COMMISSIONER OF INCOME TAX vs. M/S SOUTH INDIA BOTTLING CO

TCA.Nos.60 to 62 of 2021 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 15.02.2021 CORAM : The Honourable Mr.Justice T.S.SIVAGNANAM and The Honourable Ms.Justice R.N.MANJULA Tax Case Appeal Nos.60 to 62 of 2021 and C.M.P.Nos.1170 & 1171 of 2021 Commissioner of Income Tax, Chennai. ...Appellant in all cases Vs M/s.South India Bottling Co. Pvt. Ltd., No.4, 10th Street Nandanam Extention, Nandanam, Chennai - 600 035. [PAN:AAICS 3438B] ...Respondent in all cases COMMON PRAYER: Appeals under Section 260A of the Income Tax Act, 1961 against the order dated 27.08.2019 made in ITA.Nos.710, 711 & 712/Chny/2019 on the file of the Income Tax Appellate Tribunal, 'A' Bench, Chennai for the assessment years 2010-11, 2011-12 & 2013-14. (in all cases) For Appellant: Mr.J.Narayanasamy Senior Standing Counsel For Respondent: Mr.A.S.Sriraman 1/8 https://www.mhc.tn.gov.in/judis/ TCA.Nos.60 to 62 of 2021 COMMON JUDGMENT (Delivered by T.S.Sivagnanam,J) These appeals, filed by the Revenue, are directed against the order dated 27.08.2019 made in ITA.Nos.710, 711 & 712/Chny/2019 on the file of the Income Tax Appellate Tribunal, 'A' Bench, Chennai ('the Tribunal' for brevity) for the assessment years 2010-11, 2011-12 & 2013-14. 2. The Revenue in all these appeals has raised the following substantial questions of law for consideration: "1. Whether on facts and in the circumstances of the case, the Tribunal was right holding that there is no delay in filing of e appeal by the assessee to CIT(A) and remitting the case back for disposal on merits and thereby condoning the delay in filing of appeal before CIT(A)? 2. Whether on facts and in the circumstances of the case, the Tribunal was right holding that there is no delay in filing of e appeal since the date of filing of belated e appeal relates back to the date of filing of manual appeal? 3. Whether on facts and in the circumstances of the case, the Tribunal was right ignoring the Rr45 of the IT Rules mandating filing of E appeal 2/8 https://www.mhc.tn.gov.in/judis/ TCA.Nos.60 to 62 of 2021 w e f 1.3.2016 and Board Circular 20/2016 extending the time for filing of e appeal only till 15.6.2016 and thereby condoning the delay in filing of appeal before CIT(A)?and 4. Whether on facts and in the circumstances of the case, the Tribunal was right in condoning the delay in filing of appeal even though the assessee had failed to file any petition for condonation of delay before the CIT(A)?" 3. We have heard Mr.J.Narayanasamy, learned Senior Standing Counsel appearing for the appellant/Revenue and Mr.A.S.Sriraman, learned counsel for the respondent. 4. Identical questions were answered in the case of The Commissioner of Income Tax vs A.A.Antony in TCA.No.432 of 2020 dated 18.12.2020, wherein the order passed by the Tribunal was confirmed and the appeal was directed to be heard and decided on merits. The operative portion of the judgment reads as follows: "12. Taking into consideration the Circular issued by CBDT, which in our opinion, appears to be a one time measure, the substantive right of appeal 3/8 https://www.mhc.tn.gov.in/judis/ TCA.Nos.60 to 62 of 2021 should not be denied to the assessees on hand on a technical ground. However, we make it clear that this observation cannot be taken advantage by the assessees, as of now, when the procedure has been in vogue ever since the year 2016 and stood the test of time and in all probabilities, as of now, all teaching problems would have been solved. Therefore, bearing in mind the fact situation in the year 2016, we are of the view that the appeals need not have been rejected by the CITA on the ground that they were not e-filed within the period of limitation. 13. One more aspect which we had noted is that in the case of assessee in T.C.A.No.433 of 2020, the order of assessment was passed on 31.03.2016, limitation for filing the appeal before the CITA would expire on 30.04.2016 and an appeal filed beyond the said period was time barred. However, if Circular No. 20/2016 is made applicable, then, the time limit for filing the e-appeals stood extended upto 15.06.2016 and even going by the date for verification of e- appeals, it was made operational on 12.05.2016 for individuals, both these dates are well beyond the period of limitation in the case on assessee in T.C.A.No.433 of 2020. 4/8 https://www.mhc.tn.gov.in/judis/ TCA.Nos.60 to 62 of 2021 14. Mr.Karthik Ranganathan, learned Standing counsel for the Revenue had submitted that the assesees may be sent back to the CITA to file an application for condonation of delay and the CITA may be directed to consider the same in accordance with law. 15. We are of the view that if we are to direct the assessees to adopt such a procedure, as argued by the learned standing counsel, it would be very harsh on the assessees, especially when the appeals are of the year 2016-2017 and even assuming if it is done, the contention which were advanced before us by Mr.A.S.Sriraman, learned counsel for the assessee would be once more again advanced before the CITA and ultimately, lead to another round of litigation on the issue of limitation alone, which we feel should not happen. 16. That apart, as observed earlier, the reprieve given to the assessee by the CBDT appears to be a one time measure and the benefit can be extended to the respondents / assessees and we find that there is no error committed by the Tribunal in exercising discretion in favour of the respondents / 5/8 https://www.mhc.tn.gov.in/judis/ TCA.Nos.60 to 62 of 2021 assessees. 17. Apart from the above findings rendered by us we note that all the appeals filed by the revenue would have been dismissed on the ground of low tax effect, but for the application of Circular No. 20/16. 18.Mr.J.S.Narayanasamy, learned Senior Standing counsel for the Revenue submitted that in the appeals in T.C.A.Nos.432 and 436 of 2020, the delay is more than 400 days and not marginal, as in the case of assessee in T.C.A.NO.433 of 2020 and in another case it is more than 900 days. 19. Be that as it may, we have taken note of the fact situation, which was prevailing at the relevant time and as noted by the CBDT while issuance of Circular, therefore, we do not wish to take a different view than the view taken by us noting the fact situation in T.C.A.No.433 of 2020. In the light of the above, we are not inclined to entertain the appeals filed by the Revenue, which are accordingly dismissed, but, we leave the Substantial Questions of Law open for consideration. No costs." 6/8 https://www.mhc.tn.gov.in/judis/ TCA.Nos.60 to 62 of 2021 5. Thus, by following the above decision, the present Tax Case Appeals are dismissed and the substantial questions of law are answered against the Revenue. The appeals shall be heard by the Commissioner of Income Tax (Appeals) and decided on merits in accordance with law. No costs. Consequently, connected miscellaneous petitions are closed. (T.S.S.,J.) (R.N.M.,J.) 15.02.2021 Index: Yes/No Internet:Yes/No hvk To 1. The Income Tax Appellate Tribunal, 'A' Bench, Chennai. 2. The Commissioner of Income Tax, Chennai. 7/8 https://www.mhc.tn.gov.in/judis/ TCA.Nos.60 to 62 of 2021 T.S.SIVAGNANAM,J AND R.N.MANJULA,J hvk TCA.Nos.60 to 62 of 2021 and C.M.P.Nos.1170 & 1171 of 2021 15.02.2021 8/8 https://www.mhc.tn.gov.in/judis/