THE COMMISSIONER OF INCOME T vs. M/S. MARIS EXPORTS

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TCA/451/2020HC Madras30 August 2022Bench: Hon`ble Mr Justice R. MAHADEVAN4 pages
AI SummaryWithdrawn

What did the High Court hold?

The High Court dismissed the appeal as withdrawn. The dismissal was based on the submission by the Revenue that the tax effect in the appeal was less than the monetary limit stipulated in CBDT Circular No. 17/2019. The Court noted that the substantial questions of law were kept open for determination in an appropriate case. No costs were awarded. The judgment does not provide any findings or reasoning on the substantial questions of law themselves, as the appeal was disposed of on the ground of the tax effect and the circular.

What were the facts?

The Commissioner of Income Tax, Chennai (Revenue) filed a Tax Case Appeal before the High Court of Judicature at Madras, challenging an order dated 28.12.2016 passed by the Income Tax Appellate Tribunal (ITAT), Madras 'D' Bench. The appeal pertained to Assessment Year 2007-08 and was filed against M/s. Maris Exports (Assessee). The High Court admitted the appeal on substantial questions of law on 15.03.2021. During the hearing, the Revenue brought to the court's notice 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?

1. Whether the Tribunal was right in quashing the reassessment proceedings, especially when the Assessing Officer (AO) had not formed any opinion on the issues during the original assessment and there had been an escapement of income? (Question of law and fact, relating to Section 147 of the Income Tax Act, 1961). 2. Whether the reasoning and finding of the Tribunal were proper, particularly in light of Explanation 1 to Section 147, which states that mere production of accounts or evidence from which material could have been discovered by the AO does not necessarily amount to a disclosure within the meaning of the proviso to that Section? (Question of law and fact, relating to Section 147 of the Income Tax Act, 1961). Assessee's arguments: Not recorded in the judgment. Revenue's arguments: The Revenue argued that the reassessment proceedings were validly initiated as there was an escapement of income and the AO had not formed an opinion during the original assessment. The Revenue also relied on Explanation 1 to Section 147 to support its contention regarding disclosure. Subsequently, the Revenue brought to the court's notice CBDT Circular No. 17/2019, stating the tax effect was below the monetary limit for pursuing appeals.

Which sections of the Income-tax Act were involved?

Section 147

AI-generated summary — verify with the full judgment below

TCA.No.451/2020 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 30.08.2022 CORAM

THE HONOURABLE MR. JUSTICE R. MAHADEVAN and THE HONOURABLE MR. JUSTICE MOHAMMED SHAFFIQ T.C.A.No.451 of 2020 The Commissioner of Income Tax, Chennai .. Appellant Versus M/s.Maris Exports 11, Old No.9, Cathedral Road, Gopalapuram, Chennai 600 086 PAN:AAFFM2945P

.. Respondent Tax Case Appeal filed under Section 260-A of the Income Tax Act, 1961 against the order of the Income Tax Appellate Tribunal Madras “D” Bench, dated 28.12.2016 passed in ITA No.3085/Mds/2016 in respect of Assessment Year 2007-08. For Appellant : Mr. T.Ravikumar

For Respondent : Mr.Venkata Narayanan for M/s.Subbaraya Aiyar 1/4 https://www.mhc.tn.gov.in/judis TCA.No.451/2020 JUDGMENT (Judgment of the Court was delivered by R. MAHADEVAN, J.) This Tax Case Appeal has been filed by the appellant / revenue, questioning the correctness of the order dated 28.12.2016 passed by the Income Tax Appellate Tribunal Madras “D” Bench in ITA No.3085/Mds/2016 for the Assessment Year 2007-08. 2. On 15.03.2021, this tax case appeal was admitted by this Court on the following substantial questions of law; ' 1. Whether the Tribunal was right in quashing the reassessment proceeding especially when the AO has not formed any opinion on the issues in which reopening was done while framing the original assessment and there has been escapement of Income? 2. Whether the reasoning and finding of the Tribunal is proper especially when as per Explanation 1 to Section 147 mere production before the AO of the accounts books or other evidences from which material evidence could with due diligence have been discovered by the AO will not necessarily amount to discloser within the meaning of the proviso to that Section?' 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 2/4 https://www.mhc.tn.gov.in/judis TCA.No.451/2020 No.17/2019 dated 08.08.2019 issued by the Central Board Direct Taxes, 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). 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.] 30.08.2022 msr

Index : Yes / No To 1. The Income Tax Officer, Business Ward XV (4),Chennai. 2. The Commissioner of Income Tax (Appeals)-IV, Chennai. 3.The Income Tax Appellate Tribunal Madras “D” Bench, Chennai. 3/4 https://www.mhc.tn.gov.in/judis TCA.No.451/2020 R. MAHADEVAN, J. and MOHAMMED SHAFFIQ, J. msr T.C.A.No.451 of 2020 30.08.2022 4/4 https://www.mhc.tn.gov.in/judis

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