PRINCIPAL COMMISSIONER OF vs. SELVI.J.JAYALALITHAA(Died)

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TCA/683/2018HC Madras30 August 2022Bench: Hon`ble Mr Justice R. MAHADEVAN4 pages
AI SummaryWithdrawn

What did the High Court hold?

The High Court noted that the Revenue's counsel brought to its attention CBDT Circular No.17/2019, dated 08.08.2019. This circular stipulates that appeals shall not be filed or pursued by the Department before the High Court if the tax effect does not exceed Rs.1,00,00,000/- (Rupees One Crore). The counsel submitted that the tax effect in the present appeal was less than this threshold limit. In light of this submission, the Court found that the appeal, where the tax effect was below the monetary limit, was to be dismissed as withdrawn. The substantial questions of law were kept open for determination in an appropriate case. No costs were awarded.

What were the facts?

This Tax Case Appeal (TCA) was filed by the Principal Commissioner of Wealth Tax, Chennai (the Revenue) against an order dated 30.09.2016 passed by the Income Tax Appellate Tribunal (ITAT), Madras 'B' Bench. The appeal pertains to Assessment Year 1996-97 and challenges the ITAT's decision in WTA.No.20/Mds/2008. The original assessee was Selvi. J. Jayalalithaa (deceased), and respondents 2 and 3 are her legal heirs, Ms. J. Deepa and Mr. J. Deepak, who were impleaded later. The appeal was filed under Section 27 of the Wealth Tax Act, 1957.

What were the issues?

The Tribunal had to decide the following substantial questions of law: 1. Whether the Appellate Tribunal was correct in condoning the inordinate delay of 2255 days in filing the appeal by the Assessee before the ITAT? 2. Whether the Appellate Tribunal was correct in concluding that the reasons cited by the Assessee for the delay justified the existence of "sufficient cause" and that the delay was not wilful? 3. Whether, on the facts and in the circumstances, the Appellate Tribunal was correct in quashing the order of the learned CIT passed under section 25(2) of the Wealth Tax Act, 1957, based on its earlier income tax order dated 11.01.2008, without going into the merits of the issues discussed in that order? 4. Whether the Appellate Tribunal was correct in quashing the Wealth Tax order based on its earlier income tax order dated 11.01.2008, which was itself the subject matter of an appeal pending in TCA.No.552 of 2008 before the Hon'ble High Court of Madras? The Revenue argued that the ITAT erred in condoning the delay and in quashing the CIT's order based on an income tax order that was under appeal. The judgment does not record specific arguments from the Assessee's side regarding the delay or the merits of the case. However, the Revenue's counsel brought to the court's notice a CBDT Circular No.17/2019.

Which sections of the Income-tax Act were involved?

Section 25(2),Section 27

AI-generated summary — verify with the full judgment below

TCA.No.683 of 2018 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 30.08.2022 CORAM

THE HONOURABLE MR. JUSTICE R. MAHADEVAN and THE HONOURABLE MR. JUSTICE MOHAMMED SHAFFIQ T.C.A.No. 683 of 2018 Principal Commissioner of Wealth Tax, Central 2, No.108, Mahatma Gandhi Road, Chennai.

.. Appellant Versus 1. Selvi. J. Jayalalithaa (deceased) 36, Poes Garden, Chennai 600 086. PAN: AAF PJ 8986 2. Ms.J. Deepa D/o.Mr.Jayakumar, Old No.9, New No.13, Sivagnanam Street, T.Nagar, Chennai 600 017. 3. Mr.J. Deepak, D/o, Mr. Jayakumar, Old No.9, New No.13, Sivagnanam Street, T.Nagar, Chennai 600 017. (R2 & R3 impleaded as per order of this Court dated 30.08.2022 in CMP.Nos.4532, 4632 and 4628/2022 in TCA.No.683/2018)

.. Respondents 1/4 https://www.mhc.tn.gov.in/judis TCA.No.683 of 2018 Tax Case Appeal filed under Section 27 of the Wealth Tax Act, 1957 against the order of the Income Tax Appellate Tribunal Madras 'B' Bench, dated 30.09.2016 passed in WTA.No.20/Mds/2008 in respect of Assessment Year 1996-97. For Appellant : Mr. Karthik Ranganathan Standing Counsel For Respondents : Mr.M.Sathyakumar for R2 Mr. S.L.Sudarsanam for R3 JUDGMENT (Judgment of the Court was delivered by R. MAHADEVAN, J.) This Tax Case Appeal has been filed by the appellant / revenue, questioning the correctness of the order dated 30.09.2016 passed by the Income Tax Appellate Tribunal, Madras 'B' Bench, in WTA.No.20/Mds/2008 for the assessment year 1996-97, raising the following substantial questions of law: ''1. Whether the Appellate Tribunal is correct in law in condoning the inordinate delay of 2255 days in filing the appeal by the Assessee before the ITAT? 2. Whether the Appellate Tribunal is correct in law in reaching to the conclusion that the reasons cited by the Appellant for the delay in filing the appeal do justify 2/4 https://www.mhc.tn.gov.in/judis TCA.No.683 of 2018 existing of “sufficient cause” and that the delay is not wilful? 3. Whether on the facts and in the circumstances of the case, the Appellate Tribunal is correct in quashing the order of the learned CIT passed under section 25(2) of the Wealth Tax Act, 1957, based on its earlier income tax order dated 11.01.2008, without going into the merits of the issues discussed in the said order? 4. Whether the Appellate Tribunal is correct in quashing the Wealth Tax order based on tis earlier income tax order dated 11.01.2008 which is the subject matter of appeal pending in TCA.No.552 of 2008 before the Hon'ble High Court of Madras?.” 2. When the matter was taken up for consideration, the learned counsel for the appellant / Revenue brought to the notice of this court the Circular No.17/2019 dated 08.08.2019 issued by the Central Board Direct Taxes, 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). It is also submitted that the tax effect in this appeal is less than the threshold limit. 3/4 https://www.mhc.tn.gov.in/judis TCA.No.683 of 2018 R. MAHADEVAN, J. and MOHAMMED SHAFFIQ, J. msr 3. In the light of the aforesaid submissions made by the learned counsel for the appellant / Revenue, the present appeal, wherein, the tax effect is said to be less than the monetary limit imposed, is dismissed as withdrawn, keeping open the substantial questions of law for determination in an appropriate case. No costs. [R.M.D,J.] [M.S.Q., J.] 30.08.2022 msr

Index : Yes / No To 1.The Deputy Commissioner of Wealth Tax, Central Circle II(2), Chennai-34. 2. The Commissioner of Income Tax, (Central) VIII, Chennai-34 3. The Income Tax Appellate Tribunal Madras 'B' Bench, Chennai.

T.C.A.No. 683 of 2018 4/4 https://www.mhc.tn.gov.in/judis

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