PRINCIPAL COMMISSIONER OF vs. MAINETTI INDIA PVT LTD

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TCA/597/2017HC Madras05 August 2022Bench: HON`BLE Mr. JUSTICE R. MAHADEVAN4 pages
AI SummaryWithdrawn

What did the High Court hold?

The High Court, in its judgment delivered by R. Mahadevan, J., noted the submission made by the learned counsel for the appellant/Revenue regarding CBDT Circular No.17/2019. This circular mandates 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 confirmed that the tax effect in this appeal was less than the stipulated threshold limit. Consequently, the High Court dismissed the present appeal as withdrawn, explicitly stating that the substantial questions of law are kept open for determination in an appropriate case. No costs were awarded.

What were the facts?

The Revenue, represented by the Principal Commissioner of Income Tax 4, filed a Tax Case Appeal before the High Court of Judicature at Madras, challenging an order dated 24.08.2016 passed by the Income Tax Appellate Tribunal (ITAT), 'D' Bench, Chennai. This order pertained to the assessment year 2010-11 and concerned the respondent assessee, M/s.Mainetti India Pvt. Ltd. The appeal was admitted on a substantial question of law. During the proceedings, the Revenue's counsel brought to the court's attention a CBDT Circular No.17/2019, which stipulates that appeals with a tax effect not exceeding Rs.1,00,00,000/- should not be filed or pursued. The Revenue submitted that the tax effect in this particular appeal was below this threshold.

What were the issues?

1. Whether, on the facts and circumstances of the case and in law, the ITAT was right in holding that expenditure incurred in foreign currency, which is excluded from export turnover, should also be excluded from total turnover to grant relief under Section 10AA of the Income Tax Act, 1961? Assessee's Contention: The judgment does not record any specific contentions made by the assessee. The appeal was filed by the Revenue, and the assessee did not appear before the High Court. Revenue's Contention: The Revenue's primary submission before the High Court was based on CBDT Circular No.17/2019, stating that the tax effect in the present appeal was below the monetary limit prescribed for filing or pursuing appeals before the High Court. Therefore, the appeal should be dismissed as withdrawn.

Which sections of the Income-tax Act were involved?

Section 10AA,Section 260A

AI-generated summary — verify with the full judgment below

T.C.A.No.597 of 2017 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED 05.08.2022 CORAM THE HON'BLE Mr. JUSTICE R. MAHADEVAN AND THE HON'BLE Mr. JUSTICE MOHAMMED SHAFFIQ Tax Case Appeal No.597 of 2017 The Principal Commissioner of Income Tax 4 No.121, Nungambakkam High Road Chennai 600 034

.. Appellant Vs. M/s.Mainetti India Pvt. Ltd. 3rd Floor, Florida Towers No.138/30, Nelson Manickam Road Chennai 600 029 PAN : AAA CM 6894 M .. Respondent Tax Case Appeal filed under Section 260A of the Income Tax Act, 1961 against the order dated 24.08.2016 passed by the Income Tax Appellate Tribunal, 'D' Bench, Chennai, in I.T.A.No.616/Mds/2015. For Appellant : Mr.Karthik Ranganathan For Respondent : No appearance 1/4 https://www.mhc.tn.gov.in/judis T.C.A.No.597 of 2017 J U D G M E N T (Judgment was delivered by R. MAHADEVAN, J.) This tax case appeal has been filed by the appellant/Revenue, calling in question the correctness of the order dated 24.08.2016 passed by the Income Tax Appellate Tribunal, 'D' Bench, Chennai, in I.T.A.No.616/Mds/2015, relating to the assessment year 2010-11. 2. By order dated 07.12.2017, this Court admitted the aforesaid tax case appeal on the following substantial question of law : “Whether on facts and circumstances of the case and in law, the ITAT was right in law in holding that, expenditure incurred in foreign currency which are excluded from the export turnover should also be excluded from total turnover in order to grant relief under Section 10AA of the Income Tax Act, 1961?” 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 2/4 https://www.mhc.tn.gov.in/judis T.C.A.No.597 of 2017 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.] [M.S.Q, J.] 05.08.2022

Index : Yes / No gya To 1.The Principal Commissioner of Income Tax 4 No.121, Nungambakkam High Road Chennai 600 034 2.The Commissioner of Income Tax (Appeals) Chennai 3.The Deputy Commissioner of Income Tax Corporate Circle 4(1) Chennai 4. The Income Tax Appellate Tribunal 'D' Bench Chennai 3/4 https://www.mhc.tn.gov.in/judis T.C.A.No.597 of 2017 R. MAHADEVAN, J. AND MOHAMMED SHAFFIQ, J. gya Tax Case Appeal No.597 of 2017 05.08.2022

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