THE COMMISSIONER vs. MS.SUSHMEETHA

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TCA/450/2016HC Madras30 August 2019Bench: 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. The dismissal was based on the submission made by the Revenue's counsel that the appeal was not being pursued due to a low tax effect, which was below the threshold limit stipulated in CBDT Circular No. 17/2019. The Court noted that the monetary limit for filing or pursuing appeals before the High Court had been increased to Rs. 1 Crore by this circular. Consequently, the substantial questions of law framed at the time of admission were left open. The Revenue was granted liberty to mention the case for restoration if the tax effect was found to be above the threshold limit, to be heard and decided on merits.

What were the facts?

The Revenue, Commissioner of Income Tax, Chennai, filed an appeal under Section 260A of the Income Tax Act, 1961, against an order dated 06.11.2015 passed by the Income Tax Appellate Tribunal (ITAT), Chennai 'C' Bench. The appeal pertained to assessment year 2010-11 and challenged the ITAT's deletion of additions made by the Assessing Officer. The respondent assessee is Ms. Sushmeetha, Chennai. The High Court admitted the appeal on substantial questions of law. The Revenue's counsel 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 appeals to Rs. 1 Crore. The tax effect in this case was below this threshold.

What were the issues?

1. Whether, on the facts and circumstances, the Tribunal was right in holding that the assessee's case falls within the interpretation of Clause (3) of Rule 6DD (a question of law)? 2. Whether, on the facts and circumstances, the Tribunal was right in deleting the additions made when there were no exceptional circumstances for claiming exemption from the applicability of Section 40A(3) (a question of mixed law and fact)? Assessee's Contentions: Not recorded in the judgment. Revenue's Contentions: The Revenue argued that the Tribunal erred in its findings regarding Rule 6DD(3) and Section 40A(3). The Revenue contended that there were no exceptional circumstances justifying the exemption from Section 40A(3) and that the Tribunal's interpretation of Rule 6DD(3) was incorrect. The Revenue's primary submission before the High Court was that the appeal should be dismissed due to low tax effect, citing CBDT Circular No. 17/2019.

Which sections of the Income-tax Act were involved?

Section 260A,Section 40A(3)

AI-generated summary — verify with the full judgment below

TCA.No.450 of 2016 In the High Court of Judicature at Madras Dated : 30.8.2019 Coram : The Honourable Mr.Justice T.S.SIVAGNANAM and The Honourable Mrs.Justice V.BHAVANI SUBBAROYAN Tax Case Appeal No.450 of 2016 The Commissioner of Income Tax, Chennai ...Appellant Vs Ms.Sushmeetha, Chennai-118 ...Respondent APPEAL under Section 260A of the Income Tax Act, 1961 against the order dated 06.11.2015 made in ITA.No.2377/Mds/2014 on the file of the Income Tax Appellate Tribunal, Chennai 'C' Bench for the assessment year 2010-11. For Appellant: Mr.T.Ravikumar, SSC and Mrs.R.Hemalatha, SSC Respondent: served and no appearance Judgment was delivered by

T.S.Sivagnanam,J

We have heard Mr.T.Ravikumar and Mrs.R.Hemalatha, learned Senior Standing Counsel appearing for the appellant – Revenue.

1/4 http://www.judis.nic.in TCA.No.450 of 2016 2. This appeal, filed by the Revenue under Section 260A of the Income Tax Act, 1961 is directed against the order dated 06.11.2015 made in ITA. No.2377/Mds/2014 on the file of the Income Tax Appellate Tribunal, Chennai 'C' Bench for the assessment year 2010-11. 3. The appeal was admitted on 19.7.2016 on the following substantial questions of law : “i. Whether on the facts and circumstances of the case, the Tribunal was right in holding that the assessee's case falls within the interpretation of Clause (3) of Rule 6 DD? and ii. Whether on the facts and circumstances of the case, the Tribunal was right in deleting the additions made when there was no exceptional circumstances for claiming exemption from the applicability of Section 40A(3)?" 4. The learned Senior Standing Counsel for the appellant submits that the above appeal is not pursued by the Revenue on account of the low tax effect in terms of Circular No.17/2019 dated 08.8.2019 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. 2/4 http://www.judis.nic.in TCA.No.450 of 2016 5. In the light of the said submissions, the above tax case appeal is dismissed on account of the low tax effect. The substantial questions of law framed are left open. In the event the tax effect 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.

(T.S.S.J.) (V.B.S.J.) 30.8.2019 Speaking (or) Non Speaking Order Index : Yes (or) No Internet: Yes (or) No To The Income Tax Appellate Tribunal, Chennai 'C' Bench. RS 3/4 http://www.judis.nic.in TCA.No.450 of 2016 T.S.SIVAGNANAM,J AND V.BHAVANI SUBBAROYAN,J RS TCA.No.450 of 2016 30.8.2019 4/4 http://www.judis.nic.in

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