COMMISSIONER OF INCOME TAX vs. K.CHIRANJEEVI

TCA/54/2022HC Madras10 February 2022Bench: Hon`ble Mr Justice R. MAHADEVAN4 pages

AI SummaryWithdrawn

What did the High Court hold?

The High Court did not decide the substantial questions of law on merits. The Revenue brought to the court's notice Circular No. 17/2019 issued by the CBDT, which stipulates that appeals should 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 this appeal was below the threshold limit. Consequently, the High Court dismissed the appeal as withdrawn, stating that the substantial questions of law were kept open for determination in an appropriate case. No costs were awarded.

What were the facts?

The Revenue, Commissioner of Income Tax, Chennai, filed a Tax Case Appeal under Section 260A of the Income Tax Act, 1961, against an order of the Income Tax Appellate Tribunal (ITAT), Chennai, dated 09.01.2001. The appeal pertained to assessment year 1989-90 and challenged the ITAT's decision regarding the taxability of premium paid on a deferred annuity policy. The core dispute revolved around whether the amount had constructively been received by the assessee, K. Chiranjeevi, even if not directly paid to LIC by the producer. The High Court was considering the substantial questions of law raised by the Revenue.

What were the issues?

The Tribunal had to decide the following substantial questions of law: 1. Whether the Tribunal was correct in holding that the premium paid on a deferred annuity policy cannot be taxed if the amount had not reached the assessee's hands. 2. Whether the Tribunal was correct in disregarding the fact that the entire remuneration was paid by producers to the assessee's agent, implying constructive receipt by the assessee. 3. Whether the Tribunal was correct in treating amounts not paid directly to LIC by the producer as payments towards the annuity. The Revenue contended that the amounts paid by producers to the assessee's agent constituted constructive receipt. The assessee's arguments are not recorded in the provided text. The Tribunal's decision on these issues is the subject of the appeal.

Which sections of the Income-tax Act were involved?

Section 260A

AI-generated summary — verify with the full judgment below

T.C.A.No.54 of 2022 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 10.02.2022 CORAM : THE HONOURABLE MR. JUSTICE R. MAHADEVAN AND THE HONOURABLE MR. JUSTICE J.SATHYA NARAYANA PRASAD T.C.A.No.54 of 2022 Commissioner of Income Tax, Chennai. ... Appellant Versus K.Chiranjeevi ... Respondent Tax Case Appeal filed under Section 260A of the Income Tax Act, 1961, against the order of the Income Tax Appellate Tribunal, Chennai, “B” Bench, dated 09.01.2001 in I.TA.No.2766/Mds/1992. For Appellant : Mr.M.Swaminathan Senior Standing Counsel

J U D G M E N T (Judgment of the Court was delivered by R. MAHADEVAN, J.) This tax case appeal has been filed by the appellant / Revenue, challenging the order dated 09.01.2001 passed by the Income Tax Appellate Page 1/4 https://www.mhc.tn.gov.in/judis T.C.A.No.54 of 2022 Tribunal, Bench 'B', Chennai, in I.TA.No.2766/Mds/1992, relating to the assessment year 1989-90, by raising the following substantial questions of law:- “1. Whether in the facts and circumstances of the case, the Tribunal was right in holding that since the amount had not reached the assessee's hands, the premium paid on the deferred annuity policy cannot be taxed? 2. Whether in the facts and circumstances of the case, the Tribunal was right in ignoring the fact that the entire remuneration had been paid by the producers to the agent of the assessee, and as such the amount had been constructively received by the assessee? 3. Whether in the facts and circumstances of the case, the Tribunal was right in treating the amounts not paid directly to LIC by the producer, as amount paid towards annuity?" 3. When the matter was taken up for consideration, the learned counsel 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 Page 2/4 https://www.mhc.tn.gov.in/judis T.C.A.No.54 of 2022 Rs.1,00,00,000/- (Rupees One Crore). It is also submitted that the tax effect in this appeal 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 appeal, wherein, the tax effect is said to be less than the monetary limit imposed, is dismissed as withdrawn, keeping open the substantial questions of law for determination in an appropriate case. No costs.

(R.M.D., J.) (J.S.N.P., J.) 10.02.2022 av

Internet : Yes

Index : Yes / No To 1. The Income Tax Appellate Tribunal, Chennai, “B” Bench, 2. Commissioner of Income Tax, Chennai. 3. The Deputy Commissioner of Income Tax Special Range- IV, Madras. Page 3/4 https://www.mhc.tn.gov.in/judis T.C.A.No.54 of 2022 R. MAHADEVAN, J. and J.SATHYA NARAYANA PRASAD

, J.

av T.C.A.No.54 of 2022 10.02.2022 Page 4/4 https://www.mhc.tn.gov.in/judis

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