THE COMMISSIONER OF INCOME T vs. K.SREEJITH

TCA.No.47 of 2021 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 01.2.2021 CORAM THE HONOURABLE MR.JUSTICE T.S.SIVAGNANAM and THE HONOURABLE MS.JUSTICE R.N.MANJULA Tax Case Appeal No.47 of 2021

The Commissioner of Income Tax, Chennai-34 ...Appellant Vs Shri K.Sreejith ...Respondent APPEAL under Section 260A of the Income Tax Act, 1961 against the order dated 30.3.2017 passed by the Income Tax Appellate Tribunal, Madras 'A' Bench, Chennai made in I.T.A.No.2926/Mds/2016 for the assessment year 2012-13. For Appellant: Mrs.R.Hemalatha, SSC For Respondent : Mr.A.S.Sriraman Judgment was delivered by

T.S.SIVAGNANAM

This appeal has been filed by the Revenue under Section 260A of the Income Tax Act, 1961 ('the Act' for brevity) challenging the order dated 30.3.2017 made in I.T.A.No.2926/Mds/2016 on the file of the 1/4 https://www.mhc.tn.gov.in/judis/ TCA.No.47 of 2021 Income Tax Appellate Tribunal, Chennai, 'A' Bench ('the Tribunal' for brevity) for the assessment year 2012-13. 2. The Revenue has filed this appeal by raising the following substantial questions of law: “1. Whether the Tribunal ought to have followed the decision of the Apex Court in the case of Palam Gas Agency Ltd., passed in Civil Appeal No.5512 of 2017 dated 03.5.2017 wherein it was held that failure to deduct tax at source would result in disallowance under Section 40(a)(ia) in respect of the sum paid or payable ? 2. Whether the disallowance made under Section 40(a)(ia) is attracted both for expenditure which had been paid during the year and also which is still payable at the end of the year or is it attracted only in respect of such expenditure claimed on which TDS has not been deducted and the amount in respect thereof stands payable as at the end of the year ? and 3. Whether, on the facts and circumstances of the case, the Tribunal was right in holding that the disallowance made under Section 40(a)(ia) is not proper ?” 2/4 https://www.mhc.tn.gov.in/judis/ TCA.No.47 of 2021 3. We have heard Mrs.R.Hemalatha, learned Senior Standing Counsel appearing for the appellant/Revenue and Mr.A.S.Sriraman, learned counsel accepting notice for the respondent/assessee. 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. 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 raised 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 file a petition before this Court to restore the appeal to be heard and decided on merits. No costs. 01.2.2021 To The Income Tax Appellate Tribunal, 'A' Bench, Chennai. RS 3/4 https://www.mhc.tn.gov.in/judis/ TCA.No.47 of 2021 T.S.SIVAGNANAM,J AND R.N.MANJULA,J RS TCA.No.47 of 2021 01.2.2021 4/4 https://www.mhc.tn.gov.in/judis/