COMMISSIONER OF INCOME TAX vs. SHRI N.KRISHNAMURTHY

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TCA/703/2015HC Madras08 August 2022Bench: HONOURABLE MR. JUSTICE R. MAHADEVAN4 pages
AI SummaryWithdrawn

What did the High Court hold?

The High Court noted that the Revenue had brought to its attention CBDT Circular No. 17/2019, which mandates that appeals shall not be filed or pursued before the High Court if the tax effect does not exceed Rs. 1,00,00,000/-. The Revenue further submitted that the tax effect in the present appeals was less than this stipulated threshold limit. In light of this submission by the Revenue, the High Court dismissed the present appeals as withdrawn. The Court explicitly stated that the substantial question of law is kept open for determination in an appropriate case. No costs were awarded.

What were the facts?

The appeals were filed by the Revenue against the order of the Income Tax Appellate Tribunal (ITAT) dated 25.07.2014. The ITAT had passed orders in ITA Nos. 907, 908, 909, and 910/Mds/2014 for assessment years 2004-05 and 2005-06. The appeals concerned the deletion of penalties under Sections 271D and 271E of the Income Tax Act, 1961, relating to cash loan transactions. The High Court had admitted the appeals on a substantial question of law. Subsequently, during the hearing, the Revenue 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 these appeals was below this threshold.

What were the issues?

1. Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that it is a fit case for deletion of penalty under sections 271D and 271E on the ground that the cash loan transaction is genuine, when the assessee had not produced any details and had not substantiated the compelling circumstances to avail and repay the loan in cash in spite of the direction of the Tribunal in the earlier order? (Question of law/mixed fact and law, turning on Sections 271D and 271E). Assessee's Contentions: Not recorded in the judgment. Revenue's Contentions: The Revenue contended that the Tribunal erred in deleting the penalties under Sections 271D and 271E. They argued that the assessee had failed to produce necessary details and substantiate compelling circumstances for cash loan transactions, despite prior directions from the Tribunal. The Revenue also submitted that the tax effect in these appeals was below the threshold limit specified in CBDT Circular No. 17/2019, which mandates that appeals should not be filed or pursued in such cases.

Which sections of the Income-tax Act were involved?

Section 271D,Section 271E,Section 260A

AI-generated summary — verify with the full judgment below

TCA.Nos.703 to 706 of 2015 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 08.08.2022 CORAM

THE HONOURABLE MR. JUSTICE R. MAHADEVAN and THE HONOURABLE MR. JUSTICE MOHAMMED SHAFFIQ T.C.A.Nos. 703 to 706 of 2015 Commissioner of Income Tax, Chennai .. Appellant in all appeals Versus Shri N. Krishnamurthy,

22, Gilchrist Avenue, Chetpet, Chennai .. Respondent in all appeals Prayer : Tax Case Appeals filed under Section 260 A of the Income Tax Act, 1961 against the order of the Income Tax Appellate Tribunal Madras “C” Bench, dated 25.07.2014 passed in respective ITA.Nos.907, 908, 909 and 910/Mds/2014 for the respective Assessment Years 2004-05, 2005-06, 2004-05 and 2005-06. For Appellant in all appeals : Mr.T. Ravikumar Senior Standing Counsel For Respondent in all appeals: Mr. S. Sridhar 1/4 https://www.mhc.tn.gov.in/judis TCA.Nos.703 to 706 of 2015 COMMON JUDGMENT (Judgment of the Court was delivered by R. MAHADEVAN, J.) These Tax Case Appeals have been filed by the appellant / revenue, questioning the correctness of the order dated 25.07.2014 passed by the Income Tax Appellate Tribunal Madras “C” Bench, in ITA.Nos.907, 908, 909 and 910/Mds/2014 for the respective assessment years 2004-05, 2005-06, 2004-05 and 2005-06. 2. This Court, by order dated 28.09.2015 has admitted the aforesaid Tax Case Appeals on the following substantial question of law; ' Whether on the facts and in the circumstances of the case, the Tribunal was right in holding that it is a fit case for deletion of penalty under sections 271D and 271E on the ground that the cash loan transaction is genuine, when the assessee had not produced any details and had not substantiated the compelling circumstances to avail and repay the loan in cash in spite of the direction of the Tribunal in the earlier order?' 2/4 https://www.mhc.tn.gov.in/judis TCA.Nos.703 to 706 of 2015

3.

When the matters were 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 these appeals are less than the threshold limit. 4. In the light of the aforesaid submissions made by the learned counsel for the appellant / Revenue, the present appeals, wherein, the tax effect is said to be less than the monetary limit imposed, are dismissed as withdrawn, keeping open the substantial question of law for determination in an appropriate case. No costs. [R.M.D,J.] [M.S.Q., J.] 08.08.2022 msr

Index : Yes / No 3/4 https://www.mhc.tn.gov.in/judis TCA.Nos.703 to 706 of 2015 R. MAHADEVAN, J. and MOHAMMED SHAFFIQ, J. msr To 1. Commissioner of Income Tax, Chennai. 2. The Income Tax Appellate Tribunal Madras “C” Bench Chennai. 3. The Additional Commissioner of Income Tax, Range XVI, Chennai. 4. The Commissioner of Income Tax (Appeals)-VI, Chennai. T.C.A.Nos. 703 to 706 of 2015 08.08.2022 4/4 https://www.mhc.tn.gov.in/judis

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