PRINCIPAL COMMISSIONER OF IN vs. M/S. KAIVALLYA ENTERTAINMENT

TCA.No.565 of 2019 In the High Court of Judicature at Madras Dated : 13.8.2019 Coram : The Honourable Mr.Justice T.S.SIVAGNANAM and The Honourable Mrs.Justice V.BHAVANI SUBBAROYAN Tax Case Appeal No.565 of 2019 The Principal Commissioner of Income Tax, Central I, Chennai ...Appellant Vs M/s.Kaivalya Entertainment Pvt. Ltd., Chennai-18. ...Respondent APPEAL under Section 260A of the Income Tax Act, 1961 against the order dated 27.7.2017 made in ITA.No.1148/Mds/2015 on the file of the Income Tax Appellate Tribunal, Madras 'A' Bench for the assessment year 2008-09. For Appellant: Mr.T.R.Senthilkumar, SSC assisted by Ms.K.G.Usharani, SC Judgment was delivered by

T.S.Sivagnanam,J

We have elaborately heard Mr.T.R.Senthilkumar, learned Senior Standing Counsel, assisted by Ms.K.G.Usharani, learned Junior Standing Counsel appearing for the appellant - Revenue. 1/4 http://www.judis.nic.in TCA.No.565 of 2019 2. This appeal, filed by the Revenue under Section 260A of the Income Tax Act, 1961 is directed against the order dated 27.7.2017 made in ITA.No. 1148/Mds/2015 on the file of the Income Tax Appellate Tribunal, Madras 'A' Bench for the assessment year 2008-09. 3. The Revenue has filed this appeal by raising the following substantial questions of law : “i. Whether the Tribunal is correct in law in holding that invocation of the provisions of Section 153C of the Income Tax Act and consequent assumption of jurisdiction and passing the assessment order under Section 143(3) read with Section 153A by virtue of such jurisdiction is bad in law ? ii. Whether the Appellate Tribunal is correct in law in relying on the wording imported into the provisions of Section 153C by Finance (No.2) Act, 2014 and applying retrospectively for the assessment year 2008-09, even though the amendment to the provisions of the Act is prospectively with effect from 01.10.2014 ? iii. Whether the Appellate Tribunal has power to read down the amended provisions of Section 153C as amended with effect from 2014 and to invoke the same for the amendment year 2008- 09 ? 2/4 http://www.judis.nic.in TCA.No.565 of 2019 iv. Whether the Tribunal is correct in law in holding that the assessment order under Section 143(3) read with Section 153A on 31.12.2013 by invoking the provisions of Section 153C is only a review of earlier assessment passed under Section 143(3) on 13.12.2010 and is impermissible under the scheme of the Act by ignoring the fact that the Assessing Officer has mandate of the provisions of Section 153A to assess/re-assess total income wherever the provisions of Section 153C of the Act were invoked? And v. Whether the Appellate Tribunal is correct in law in relying upon the judgments delivered in the case of Kalyanji Mavji & Co. Vs. CIT [reported in (1976) 102 ITR 287 (SC)] and CIT Vs. Kelvinator of India Ltd. [reported in (2010) 320 ITR 561 (SC)], which are rendered in the context of reopening of the assessment under Section 147 whereas the present order was passed under Section 153A read with Section 143(3) by invoking the provisions of Section 153C, which are different and distinguishable from the provisions of Section 147 of the Income Tax Act, 1961?” 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. 3/4 http://www.judis.nic.in TCA.No.565 of 2019 T.S.SIVAGNANAM,J AND V.BHAVANI SUBBAROYAN,J RS It is further submitted that the tax effect in this case is less than the threshold limit, as it is Rs.81.46 lakhs. 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 raised 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 make a mention to this Court to restore the appeal to be heard and decided on merits. 13.8.2019 Internet: Yes To The Income Tax Appellate Tribunal, Madras 'A' Bench. TCA.No.565 of 2019 4/4 http://www.judis.nic.in