K.UMAIR AHMED vs. THE ASST COMMISSIONER OF INC

TCA/609/2019HC Madras27 August 2019Bench: Hon`ble Mr Justice T. S. SIVAGNANAM4 pages

AI SummaryDismissed

What did the High Court hold?

The High Court held that the appeal did not raise any substantial question of law. The Court found that the issue agitated before it was entirely factual. The claim for deduction under Section 80RRA was considered by the Assessing Officer, the Commissioner of Income Tax (Appeals), and the Tribunal, all of whom concurrently ruled against the assessee. Crucially, the Court noted that the assessee had admittedly not produced any material to establish his entitlement to the benefit of deduction under Section 80RRA. Therefore, the Court concluded that there was no question of law, let alone a substantial question of law, arising for consideration. Consequently, the appeal was dismissed. No specific finding was given on each of the four questions of law as the Court deemed the matter purely factual.

What were the facts?

The assessee, Shri K. Umair Ahmed, filed an appeal before the High Court of Judicature at Madras against the order of the Income Tax Appellate Tribunal (ITAT), Madras 'B' Bench, dated 28.02.2018. This order pertained to assessment year 2003-04. The appeal was filed under Section 260A of the Income Tax Act, 1961. The core of the dispute revolved around the assessee's claim for deduction under Section 80RRA of the Act. The Assessing Officer, the Commissioner of Income Tax (Appeals), and the ITAT had all ruled against the assessee on this claim. The High Court noted that the assessee had not produced any material to substantiate his entitlement to the deduction.

What were the issues?

The High Court was asked to decide on four substantial questions of law raised by the assessee concerning the claim for deduction under Section 80RRA of the Income Tax Act, 1961: 1. Whether the Appellate Tribunal erred in law by rejecting the claim for deduction under Section 80RRA, overlooking purposive interpretation and the substance theory? 2. Whether the Appellate Tribunal erred in law by concluding that a person with specialized knowledge and business management experience in a particular industry is not a 'Technician' as defined under Explanation (c)(iii) to Section 80RRA? 3. Whether the Appellate Tribunal erred in holding that physical presence outside India is a prerequisite for claiming deduction under Section 80RRA for services rendered abroad? 4. Whether the Appellate Tribunal erred in law by deeming the furnishing of Form No. 10H along with the return of income as a mandatory requirement for the Section 80RRA deduction claim? The assessee argued for a purposive interpretation of the law and the application of the substance theory. The revenue's contentions were not explicitly recorded, but the judgment indicates that the revenue, through the Assessing Officer, CIT(A), and ITAT, had consistently held against the assessee. The assessee relied on the substance theory and purposive interpretation, while the revenue's stance was implicitly based on the lack of substantiation and adherence to statutory requirements.

Which sections of the Income-tax Act were involved?

Section 260A,Section 80RRA

AI-generated summary — verify with the full judgment below

TCA.No.609 of 2019 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 27.08.2019 CORAM : THE HONOURABLE MR.JUSTICE T.S.SIVAGNANAM and THE HONOURABLE MRS.JUSTICE V.BHAVANI SUBBAROYAN TCA.No.609 of 2019 Shri K.Umair Ahmed PAN: AAHPU 4907D .. Appellant

Vs. The Assistant Commissioner of Income Tax, Non Corporate Circle - 6(1), Chennai - 600 006. .. Respondent Prayer : Tax Case Appeal filed under Section 260A of the Income Tax Act, 1961, against the order of the Income Tax Appellate Tribunal Madras 'B' Bench, Chennai dated 28.02.2018 in I.T.A.No.2110/Mds/2017 for the assessment years 2003-04. For Appellant : Mr.A.S.Sriraman For Respondent : M/s.R.Hemalatha Senior Standing Counsel JUDGMENT [Judgment of the Court was delivered by T.S.Sivagnanam, J.] This appeal by the assessee under Section 260 A of the Income Tax Act, 1961 (hereinafter referred to as "the Act") is directed against the order dated 28.02.2018 in I.T.A.No.2110/Mds/2017 for the assessment years 2003-04. 1/4 http://www.judis.nic.in TCA.No.609 of 2019 2.The assessee has raised the following substantial questions of law : “1.Whether the Appellate Tribunal is correct in law in rejecting the claim for deduction u/s.80RRA of the Act overlooking the purposive interpretation and further overlooking the substance theory? 2.Whether the Appellate Tribunal is correct in law in concluding that a person with specialized knowledge in a particular industry and experience in managing that business is not covered within the definition of Technician as per Explanation (c)(iii) under Section 80RRA? 3.Whether the Appellate Tribunal is correct in holding that it is necessary for a technician to be physically outside India for the purpose of claiming deduction u/s.80RRA for any service rendered by him outside India? 4.Whether the Appellate Tribunal is correct in law in reaching conclusion on the furnishing of Form No.10H along with the return of income as mandatory requirement to fortify the claim for deduction u/s.80RRA of the Act? 3.We have elaborately heard Mr.A.S.Sriraman, learned counsel for the appellant/assessee and M/s.R.Hemalatha, learned Senior Standing Counsel accepts notice on behalf of the respondent/revenue. 2/4 http://www.judis.nic.in TCA.No.609 of 2019 4.On a careful consideration of the materials placed before this Court and after hearing the arguments of the learned counsels, we are of the considered view that the issue agitated before us is entirely factual. The claim made by the assessee that he is entitled to the benefit under Section 80RRA of the Act was considered for its correctness by the Assessing Officer, Commissioner of Income Tax (Appeals) and the Tribunal and concurrently they held against the assessee. Admittedly, the assessee did not produce any material to establish that he is entitled to the benefit of deduction under Section 80RRA of the Act. 5.For the above reason, we find that there is no question of law much less the substantial question of law arisen for consideration. Accordingly, the appeal fails and is dismissed. No costs. (T.S.S., J.) (V.B.S., J.) 27.08.2019 Speaking order: Yes/No Index: Yes/No cse T.S.SIVAGNANAM, J. 3/4 http://www.judis.nic.in TCA.No.609 of 2019 and V.BHAVANI SUBBAROYAN, J. cse

To 1.The Assistant Commissioner of Income Tax, Non Corporate Circle - 6(1), Chennai - 600 006. 2.The Income Tax Appellate Tribunal Madras, 'B' Bench, Chennai. TCA.No.609 of 2019 27.08.2019 4/4 http://www.judis.nic.in

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