Commissioner of Income Tax vs. Tamil Nadu Small Industries

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TCA/63/2015HC Madras14 December 2020Bench: Hon`ble Dr Justice VINEET KOTHARI6 pages
AI SummaryRemanded

What did the High Court hold?

The High Court observed that the ITAT's order was a remand order. The Revenue's counsel confirmed that the Assessing Officer had not yet passed any order pursuant to this remand. The High Court found no substantial question of law arising from the remand order itself. Therefore, it directed the Assessing Officer to take action in accordance with law in pursuance of the ITAT's remand order. The High Court did not decide on the merits of the interest payment or the applicability of Section 43B, as the matter was remitted back to the Assessing Officer for fresh examination. The appeal was disposed of on this procedural basis.

What were the facts?

The Revenue (Commissioner of Income Tax) filed a Tax Case Appeal under Section 260A of the Income Tax Act, 1961, challenging an order dated 27.06.2014 passed by the Income Tax Appellate Tribunal (ITAT), Madras 'A' Bench. The appeal pertains to Assessment Year 2007-2008 and concerns the assessee, M/s. Tamil Nadu Small Industries Corporation Ltd. The ITAT's order had remanded the matter back to the Assessing Officer to verify whether an interest payment of Rs. 183.90 lakhs was made to the Government of Tamil Nadu or another financial institution, or if it was merely a provision. The Revenue's counsel stated that the Assessing Authority had not yet passed any order pursuant to the ITAT's remand direction.

What were the issues?

1. Whether the ITAT erred in remanding the issue of interest payment to the Assessing Officer for verification, particularly concerning the applicability of Section 43B of the Income Tax Act, 1961. Assessee's contentions: The assessee argued that interest paid to the Government of Tamil Nadu is not hit by the provisions of Section 43B of the Act. The ITAT, in its previous finding, had already held this position. Revenue's contentions: The Revenue appealed against the remand order. The High Court noted that the Revenue's counsel stated that the Assessing Authority had not yet passed any order upon the remand by the learned Tribunal. The judgment does not explicitly record any specific arguments made by the Revenue against the ITAT's finding that Section 43B would not apply to payments to the Government of Tamil Nadu.

Which sections of the Income-tax Act were involved?

Section 260A,Section 43B

AI-generated summary — verify with the full judgment below

Judgment dt. 14.12.2020 in TCA No.63 of 2015 [Commissioner of Income Tax v. M/s.Tamil Nadu Small Industries Corporation Ltd. IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 14.12.2020 CORAM: THE HONOURABLE DR.JUSTICE VINEET KOTHARI & THE HONOURABLE MR.JUSTICE M.S.RAMESH T.C.A.No.63 of 2015 Commissioner of Income Tax, Chennai. ...Appellant Vs. M/s.Tamil Nadu Small Industries Corporation Ltd., Industrial Estate, Guindy, Chennai – 600032. ...Respondent PAN:AAACT1239K

Prayer: Tax Case Appeal filed under Section 260A of the Income Tax Act, 1961 against the order of the Income Tax Appellate Tribunal, Madras 'A' Bench, dated 27.06.2014 in I.T.A.No.450/Mds/2013 for the Assessment Year 2007-2008. 1/6 http://www.judis.nic.in Judgment dt. 14.12.2020 in TCA No.63 of 2015 [Commissioner of Income Tax v. M/s.Tamil Nadu Small Industries Corporation Ltd. For Appellant : Mr.M.Swaminathan, Sr. Standing Counsel Assisted by Ms.V.Pushpa, Jr. Standing Counsel For Respondent : Mr.A.Thiagarajan Standing Counsel JUDGMENT (Made by DR.VINEET KOTHARI,J) The Revenue has filed this Appeal against the order dated 27.06.2014 of the learned Income Tax Appellate Tribunal for Assessment Year 2007-08. The operative portion of the order of the learned Tribunal is quoted below for ready reference:- “14. Heard both sides. Perused orders of lower authorities. We have already held that interest paid to Government of Tamil Nadu is not hit by the provisions of Section 43B of the Act. In the circumstances, we are of the considered view that this matter should go back to the Assessing Officer to verify as to whether assessee paid the interest of Rs.183.90 lakhs to Government of Tamil Nadu or to any other financial institution or it is only a provision made. Needless to say if this amount is 2/6 http://www.judis.nic.in Judgment dt. 14.12.2020 in TCA No.63 of 2015 [Commissioner of Income Tax v. M/s.Tamil Nadu Small Industries Corporation Ltd. paid to Government of Tamil Nadu, the provisions of Section 43B of the Act have no application to such payments. The Assessing Officer shall examine the issue afresh in accordance with law after providing adequate opportunity to the assessee. 15. In the result, appeal of the assessee is partly allowed for statistical purposes.” 2. Learned Senior Standing Counsel for the Revenue Mr.M.Swaminathan submitted that he has verified with the Assessing Authority that so far he has not passed any order upon the remand by the learned Tribunal under the order impugned before us. 3. Against the remand order of the learned Tribunal, we do not find any substantial question of law to be arising in the present case and therefore, the Assessing Authority may take action in accordance with law in pursuance of the remand order of the learned Tribunal. 4. The Tax Case Appeal is accordingly disposed of. No costs. 3/6 http://www.judis.nic.in Judgment dt. 14.12.2020 in TCA No.63 of 2015 [Commissioner of Income Tax v. M/s.Tamil Nadu Small Industries Corporation Ltd. [V.K.,J.] [M.S.R.,J.] 14.12.2020 Index:Yes/No Speaking order/Non-speaking order hvk 4/6 http://www.judis.nic.in Judgment dt. 14.12.2020 in TCA No.63 of 2015 [Commissioner of Income Tax v. M/s.Tamil Nadu Small Industries Corporation Ltd. To 1. The Commissioner of Income Tax, Chennai. 2. The Tamil Nadu Small Industries Corporation Ltd., Industrial Estate, Guindy, Chennai – 600032. 3. The Income Tax Appellate Tribunal, 'A' Bench, Chennai. 5/6 http://www.judis.nic.in Judgment dt. 14.12.2020 in TCA No.63 of 2015 [Commissioner of Income Tax v. M/s.Tamil Nadu Small Industries Corporation Ltd. DR.VINEET KOTHARI,J. and M.S.RAMESH,J. hvk T.C.A.No.63 of 2015 14.12.2020 6/6 http://www.judis.nic.in

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