THE COMMISSIONER OF INCOME T vs. SUSHILA DEVI KEJRIWAL

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TCA/572/2021HC Madras04 January 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 their merits. Instead, the learned counsel for the appellant/Revenue brought to the court's notice CBDT Circular No. 17/2019 dated August 8, 2019. This circular stipulates that appeals shall not be filed or pursued by the Department before the High Court if the tax effect does not exceed Rs. 1,00,00,000/-. The Revenue submitted that the tax effect in these appeals was less than this threshold limit. Consequently, the High Court dismissed the present appeals as withdrawn, based on the submission regarding the tax effect being below the monetary limit. The substantial questions of law were kept open for determination in appropriate cases. No costs were awarded.

What were the facts?

The Revenue filed five Tax Case Appeals before the High Court of Judicature at Madras, challenging a common order dated March 30, 2007, passed by the Income Tax Appellate Tribunal (ITAT), Madras 'C' Bench. These appeals pertained to assessment years 1995-1996, 1996-1997, 1997-1998, 1999-2000, and 2000-2001. The appeals were filed by the Commissioner of Income-tax, Chennai, against the assessee, Sushila Devi Kejriwal. The core of the dispute involved additions made by the assessing officer on account of notional interest, which the ITAT had deleted. The appeals were filed under Section 260A of the Income Tax Act, 1961.

What were the issues?

The Tribunal had to decide two substantial questions of law: 1. Whether, on the facts and in the circumstances of the case, the Income Tax Tribunal was right in deleting the additions made by the assessing officer on account of notional interest as income from house property in view of Section 23(1)(a) of the Income Tax Act? 2. Whether, on the facts and in the circumstances of the case, the Income Tax Tribunal was right in not considering the fact that notional interest on interest-free security deposits accepted by the landlord could be treated as indirect rent for the purpose of arriving at annual letting value as provided under Section 23(1)(a)? The Revenue contended that notional interest on interest-free security deposits accepted by the landlord could be treated as indirect rent for calculating the annual letting value under Section 23(1)(a). The judgment does not record specific arguments from the assessee's side regarding these questions.

Which sections of the Income-tax Act were involved?

Section 260A,Section 23(1)(a)

AI-generated summary — verify with the full judgment below

Tax Case Appeal Nos.572, 574, 577, 578 & 579 of 2021 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 04.01.2022 CORAM THE HONOURABLE MR. JUSTICE R. MAHADEVAN AND THE HONOURABLE MR. JUSTICE MOHAMMED SHAFFIQ Tax Case Appeal Nos. 572, 574, 577, 578 and 579 of 2021 and CMP.Nos. 20450, 20465, 21452 and 20508 of 2021 The Commissioner of Incometax Chennai .. Appellant in all Cases Versus Sushila Devi Kejriwal ...Respondent in all Cases Tax Case Appeals filed under Section 260A of the Income Tax Act, 1961 against the common order dated 30.03.2007 passed by the Income Tax Appellate Tribunal, Madras “C” Bench, in I.T.A.Nos.1567, 1568, 1569, 1570 & 1571/Mds/2005. For Appellant : Mr.J. Narayansamy (in all cases) Senior Standing Counsel For Respondent : Mr. M.Kaushik for M/s.Sridhar (in all cases) 1/4 https://www.mhc.tn.gov.in/judis Tax Case Appeal Nos.572, 574, 577, 578 & 579 of 2021 COMMON JUDGMENT (Judgment of the Court was delivered by R. MAHADEVAN, J.) These tax case appeals have been filed by the appellant / Revenue, calling in question the correctness of the order dated 30.03.2007 passed by the Income Tax Appellate Tribunal, 'C' Bench, Chennai, in I.T.A.Nos.1567, 1568, 1569, 1570 & 1571/Mds/2005, relating to the respective assessment years 1995-1996, 1996-1997, 1997-1998, 1999-2000 and 2000-2001, by raising the following substantial questions of law:- “(i) Whether on the facts and in the circumstances of the case, the Income Tax Tribunal is right in deleting the additions made by the assessing officer on account of notional interest as income from house property in view of Section 23(1)(a) of the Income Tax Act? (ii) Whether on the facts and in the circumstances of the case, the Income Tax Tribunal is right in not considering the fact that notional interest on interest free security deposits accepted by the landlord could be treated as indirect rent for the purpose of arriving at annual letting value as provided under Sec.23(1)(a)?” 2/4 https://www.mhc.tn.gov.in/judis Tax Case Appeal Nos.572, 574, 577, 578 & 579 of 2021 2. When the matters were 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 appeals shall not be filed/pursued by the Department before the High Court in cases where the tax effect does not exceed Rs.1,00,00,000/- (Rupees One Crore). It is also submitted that the tax effect in these appeals are less than the threshold limit. 3. In the light of the aforesaid submissions made by the learned counsel for the appellant / Revenue, the present appeals, wherein, the tax effect is said to be less than the monetary limit imposed, are dismissed as withdrawn, keeping open the substantial questions of law for determination in appropriate cases. No costs. Consequently, connected miscellaneous petitions are closed. [R.M.D, J.] [M.S.Q, J.] 04.01.2022

Internet : Yes

Index : Yes / No dhk 3/4 https://www.mhc.tn.gov.in/judis Tax Case Appeal Nos.572, 574, 577, 578 & 579 of 2021 R. MAHADEVAN, J. and MOHAMMED SHAFFIQ, J. dhk To 1. The Commissioner of Incometax Chennai 2. The Income Tax Appellate Tribunal, Madras “C” Bench. T.C.A. Nos. 572, 574, 577, 578 & 579 of 2021 04.01.2022 4/4 https://www.mhc.tn.gov.in/judis

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