PRINCIPAL COMMISSIONER OF IN vs. M/S.KAILASH SHIPPING SERVICE

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TCA/67/2021HC Madras27 January 2021Bench: Hon`ble Mr Justice T. S. SIVAGNANAM4 pages
AI SummaryDismissed

What did the High Court hold?

The High Court dismissed the appeal filed by the Revenue. The dismissal was based on the submission made by the Revenue's counsel regarding the low tax effect, citing CBDT Circular No.17/2019. The Court noted that the tax effect in this case was less than the threshold limit stipulated in the circular. Consequently, the substantial question of law raised by the Revenue was left undecided. The Court granted liberty to the Revenue to file a petition for restoration of the appeal if the tax effect was found to be above the threshold limit, allowing it to be heard and decided on merits. No costs were imposed. The operative direction was to dismiss the appeal.

What were the facts?

The Revenue, represented by the Principal Commissioner of Income Tax, Corporate Circle 4(2), Chennai, filed an appeal under Section 260A of the Income Tax Act, 1961, against an order dated 24.3.2017 passed by the Income Tax Appellate Tribunal (ITAT), Chennai 'C' Bench. The appeal pertains to the assessment year 2012-13. The dispute involves a deduction of Rs.1,40,26,353/- claimed by the assessee, M/s. Kailash Shipping Services Pvt. Ltd., Chennai, under Section 80IA of the Act. The ITAT had allowed this deduction, holding that a container freight station constituted an eligible infrastructure facility, specifically an 'inland port' as defined under Section 80IA(4). The Revenue challenged this finding before the High Court.

What were the issues?

1. Whether, on the facts and in the circumstances of the case and in law, the Tribunal is correct in law in allowing deduction of Rs.1,40,26,353/- claimed under Section 80IA of the Income Tax Act on container freight station holding it to be an eligible infrastructure facility being 'inland port' defined under Sub-Section (4) of Section 80IA? Assessee's Contentions: The judgment does not record any specific contentions made by the assessee. The assessee's counsel accepted notice and was present. Revenue's Contentions: The Revenue's learned Standing Counsel submitted that the appeal was not being pursued due to low tax effect, citing CBDT Circular No.17/2019 which increased the monetary limit for appeals before the High Court to Rs.1 Crore. The tax effect in this case was stated to be below this threshold.

Which sections of the Income-tax Act were involved?

Section 80IA,Section 260A

AI-generated summary — verify with the full judgment below

TCA.No.67 of 2021 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 27.1.2021 CORAM THE HONOURABLE MR.JUSTICE T.S.SIVAGNANAM and THE HONOURABLE MS.JUSTICE R.N.MANJULA Tax Case Appeal No.67 of 2021

The Principal Commissioner of Income Tax, Corporate Circle 4(2), Chennai-34 ...Appellant Vs M/s.Kailash Shipping Services Pvt. Ltd., Chennai-18 ...Respondent APPEAL under Section 260A of the Income Tax Act, 1961 against the order dated 24.3.2017 passed by the Income Tax Appellate Tribunal, 'C' Bench, Chennai made in I.T.A.No.2624/Mds/2016 for the assessment year 2012-13. For Appellant: Mr.Karthik Ranganathan, SC For Respondent : Mr.S.Sankara Narayanan Judgment was delivered by

T.S.SIVAGNANAM

This appeal has been filed by the Revenue under Section 260A of 1/4 https://www.mhc.tn.gov.in/judis/ TCA.No.67 of 2021 the Income Tax Act, 1961 ('the Act' for brevity) challenging the order dated 24.3.2017 made in I.T.A.No.2624/Mds/2016 on the file of the Income Tax Appellate Tribunal, Chennai 'C' Bench ('the Tribunal' for brevity) for the assessment year 2012-13. 2. The Revenue has filed this appeal by raising the following substantial question of law: “Whether, on the facts and in the circumstances of the case and in law, the Tribunal is correct in law in allowing deduction of Rs.1,40,26,353/- claimed under Section 80IA of the Income Tax Act on container freight station holding it to be an eligible infrastructure facility being 'inland port' defined under Sub-Section (4) of Section 80IA?” 3. We have heard Mr.Karthik Ranganathan, learned Standing Counsel appearing for the appellant/Revenue and Mr.S.Sankara Narayanan, learned counsel accepting notice for the respondent/ assessee. 4. The learned Standing Counsel for the appellant submits that the above appeal is not pursued by the Revenue on account of the low tax effect in terms of Circular No.17/2019 dated 08.8.2019 issued by the Central Board of Direct Taxes. By the said Circular, the monetary limit for filing or pursuing an appeal before the High Court has been 2/4 https://www.mhc.tn.gov.in/judis/ TCA.No.67 of 2021 increased to Rs.1 Crore. It is further submitted that the tax effect in this case is less than the threshold limit. 5. In the light of the said submissions, the above tax case appeal is dismissed on account of the low tax effect. The substantial question of law raised is left open. In the event the tax effect is above the threshold limit fixed in the said circular, liberty is granted to the Revenue to file a petition before this Court to restore the appeal to be heard and decided on merits. No costs. 27.1.2021

To The Income Tax Appellate Tribunal, 'C' Bench, Chennai. RS 3/4 https://www.mhc.tn.gov.in/judis/ TCA.No.67 of 2021 T.S.SIVAGNANAM,J AND R.N.MANJULA,J RS

TCA.No.67 of 2021 27.1.2021 4/4 https://www.mhc.tn.gov.in/judis/

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