COMMISSIONER OF INCOME TAX vs. M/S.SOUTHERN WIND FARMS

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TCA/416/2015HC Madras17 March 2020Bench: THE HON'BLE DR.JUSTICE VINEET KOTHARI4 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 CBDT Circular No. 17/2019, which mandates that appeals shall not be filed or pursued by the Department before the High Court if the tax effect does not exceed Rs. 1,00,00,000/-. As the tax effect in the present case was stated to be less than this monetary limit, the Revenue's appeal was dismissed as withdrawn. The Court explicitly stated that the substantial questions of law were kept open for determination in appropriate cases. No costs were awarded.

What were the facts?

The Revenue, Commissioner of Income Tax - I, Chennai, filed a Tax Case Appeal (TCA) under Section 260A of the Income Tax Act, 1961, challenging an order dated 28.01.2014 passed by the Income Tax Appellate Tribunal (ITAT), Chennai 'C' Bench, in ITA No.878/Mds/2012. The appeal was filed against M/s Southern Wind Farms Limited. The ITAT's order dealt with disallowance under Section 14A and the allowability of belatedly paid PF and ESI contributions. During the hearing, the Revenue's counsel brought to the Court's attention 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 stated that the tax effect in this case was below this monetary limit.

What were the issues?

The Tribunal had to decide two substantial questions of law: 1. Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in deleting the disallowance made under Section 14A read with Rule 80 on the basis that the assessee did not have any exempt income? 2. Whether, under the facts and in the circumstances of the case, the Income Tax Appellate Tribunal was right in holding that PF and ESI contribution paid belatedly but prior to the due date of filing of return is allowable as deduction? The Revenue contended that the ITAT erred in its findings on both issues. The Assessee's contentions are not recorded in the judgment. The judgment does not mention any specific authorities, circulars, or precedents relied upon by either party for these issues.

Which sections of the Income-tax Act were involved?

Section 260A,Section 14A

AI-generated summary — verify with the full judgment below

Order dated 10.07.2020 in TCA 416 of 2015 [C.I.T –Vs- M/s.Southern Wind Farms Limited] IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 10.07.2020 CORAM THE HON'BLE DR.JUSTICE VINEET KOTHARI AND THE HON'BLE MR.JUSTICE KRISHNAN RAMASAMY T.C.A.No.416 of 2015 Commissioner of Income Tax - I Chennai … Appellant Vs. M/s Southern Wind Farms Limited, 15,Soundara Pandiyan Street, Ashok Nagar, Chennai 600 083. … Respondent Appeal under Section 260A of the Income Tax Act, 1961 against the orderIncome Tax Appellate Tribunal, Chennai ‘C’ Bench dated 28.01.2014 in ITA No.878/Mds/2012. For Appellant : Mr.J.Narayanaswamy, Senior Standing Counsel For Respondent : Mr.Ramana Kumar O R D E R (Order of the Court was made by Dr.Vineet Kothari,J.) The Court was held by Video Conference as per the Resolution of the Full Court dated 03 July 2020, by Judges at the respective residence and the counsel, staff of the Court appearing from their respective residences. 1 / 4 http://www.judis.nic.in Order dated 10.07.2020 in TCA 416 of 2015 [C.I.T –Vs- M/s.Southern Wind Farms Limited] 2. This Tax Case Appeal has been filed by the Revenue, calling in question the correctness of the order passed by the Income Tax Appellate Tribunal, Madras C Bench dated 28.01.2014 in ITA No.878/Mds/2012, by raising the following substantial questions of law: i) Whether on the facts and in the circumstances of the case, the Appellate Tribunal was right in deleting the disallowance made under Section 14A read with Rule 80 on the basis that the assessee did not have any exempt income? ii) Whether under the facts and in the circumstances of the case, the Income Tax Appellate Tribunal was right in holding that PF and ESI contribution paid belatedly but prior to due date of filing of return is allowable as deduction?" 2. When the matter is taken up for hearing, learned Standing Counsel brought to our notice the Circular instruction issued by the Central Board of Direct Taxes vide Circular No.17/2019 dated 8th August 2019, wherein, it is stipulated that appeals 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). 2 / 4 http://www.judis.nic.in Order dated 10.07.2020 in TCA 416 of 2015 [C.I.T –Vs- M/s.Southern Wind Farms Limited]

3.

In the instant case, the tax effect is said to be less than the monetary limit imposed and therefore, the Appeal filed by the Revenue is dismissed as withdrawn, keeping open the substantial questions of law for determination in appropriate cases. No costs.

(V.K.,J.) (K.R., J.).

10.07.2020 KST To

M/s Southern Wind Farms Limited, 15,Soundara Pandiyan Street, Ashok Nagar, Chennai 600 083. 3 / 4 http://www.judis.nic.in Order dated 10.07.2020 in TCA 416 of 2015 [C.I.T –Vs- M/s.Southern Wind Farms Limited] Dr.VINEET KOTHARI, J. and KRISHNAN RAMASAMY, J. KST

T.C.A.No.416 of 2015 10.07.2020 4 / 4 http://www.judis.nic.in

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