax effect in these appeals was below this threshold limit. Consequently, the High Court dismissed the present appeals as withdrawn, in light of the circular and the tax effect being less than the monetary limit. The substantial questions of law were left open for determination in appropriate cases. No costs were awarded.

What were the facts?

The appeals were filed by the Principal Commissioner of Income Tax, Central-I, Chennai (Revenue) against the common order dated 19.02.2016 passed by the Income Tax Appellate Tribunal (ITAT), Madras 'B' Bench. The appeals pertained to assessment years 2005-06 and 2006-07 and concerned the assessee M/s. Om Shakthy Agencies (Madras) Pvt. Ltd. The ITAT's order was under challenge before the High Court of Judicature at Madras. The Revenue sought to challenge the ITAT's findings regarding the initiation of proceedings under Section 153A of the Income Tax Act, 1961.

What were the issues?

The High Court was to decide the following substantial questions of law: 1. Whether, on the facts and in the circumstances of the case, the ITAT was right in law in holding that the assessing officer cannot initiate proceedings under Section 153A of the IT Act where there was no incriminating material found during the course of search operation under Section 132 of the Act? 2. Whether the ITAT was correct in holding that assessment can be done under Section 153A only based on incriminating material, ignoring the fact that under the new procedure of search assessment, it is the 'total income' that is to be determined and not merely the income relating to search? The Revenue argued that the ITAT erred in its interpretation of Section 153A. The judgment does not record specific arguments from the assessee regarding these issues, but their position would be aligned with the ITAT's order.

Which sections of the Income-tax Act were involved?

Section 153A,Section 132,Section 260A

AI-generated summary — verify with the full judgment below

T.C.A.Nos.380,382,386&387 of 2020 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 24.08.2022 CORAM : THE HONOURABLE MR. JUSTICE R. MAHADEVAN AND THE HONOURABLE MR. JUSTICE MOHAMMED SHAFFIQ T.C.A.Nos.380, 382, 386 & 387 of 2020 The Principal Commissioner of Income Tax Central-I, No.108, Mahatma Gandhi Road, Chennai. ... Appellant in all TCAs Versus M/s.Om Shakthy Agencies (Madras) Pvt. Ltd., T.S.64, SIDCO Industrial Estate, Ekkattuthangal, Chennai. ... Respondent in all TCAs (PAN No.AAA CO 3722 E) Appeals preferred under Section 260A of the Income Tax Act, 1961, against the common order of the Income Tax Appellate Tribunal, Madras “B” Bench, dated 19.02.2016 in I.T.ANos.1999/Mds/2015, 1998/Mds/2015, 1570/Mds/2015 & 1571/Mds/2015. For Appellant in all TCAs' : Mr.J.Narayanaswamy Senior Standing Counsel For Respondent in all TCAs' : Mr.P.J.Rishikesh COMMON JUDGMENT Page 1/4 https://www.mhc.tn.gov.in/judis T.C.A.Nos.380,382,386&387 of 2020 (Judgment of the Court was delivered by R.MAHADEVAN, J.) These tax case appeals have been filed by the appellant / Revenue, challenging the common order dated 19.02.2016 passed by the Income Tax Appellate Tribunal, Madras 'B' Bench I.T.ANos.1999/Mds/2015, 1998/Mds/2015, 1570/Mds/2015 & 1571/Mds/2015, relating to the assessment years 2005-06 & 2006-07, by raising the following substantial questions of law:- “(i) Whether on the facts and in the circumstances of the case, the ITAT was right in law in holding that the assessing officer cannot initiate proceedings under Section 153A of the IT Act, where there was no incriminating material found during the course of search operation under Section 132 of the Act? (ii) Whether the Appellate Tribunal is correct in holding that assessment can be done under Section 153A only based on incriminating material ignoring the fact that under the new procedure of search assessment, it is the "total income" that is to be determined and not merely the income relating to search?" 2.When the matters were 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 Page 2/4 https://www.mhc.tn.gov.in/judis T.C.A.Nos.380,382,386&387 of 2020 exceed Rs.1,00,00,000/- (Rupees One Crore). It is also submitted that the tax effect in these appeals 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 appeals, wherein, the tax effect is said to be less than the monetary limit imposed, are dismissed as withdrawn, keeping open the substantial questions of law for determination in appropriate cases. No costs. (R.M.D., J.) (M.S.Q., J.) 24.08.2022

Internet : Yes

Index : Yes / No r n s Page 3/4 https://www.mhc.tn.gov.in/judis T.C.A.Nos.380,382,386&387 of 2020 R. MAHADEVAN, J. and MOHAMMED SHAFFIQ, J. r n s To 1. The Income Tax Appellate Tribunal, 'B' Bench, Chennai. 2.The Commissioner of Income-Tax, (Appeals)-18, Chennai - 34. 3. The Deputy Commissioner of Income Tax, Central Circle-III (1), Chennai. T.C.A.Nos.380, 382, 386 & 387 of 2020 24.08.2022 Page 4/4 https://www.mhc.tn.gov.in/judis

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