COMMISISIONER OF INCOME TAXX vs. M/S.ENTERPRISING ENTERPRISES

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TCA/385/2019HC Madras23 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. Instead, the Court took note of the submission made by the Revenue's counsel regarding CBDT Circular No. 17/2019. This circular mandates that the Department shall not file or pursue appeals before the High Court in cases where the tax effect does not exceed Rs. 1,00,00,000/-. As the tax effect in the present appeal was stated to be less than this threshold limit, the High Court, in light of the Revenue's submission, dismissed the appeal as withdrawn. The Court explicitly stated that the substantial questions of law were kept open for determination in an appropriate case. No costs were awarded.

What were the facts?

The Revenue, Commissioner of Income Tax, Non Corporate Ward 13(3), Chennai, filed an appeal under Section 260A of the Income Tax Act, 1961, against an order dated 06.02.2019 passed by the Income Tax Appellate Tribunal (ITAT), 'A' Bench, Chennai. The appeal pertained to assessment year 2010-11 and concerned additions made by the Revenue. The High Court admitted the appeal on two substantial questions of law. During the hearing, the Revenue's counsel brought to the court's attention CBDT Circular No. 17/2019 dated 08.08.2019, 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?

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 Income Tax Appellate Tribunal was right in law in holding that Section 4A(3) will not apply to the assessee's case and deleted the additions made? 2. Whether, on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal was right in deleting the addition made under Section 40A(3) when there were no compelling circumstances to make payment in cash by the assessee? Contentions: Assessee: The judgment does not record any specific contentions made by the assessee. Revenue: The Revenue argued that the ITAT erred in deleting the additions made under Section 4A(3) and Section 40A(3). However, during the High Court hearing, the Revenue's counsel relied on CBDT Circular No. 17/2019, stating that the tax effect in the present appeal was less than the prescribed monetary limit of Rs. 1,00,00,000/- for pursuing appeals before the High Court.

Which sections of the Income-tax Act were involved?

Section 260A,Section 4A(3),Section 40A(3)

AI-generated summary — verify with the full judgment below

T.C.A.No.385 of 2019 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 23.08.2022 CORAM : THE HONOURABLE MR. JUSTICE R. MAHADEVAN AND THE HONOURABLE MR. JUSTICE MOHAMMED SHAFFIQ T.C.A.No.385 of 2019 Commissioner of Income Tax Non Corporate Ward 13 (3) Chennai. ... Appellant

Versus M/s. Enterprising Enterprises No.9, 50th Street, Ashok Nagar, Chennai - 600 083. PAN: AAAFE 0195N ... Respondent Appeal preferred under Section 260A of the Income Tax Act, 1961, against the order dated 06.02.2019 passed by the Income Tax Appellate Tribunal, “A” Bench, Chennai, in I.T.A.No.2804/Chny/2018. For Appellant : Mr.M.Swaminathan Senior Standing Counsel Mrs. V.Pushpa, Standing Counsel For Respondent : Mr.M.P.Senthil Kumar Page 1/4 https://www.mhc.tn.gov.in/judis T.C.A.No.385 of 2019

JUDGMENT (Judgment of the Court was delivered by R.MAHADEVAN, J.) This tax case appeal has been filed by the appellant / Revenue, challenging the order dated 06.02.2019 passed by the Income Tax Appellate Tribunal, “A” Bench, Chennai, in I.T.A.No.2804/Chny/2018, relating to the assessment year 2010-11.

2.By order dated 24.06.2019, this court admitted the aforesaid tax case appeal on the following substantial questions of law: “(i) Whether, on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal was right in law in holding that Section 4A(3) will not apply to the assessee's case and deleted the additions made? And (ii) Whether, on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal was right in deleting the addition made under Section 40A(3) when there were no compelling circumstances to make payment in cash by the assessee?" 3.When the matter was taken up for consideration, the learned counsel for the appellant / Revenue brought to the notice of this court the Circular Page 2/4 https://www.mhc.tn.gov.in/judis T.C.A.No.385 of 2019 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. 4.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 questions of law for determination in an appropriate case. No costs. (R.M.D., J.) (M.S.Q., J.) 23.08.2022

Internet : Yes

Index : Yes / No av Page 3/4 https://www.mhc.tn.gov.in/judis T.C.A.No.385 of 2019 R. MAHADEVAN, J. and MOHAMMED SHAFFIQ, J. av To 1. The Income Tax Appellate Tribunal, “A” Bench, Chennai. 2. The Commissioner of Income Tax Non Corporate Ward 13 (3) Chennai. 3. The Commissioner of Income Tax (Appeals)- 14, Chennai. T.C.A.No.385 of 2019 23.08.2022 Page 4/4 https://www.mhc.tn.gov.in/judis

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