PRINCIPAL COMMISSIONER OF vs. M/S.KALLAKURICHI CO-OP SUGAR

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TCA/507/2018HC Madras26 August 2022Bench: Hon`ble Mr Justice R. MAHADEVAN4 pages
AI SummaryWithdrawn

What did the High Court hold?

The High Court dismissed the appeals as withdrawn. This decision was based on the submission by the Revenue that the tax effect in these appeals was less than the monetary limit stipulated in CBDT Circular No. 17/2019. The Circular 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/-. Consequently, the court did not delve into the merits of the substantial question of law. The court explicitly stated that the substantial question of law remains open for determination in appropriate cases. No costs were awarded.

What were the facts?

The appeals were filed by the Principal Commissioner of Income Tax, Puducherry (Revenue) against M/s. Kallakurichi Co-op. Sugar Mills Ltd. (assessee) for assessment years 2014-15 and 2013-14. The appeals challenged a common order dated 30.11.2017 passed by the Income Tax Appellate Tribunal, Madras 'C' Bench. The High Court admitted the appeals on a substantial question of law concerning the applicability of Section 43B of the Income Tax Act, 1961, to amounts payable to the Government but not actually paid. During the hearing, the Revenue brought to the court's notice a 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 these appeals was below this threshold.

What were the issues?

1. Whether the Appellate Tribunal is right in holding that the Government of Tamil Nadu was the lender and the assessee was the borrower, and that any amount payable to a Government, but not actually paid, is not hit by Section 43B of the Income Tax Act? (Question of law) Assessee's contentions: Not recorded. Revenue's contentions: The Revenue argued that the substantial question of law admitted by the court should be decided. However, the Revenue also brought to the court's notice CBDT Circular No. 17/2019, stating that appeals with a tax effect below Rs. 1,00,00,000/- should not be filed or pursued. The Revenue submitted that the tax effect in these appeals was less than the threshold limit.

Which sections of the Income-tax Act were involved?

Section 43B,Section 260A

AI-generated summary — verify with the full judgment below

T.C.A.Nos.507 & 508 of 2018 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 26.08.2022 CORAM : THE HONOURABLE MR. JUSTICE R. MAHADEVAN AND THE HONOURABLE MR. JUSTICE MOHAMMED SHAFFIQ T.C.A.Nos.507 & 508 of 2018 The Principal Commissioner of Income Tax, D.P.Thottam, M.G.Road, Puducherry. ... Appellant in both TCAs Versus M/s.Kallakurichi Co-op. Sugar Mills Ltd., Unit-II, Kachirapalayam, Kallakurichi, Villupuram - 606 702.

... Respondent in both TCAs (PAN No.AAAAK 0655 Q) Appeals preferred under Section 260A of the Income Tax Act, 1961, against the common order of the Income Tax Appellate Tribunal, Madras “C” Bench, dated 30.11.2017 in I.T.A.Nos.2185/Mds/2017 and 2186/Mds/2017. Page 1/4 https://www.mhc.tn.gov.in/judis T.C.A.Nos.507 & 508 of 2018 For Appellant in both TCAs' : Mr.J.Narayanaswamy Senior Standing Counsel For Respondent in both TCAs' : Mr.S.Sridhar COMMON JUDGMENT (Judgment of the Court was delivered by R.MAHADEVAN, J.) These tax case appeals have been filed by the appellant / Revenue, challenging the common order dated 30.11.2017 passed by the Income Tax Appellate Tribunal, Madras 'C' Bench in I.T.A.Nos.2185/Mds/2017 and 2186/Mds/2017, relating to the assessment years 2014-15 and 2013-14 respectively. 2. By order dated 31.08.2018, this court admitted the aforesaid tax case appeals on the following substantial question of law: “Whether the Appellate Tribunal is right in holding that the Government of Tamil Nadu was the lender and the assessee was the borrower, any amount payable to a Government, but not actually paid is not hit by Section 43B of the Income Tax Act?” 3.When the matters were taken up for consideration, the learned counsel Page 2/4 https://www.mhc.tn.gov.in/judis T.C.A.Nos.507 & 508 of 2018 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 these appeals 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 appeals, wherein, the tax effect is said to be less than the monetary limit imposed, are dismissed as withdrawn, keeping open the substantial question of law for determination in appropriate cases. No costs. (R.M.D., J.) (M.S.Q., J.) 26.08.2022

Internet : Yes

Index : Yes / No r n s Page 3/4 https://www.mhc.tn.gov.in/judis T.C.A.Nos.507 & 508 of 2018 R. MAHADEVAN, J. and MOHAMMED SHAFFIQ, J. r n s To 1. The Income Tax Appellate Tribunal, 'C' Bench, Chennai. 2.The Commissioner of Income Tax (Appeals), Puducherry. 3. The Deputy Commissioner of Income Tax, Villupuram Circle, Villupuram. T.C.A.Nos.507 & 508 of 2018 26.08.2022 Page 4/4 https://www.mhc.tn.gov.in/judis

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