THE COMMISSIONER OF INCOME vs. M/S. CREST POINT CONSULTAN

PDF · subscribers
TCA/702/2015HC Madras22 August 2022Bench: Hon`ble Mr Justice R. MAHADEVAN4 pages
AI SummaryWithdrawn

What did the High Court hold?

The High Court did not decide the substantial questions of law on their merits. Instead, the Court noted the submission by the Revenue's counsel regarding CBDT Circular No. 17/2019, which mandates that appeals should not be filed or pursued if the tax effect is below Rs. 1,00,00,000/-. The Revenue stated that the tax effect in the present appeal was less than this prescribed monetary limit. Consequently, the High Court dismissed the appeal as withdrawn, explicitly stating that the substantial questions of law were kept open for determination in an appropriate case. No costs were awarded.

What were the facts?

The Revenue (Commissioner of Income Tax, Coimbatore) filed a Tax Case Appeal before the High Court of Judicature at Madras against an order dated 20.02.2015 passed by the Income Tax Appellate Tribunal (ITAT), Madras 'B' Bench. The appeal pertained to assessment year 2007-08 and challenged the ITAT's decision regarding a disallowance made under Section 40(a)(ia) of the Income Tax Act, 1961. The High Court admitted the appeal on substantial questions of law on 10.08.2015. Subsequently, during the hearing, the Revenue's counsel brought to the court's attention CBDT Circular No. 17/2019, which stipulates that appeals shall not be filed or pursued if the tax effect does not exceed Rs. 1,00,00,000/-. The Revenue submitted that the tax effect in this appeal was below this threshold.

What were the issues?

The High Court had to decide the following substantial questions of law: 1. Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the disallowance made under section 40(a)(ia) is not warranted, if the payment is made within the accounting year? 2. Is not the finding of the Tribunal bad by holding that the Second Proviso to Section 40(a)(ia) is retrospective in operation? The Revenue's contentions were not explicitly detailed in the judgment, but their appeal was based on challenging the Tribunal's findings on the above questions. The judgment does not record any specific arguments made by the assessee (M/s. Crest Point Consultants Pvt. Ltd.). The Revenue relied on Circular No. 17/2019 issued by the CBDT.

Which sections of the Income-tax Act were involved?

Section 40(a)(ia),Section 260-A

AI-generated summary — verify with the full judgment below

TCA.No.702 of 2015 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 22.08.2022 CORAM

THE HONOURABLE MR. JUSTICE R. MAHADEVAN and THE HONOURABLE MR. JUSTICE MOHAMMED SHAFFIQ T.C.A.No. 702 of 2015 Commissioner of Income Tax, Coimbatore

.. Appellant Versus M/s.Crest Point Consultants Pvt. Ltd., New No.7, Old No.4, Dhandayuthapani Nagar 1st Street, Kotturpuram, Chennai - 600 085.

.. Respondent (PAN No.AABC2474R) Tax Case Appeal filed under Section 260-A of the Income Tax Act, 1961 against the order of the Income Tax Appellate Tribunal Madras “B” Bench, Chennai, dated 20.2.2015 passed in I.T.A.No.1140/Mds/2014 in respect of assessment year 2007-08. For Appellant : M/s.T. Ravikumar

Standing Counsel

1/4 https://www.mhc.tn.gov.in/judis TCA.No.702 of 2015

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 20.02.2015 passed by the Income Tax Appellate Tribunal Madras “B” Bench, Chennai, in I.T.A.No.1140/Mds/2014 for the assessment year 2007-08. 2. On 10.08.2015, this tax case appeal is admitted by this Court on the following substantial questions of law; ' 1. Whether on the facts and in the circumstances of the case, the Tribunal was right in holding that the disallowance made under section 40(a)(ia) is not warranted, if the payment is made within the accounting year? And 2. Is not the finding of the Tribunal bad by holding that the Second Proviso to Section 40(a)(ia) is retrospective in operation?” 3. 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 2/4 https://www.mhc.tn.gov.in/judis TCA.No.702 of 2015 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. 4. 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.] 22.08.2022 msr

Index : Yes / No To 1. The Assistant Commissioner of Income Tax, Company Circle- I(3), Chennai-34. 2. The Commissioner of Income Tax (A)(C)-II, Chennai 3. The Income Tax Appellate Tribunal Madras “B” Bench, Chennai. R. MAHADEVAN, J. and 3/4 https://www.mhc.tn.gov.in/judis TCA.No.702 of 2015 MOHAMMED SHAFFIQ, J. msr T.C.A.No. 702 of 2015 22.08.2022 4/4 https://www.mhc.tn.gov.in/judis

More judgments on Section 40(a)(ia)

All 7,300 judgments and leading authorities on Section 40(a)(ia) →

Recent GST High Court judgments

Search GST case law →