PRINICPAL COMMISSIONER OF IN vs. R.ELANGOVAN

TCA/653/2019HC Madras05 September 2019Bench: Hon`ble Dr Justice VINEET KOTHARI4 pages

AI SummaryDismissed

What did the High Court hold?

The High Court did not decide the substantial questions of law on merits. The Court noted that the learned Senior Standing Counsel for the Revenue brought to its notice a Circular instruction issued by the Central Board of Direct Taxes (CBDT) vide Circular No.17/2019 dated 8th August 2019. This circular stipulates that appeals shall not be filed or pursued by the Department before the High Court in cases where the tax effect does not exceed Rs.1,00,00,000/-. In the present case, the tax effect was stated to be less than this monetary limit. Consequently, the High Court dismissed the appeal filed by the Revenue as withdrawn. The Court explicitly stated that the substantial questions of law were kept open for determination in appropriate cases. No costs were awarded.

What were the facts?

The Principal Commissioner of Income Tax (PCIT), Coimbatore, filed a Tax Case Appeal before the High Court of Judicature at Madras. The appeal challenged an order dated 19.5.2016 passed by the Income Tax Appellate Tribunal (ITAT), 'A' Bench, Chennai, in ITA No.314/Mds/2016, pertaining to the Assessment Year 2013-14. The appeal was filed by the Revenue against the assessee, Shri R. Elangovan. The core of the dispute involved cash found at the assessee's residence and the ITAT's decision to delete additions made by the assessing officer.

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 Appellate Tribunal is justified in presuming that the cash found at the residence of the assessee belongs to all the seven companies in which he is the director, which is merely a presumption and not based on any evidence or finding which is leading to perversity? (Question of law and fact, concerning the presumption of ownership of cash). 2. Whether, on the facts and in the circumstances of the case, the Appellate Tribunal is justified in deleting the addition when the assessee has not reconciled the cash found during the assessment proceedings or during appellate proceedings? (Question of law and fact, concerning the deletion of addition without reconciliation). Assessee's contentions: Not recorded in the judgment. Revenue's contentions: The Revenue argued that the ITAT's presumption regarding the cash belonging to the seven companies was perverse, lacking evidence. They also contended that the ITAT was not justified in deleting the addition as the assessee failed to reconcile the cash found.

Which sections of the Income-tax Act were involved?

Section 260A

AI-generated summary — verify with the full judgment below

Judgt. dt. 5.9.19 in T.C.A.653/19 PCIT v. R.Elangovan 1/4 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 5.9.2019 CORAM THE HON'BLE DR.JUSTICE VINEET KOTHARI AND THE HON'BLE MR.JUSTICE C.SARAVANAN Tax Case (Appeal) No.653 of 2019 Principal Commissioner of Income Tax 1 No.63, Race Course Road, Coimbatore. Appellant Vs. Shri.R.Elangovan PAN: AAD PE 1841 Q Respondent Tax Case Appeal filed under Section 260A of the Income Tax Act, 1961 against the order of the Income Tax Appellate Tribunal, 'A' Bench, Chennai, dated 19.5.2016 made in ITA No.314/Mds/2016. For Appellant : Mr.T.R.Senthilkumar Senior Standing Counsel assisted by Ms.Usha Rani, Jr. Standing Counsel J U D G M E N T (Delivered by DR.VINEET KOTHARI,J) This Tax Case Appeal has been filed by the Revenue, calling in question the correctness of the order passed by the Income Tax Appellate Tribunal, 'A' Bench, Chennai, dated 19.5.2016 made in ITA No.314/Mds/2016, for the Assessment Year 2013-14, by raising the following substantial questions of law: http://www.judis.nic.in Judgt. dt. 5.9.19 in T.C.A.653/19 PCIT v. R.Elangovan 2/4 "(i) Whether, on the facts and in the circumstances of the case, the Appellate Tribunal is justified in presuming that the cash found at the residence of the assessee belongs to all the seven companies in which he is the director, which is merely a presumption and not based on any evidence or finding which is leading to perversity? (ii) Whether, on the facts and in the circumstances of the case, the Appellate Tribunal is justified in deleting the addition when the assessee has not reconciled the cash found during the assessment proceedings or during appellate proceedings?" 2. When the matter is taken up for admission, learned Senior Standing Counsel brought to our notice the Circular instruction issued by the Central Board of Direct Taxes vide Circular No.17/2019 dated 8th August 2019, 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). http://www.judis.nic.in Judgt. dt. 5.9.19 in T.C.A.653/19 PCIT v. R.Elangovan 3/4 3. In the instant case, the tax effect is said to be less than the monetary limit imposed and therefore, the Appeal filed by the Revenue is dismissed, as withdrawn, keeping open the substantial questions of law for determination in appropriate cases. No costs. (V.K.,J.) (C.S.N.,J.) 5.9.2019 Index : Yes/No Internet : Yes/No ssk. To 1. Principal Commissioner of Income Tax 1 No.63, Race Course Road, Coimbatore. 2. Income Tax Appellate Tribunal, 'A' Bench, Chennai. 3. The Asst. Commissioner of Income Tax, Central Circle I, Coimbatore. http://www.judis.nic.in Judgt. dt. 5.9.19 in T.C.A.653/19 PCIT v. R.Elangovan 4/4 DR.VINEET KOTHARI, J. and C.SARAVANAN, J. ssk. T C (Appeal) No.653 of 2019 5.9.2019. http://www.judis.nic.in

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