THE COMMISSIONR OF INCOME TAX vs. M/S COVANTA MADURAI OPERATAI

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TCA/515/2015HC Madras30 June 2021Bench: Hon`ble Mr Justice M.DURAISWAMY5 pages
AI SummaryWithdrawn

What did the High Court hold?

The High Court dismissed the appeal as withdrawn. 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 the High Court to Rs. 1 crore. As the tax effect in this case was below this threshold, the appeal was withdrawn. The Court explicitly stated that the substantial questions of law framed were left open. Liberty was granted to the Revenue to seek restoration of the appeal if the tax effect was found to be above the threshold limit. No decision was made on the merits of the substantial questions of law.

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 of the Income Tax Appellate Tribunal (ITAT), Chennai, dated February 25, 2015. The appeal pertained to Assessment Year 2003-04 and challenged the ITAT's deletion of a penalty levied under Section 271(1)(c) of the Act. The amount in dispute was not explicitly stated, but the appeal was admitted on substantial questions of law. The procedural history leading to the High Court appeal involved the ITAT's decision to delete the penalty.

What were the issues?

The Tribunal had to decide the following substantial questions of law: 1. Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in deleting the penalty levied under Section 271(1)(c) of the Income Tax Act? 2. Is not the finding of the Tribunal bad by deleting the penalty especially when the assessee had deliberately claimed deduction under Section 80IA for which he was not entitled to and had thus furnished inaccurate particulars of income which amounts to concealment? The Revenue argued that the assessee had deliberately claimed a deduction under Section 80IA for which it was not entitled, thereby furnishing inaccurate particulars of income amounting to concealment, and thus the penalty should not have been deleted. The judgment does not record specific arguments from the assessee's side regarding these issues, other than their counsel appearing.

Which sections of the Income-tax Act were involved?

Section 260A,Section 271(1)(c),Section 80IA

AI-generated summary — verify with the full judgment below

T.C.A.No.515 of 2015 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 30.06.2021 CORAM THE HON'BLE MR. JUSTICE M.DURAISWAMY AND THE HON'BLE MRS.JUSTICE R. HEMALATHA T.C.A.No.515 of 2015 The Commissioner of Income Tax, Chennai. ... Appellant Vs. M/s.Covanta (Madurai) Operating P Ltd. 101, 4th Main Road, Gandhi Nagar, Adyar, Chennai – 600 020. ... Respondent Appeal preferred under Section 260A of the Income Tax Act, 1961, against the order of the Income Tax Appellate Tribunal, Madras, “B” Bench, dated 25.02.2015 in I.TA.No.714/Mds/2014, Assessment Year 2003-04. For Appellant : Mr.T.Ravi Kumar Senior Standing Counsel For Respondent : Mr.M.Kaushik for Mr.S.Sridhar JUDGMENT Page 1/5 T.C.A.No.515 of 2015 (Judgment was delivered by M.DURAISWAMY, J.) We have heard Mr.T.Ravi Kumar, learned Senior Standing Counsel for the appellant/Revenue and Mr.M.Kaushik for Mr.S.Sridhar, learned counsel for the respondent/assessee. 2.The appeal, filed by the Revenue under Section 260A of the Income Tax Act, 1961 (for short, the Act) is directed against the order dated 25.02.2015 made in I.TA.No.714/Mds/2014 on the file of the Income Tax Appellate Tribunal, Chennai, “B” Bench (for brevity, the Tribunal) for the Assessment Year 2003-04. 3.The appeal was admitted on 28.07.2015 on the following substantial questions of law: “1.Whether on the facts and in the circumstances of the case, the Appellate Tribunal was right in deleting the penalty levied under Section 271(1)(c) of the Income Tax Act? 2.Is not the finding of the Tribunal bad by Page 2/5 T.C.A.No.515 of 2015 deleting the penalty especially when the assessee had deliberately claimed deduction under Section 80IA for which he was not entitled to and had thus furnished inaccurate particulars of income which amounts to concealment?” 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 08.08.2019 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 as withdrawn on account of the Low Tax Effect. The substantial questions of law framed are left open. In the event the tax effect in this case 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. No costs. Page 3/5 T.C.A.No.515 of 2015 [M.D., J.] [R.H., J.] 30.06.2021

Index : Yes/No Internet : Yes

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To 1.The Income Tax Appellate Tribunal, Chennai, “B” Bench 2.The Commissioner of Income Tax, Chennai. Page 4/5 T.C.A.No.515 of 2015 M.DURAISWAMY, J. and R. HEMALATHA, J. mkn T.C.A.No.515 of 2015 30.06.2021 Page 5/5

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