THE COMMISSIONER vs. M/S PLY TECHNOLOGY SOLUTIONS

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TCA/401/2017HC Madras25 August 2022Bench: Hon`ble Mr Justice R. MAHADEVAN4 pages
AI SummaryWithdrawn

What did the High Court hold?

The High Court, in light of the submission by the Revenue's counsel regarding CBDT Circular No.17/2019, which mandates that appeals shall not be filed or pursued if the tax effect does not exceed Rs. 1,00,00,000/-, noted that the tax effect in the present appeal was less than the stipulated threshold limit. Consequently, the Court dismissed the appeal as withdrawn. The substantial questions of law were kept open for determination in an appropriate case. No costs were awarded. The judgment did not decide the substantial questions of law on their merits.

What were the facts?

The Revenue, Commissioner of Income Tax, Chennai, filed a Tax Case Appeal under Section 260A of the Income Tax Act, 1961, against an order dated 27.07.2016 passed by the Income Tax Appellate Tribunal, 'C' Bench, Chennai. The appeal pertained to assessment year 2011-12 and concerned M/s. Ply Technology Solutions Private Limited. The High Court admitted the appeal on two substantial questions of law. Subsequently, the Revenue's counsel 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?

The High Court had to decide the following substantial questions of law: 1. Whether an assessee is entitled to claim deduction under Section 10B of the Income Tax Act, 1961, as a 100% export-oriented unit, even if it has not obtained approval from the Board appointed by the Central Government under Section 14 of the Industries (Development and Regulation) Act, 1951, and its rules? 2. Whether certification by STPL, instead of approval from the Board appointed by the Central Government under Section 14 of the Industries (Development and Regulation) Act, 1951, and its rules, disentitles a 100% export-oriented unit from claiming deduction under Section 10B of the Income Tax Act, 1961? The Revenue argued that approval from the specified Board was mandatory for Section 10B deduction. The Assessee's contentions are not recorded in the judgment. The judgment does not record any arguments from the assessee.

Which sections of the Income-tax Act were involved?

Section 260A,Section 10B,Section 14

AI-generated summary — verify with the full judgment below

T.C.A.No.401 of 2017 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED 25.08.2022 CORAM THE HON'BLE Mr. JUSTICE R. MAHADEVAN AND THE HON'BLE Mr. JUSTICE MOHAMMED SHAFFIQ Tax Case Appeal No.401 of 2017 The Commissioner of Income Tax Chennai

.. Appellant Vs. M/s.Ply Technology Solutions Private Limited AA-9, New No.83, 2nd Avenue Anna Nagar, Chennai 600 040 PAN : AAFCP1194C .. Respondent Tax Case Appeal filed under Section 260A of the Income Tax Act, 1961 against the order dated 27.07.2016 passed by the Income Tax Appellate Tribunal, 'C' Bench, Chennai, in I.T.A.No.544/Mds/2016. For Appellant : Mr.T.Ravikumar

Senior Standing Counsel For Respondent : Mr.P.M.Subramaniam 1/4 https://www.mhc.tn.gov.in/judis T.C.A.No.401 of 2017 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, calling in question the correctness of the order dated 27.07.2016 passed by the Income Tax Appellate Tribunal, 'C' Bench, Chennai, in I.T.A.No.544/Mds/2016, relating to the assessment year 2011-12. 2. By order dated 08.08.2017, this Court admitted the aforesaid tax case appeal on the following substantial questions of law : “1. Whether an assessee is entitled to claim deduction u/s 10B of the Income Tax Act, 1961, as a 100% export oriented unit, even though it may not have obtained approval from the Board appointed by the Central Government in exercise of power conferred by Section 14 of the Industries (Development and Regulation) Act, 1951 and the rules framed thereunder? 2. Whether certification by STPL instead of approval of the Board appointed by the Central Government in exercise of power conferred by Section 14 of the Industries (Development and Regulation) Act, 1951 and the rules framed thereunder disentitles a 100% export oriented unit from claiming deduction u/s10B of the Income Tax Act, 1961?” 2/4 https://www.mhc.tn.gov.in/judis T.C.A.No.401 of 2017 3. When the matter was taken up for consideration, the learned Standing 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. 4. In the light of the aforesaid submissions made by the learned Standing 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.] 25.08.2022 Internet : Yes gya 3/4 https://www.mhc.tn.gov.in/judis T.C.A.No.401 of 2017 R. MAHADEVAN, J. AND MOHAMMED SHAFFIQ, J. gya To 1.The Assistant Commissioner of Income Tax Company Circle-V(1), Chennai 2.The Principal Commissioner of Income Tax Chennai 5, Chennai 3.The Income Tax Appellate Tribunal 'C' Bench, Chennai Tax Case Appeal No.401 of 2017 25.08.2022

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