PRINCIPAL COMMISSIONER OF IN vs. M/S. EAST COAST CONSTRUCTION

TCA.No.54 of 2020 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 19.1.2021 CORAM THE HONOURABLE MR.JUSTICE T.S.SIVAGNANAM and THE HONOURABLE MS.JUSTICE R.N.MANJULA Tax Case Appeal No.54 of 2020

The Principal Commissioner of Income Tax, Central-1, Chennai-34 ...Appellant Vs M/s.East Coast Constructions & Industries Ltd., Chennai-6 ...Respondent APPEAL under Section 260A of the Income Tax Act, 1961 against the order dated 14.2.2018 passed by the Income Tax Appellate Tribunal, 'C' Bench, Chennai made in I.T.A.No.1433/Chny/2016 for the assessment year 2012-13. For Appellant: Mr.T.R.Senthilkumar, SSC assisted by Ms.K.G.Usharani, JSC For Respondent : Mr.G.Baskar Judgment was delivered by

T.S.SIVAGNANAM

This appeal has been filed by the Revenue under Section 260A of 1/5 https://www.mhc.tn.gov.in/judis/ TCA.No.54 of 2020 the Income Tax Act, 1961 ('the Act' for brevity) challenging the order dated 14.2.2018 made in I.T.A.No.1433/Chny/2016 on the file of the Income Tax Appellate Tribunal, Chennai, 'C' Bench ('the Tribunal' for brevity) for the assessment year 2012-13. 2. The appeal was admitted on 31.1.2020 on the following substantial questions of law: “(i) Whether on the facts and in the circumstances of the case, the Appellate Tribunal is right in law in holding that the assessee is eligible for deduction u/s.80IA(4) of the Income Tax Act, 1961? (ii) Whether on the facts and in the circumstances of the case, the Appellate Tribunal is correct in law in holding that the assessee is a “Developer” and not a “Contractor” without appreciating the findings of the assessing officer and therefore considering the assessee eligible for deduction u/s.80IA(4) of the Income Tax Act, 1961? (iii) Whether the ITAT is correct in law in deleting the disallowance made u/s.14A of the Act by placing reliance on the decision of the Hon'ble High Court of Delhi in the case of Joint Investment Vs. CIT (215) 372 ITR 694, for giving relief to the assessee, by ignoring that the above decision is still pending in a higher 2/5 https://www.mhc.tn.gov.in/judis/ TCA.No.54 of 2020 forum for final decision? (iv) Whether the ITAT is correct in law in placing reliance on assessee's own case for A.Y.2009-10 and deleting the disallowance u/s.14A of the Act, without considering that the above decision was not accepted by the Department and the matter has not attained finality? (v) Whether on the facts and in the circumstances of the case, the Appellate Tribunal is correct in law in remitting back the issue of retention money to Assessing Officer by placing reliance on its own decision in the case of M/s.East Coast Consultants & Infrastructure Ltd., without appreciating that the facts and issue involved in these cases are distinguishable? and (vi) Whether the ITAT is correct in deleting the addition made due to belated remittances of employees' contribution to PF & ESI without giving weightage to the provisions of Sec.2(24)(x) r.w.s.36(1)(va) wherein it is clear that the employoee's contribution to PF, etc., partake the character of income if not deposited within the due date?” 3. We have heard Mr.T.R.Senthilkumar, learned Standing Senior Counsel assisted by Ms.K.G.Usharani, learned Junior Standing Counsel 3/5 https://www.mhc.tn.gov.in/judis/ TCA.No.54 of 2020 appearing for the appellant/Revenue and Mr.G.Baskar, learned counsel appearing 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 framed 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. 19.1.2021 To The Income Tax Appellate Tribunal, 'C' Bench, Chennai. RS 4/5 https://www.mhc.tn.gov.in/judis/ TCA.No.54 of 2020 T.S.SIVAGNANAM,J AND R.N.MANJULA,J RS TCA.No.54 of 2020 19.1.2021 5/5 https://www.mhc.tn.gov.in/judis/