THE COMMISSIONER OF INCOME TAX vs. P.N.INVESTMENTS P LTD

TCA/53/2022HC Madras15 March 2022Bench: Honourable Mr Justice R. SURESH KUMAR4 pages

AI SummaryDismissed

What did the High Court hold?

The High Court dismissed the Tax Case Appeal filed by the Revenue. The dismissal was based on a submission by the learned Senior Standing Counsel for the Revenue that, as per CBDT's Circular No. 9 of 2024 dated 17.09.2024, the tax effect in the instant case was less than the monetary limit imposed for filing appeals. Consequently, the Court decided to dispose of the appeal without adjudicating the substantial questions of law. The substantial questions of law were kept open for adjudication at an appropriate stage. The Court stated that there would be no order as to costs.

What were the facts?

The Revenue, Commissioner of Income Tax, Chennai, filed a Tax Case Appeal before the High Court of Judicature at Madras, challenging an order of the Income Tax Appellate Tribunal (ITAT), Chennai. The ITAT had upheld an order passed by the Commissioner of Income Tax (Appeals) [CIT(A)], which deleted an addition of Rs. 44.15 lakhs made by the Assessing Officer. This addition was on account of a reduction in profit due to a change in the assessee's method of accounting. The assessment year in question is 2003-04. The appeal was filed under Section 260A of the Income Tax Act, 1961.

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 Income Tax Tribunal was right in upholding the order passed by the CIT(A) who deleted the addition of Rs. 44.15 lakhs made on account of reduction in profit due to change in the method of accounting? 2. Whether, on the facts and in the circumstances of the case, the Tribunal was right in following the order of the Supreme Court in the case of Southern Technology and JCIT reported in 320 ITR 577 wherein it has been held that the Reserve Bank disclosure norm had nothing to do with the computation of taxable income under the Income Tax Act? The Revenue argued that the Tribunal erred in deleting the addition. The Revenue also questioned the Tribunal's reliance on the Supreme Court decision in Southern Technology. The judgment does not record specific arguments made by the assessee, M/s. P.N. Investments P Ltd.

Which sections of the Income-tax Act were involved?

Section 260A

AI-generated summary — verify with the full judgment below

T.C.A.No.53 of 2022 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 22.10.2024 CORAM THE HONOURABLE MR.JUSTICE R.SURESH KUMAR and THE HONOURABLE MR.JUSTICE C.SARAVANAN T.C.A.No.53 of 2022 The Commissioner of Income Tax, Chennai. ... Appellant -Vs- M/s.P.N.Investments P Ltd, New No.12, Old No.71, III Main Road, Kasturbanagar, Adyar, Chennai - 600 020. ... Respondent PRAYER : Tax Case Appeal filed under Section 260 A of the Income Tax Act, 1961, against the order of the Income Tax Appellate Tribunal 'D' Bench, Chennai dated 08.10.2010 in I.T.A.No.1081/Mds/2010 for the assessment year 2003-04. For Appellant : Mrs.V.Puspha Senior Standing Counsel For Respondent : Mr.R.Sivaraman 1/4 https://www.mhc.tn.gov.in/judis T.C.A.No.53 of 2022 J U D G M E N T (Judgment of the Court was delivered by R.SURESH KUMAR, J.) This Tax Case Appeal has been filed by the Revenue calling in question the correctness of the order passed by the Income Tax Appellate Tribunal, Chennai by raising the following substantial questions of law: 1. Whether on the facts and in the circumstances of the case, the Income Tax Tribunal was right in upholding the order passed by CIT (A) who deleted the addition of Rs.44.15 lakhs made on account of reduction in profit due to change in the method of accounting? 2. Whether on the facts and in the circumstances of the case, the Tribunal was right in following the order of the Supreme Court in the case of Southern technology and JCIT reported in 320 ITR 577 wherein it has been held that the Reserve Bank discloser norm had nothing to do with the computation of taxable income under the Income Tax Act? 2. It is brought to our notice by the learned Senior Standing Counsel for the appellant Revenue that in the instant case, as per the CBDT's Circular No.9 of 2024 dated 17.09.2024 the tax effect is said to be less than the monetary limit imposed and therefore, the appeal can be disposed of, keeping the 2/4 https://www.mhc.tn.gov.in/judis T.C.A.No.53 of 2022 substantial questions of law raised in this appeal open for adjudication at a later point of time. 3. Recording the aforesaid submission made by the learned Senior Standing Counsel for the appellant Revenue, this Tax Case Appeal is dismissed for low tax effect, keeping open the substantial questions of law for adjudication at appropriate stage. However, there shall be no order as to costs. (R.S.K., J.) (C.S.N., J.) 22.10.2024 (3/3) NCC : Yes / No Index : Yes / No Speaking Order : Yes / No vji To The Income Tax Appellate Tribunal 'D' Bench, Chennai. 3/4 https://www.mhc.tn.gov.in/judis T.C.A.No.53 of 2022 R.SURESH KUMAR, J. and C.SARAVANAN, J. vji T.C.A.No.53 of 2022 22.10.2024 (3/3) 4/4 https://www.mhc.tn.gov.in/judis

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