THE COMMISSIONER OF INCOME vs. A.P. BEGAN (HUF)

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TCA/714/2016HC Madras11 July 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 Revenue brought to the court's notice 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 learned counsel for the Revenue submitted that the tax effect in the present appeal was less than this threshold limit. Consequently, the High Court, in light of the submission regarding the tax effect being below the monetary limit, dismissed the appeal as withdrawn. The court explicitly stated that the substantial questions of law were kept open for determination in an appropriate case. No costs were awarded.

What were the facts?

This case involves an appeal by the Commissioner of Income Tax, Chennai (the Revenue) against an order dated 27.11.2015 passed by the Income Tax Appellate Tribunal (ITAT), Madras 'C' Bench, Chennai. The appeal concerns the assessment of sale proceeds of property and capital gains. The assessee is A.P. Began (HUF). The substantial questions of law were admitted by the High Court on 05.10.2016. The appeal was filed under Section 260A of the Income Tax Act, 1961. The procedural history relevant to the disposal of the appeal is the submission by the Revenue regarding a CBDT Circular.

What were the issues?

The High Court was to decide four substantial questions of law: 1. Whether the Tribunal was correct in holding that the sale proceeds of the property could not be assessed in the hands of AR Pandurangan (HUF). 2. Whether the Tribunal's finding that Section 171 of the Income Tax Act would not apply to the estate of AR Pandurangan (HUF) due to it not being assessed to tax previously was proper. 3. Whether the Tribunal was right in not considering that a partial partition cannot be considered under Section 171 of the Income Tax Act. 4. Whether the Tribunal was correct in holding that capital gains could not be assessed in the hands of the larger HUF in the case of AR Pandurangan (HUF) or the assessee A.P. Began (HUF). The Revenue argued that the Tribunal erred in its findings on these issues. The judgment does not record specific arguments from the assessee's side regarding these questions, nor does it mention any specific authorities, circulars, or precedents relied upon by either party during the hearing that led to the final order.

Which sections of the Income-tax Act were involved?

Section 260A,Section 171

AI-generated summary — verify with the full judgment below

T.C.A.No.714 of 2016 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 11.07.2022 CORAM THE HONOURABLE MR. JUSTICE R. MAHADEVAN AND THE HONOURABLE MR. JUSTICE MOHAMMED SHAFFIQ T.C.A.No.714 of 2016 The Commissioner of Income Tax, Chennai

.. Appellant Versus A.P.Began (HUF) 14, Vellala Street, Ayanambakkam, Chennai 602 102.

.. Respondent Tax Case Appeal filed under Section 260 A of the Income Tax Act, 1961 against the order of the Income Tax Appellate Tribunal, Madras 'C' Bench, Chennai, dated 27.11.2015 in I.T.A.No.2702/Mds/2014. For Appellant

:Mr. T. Ravikumar Senior Standing counsel For Respondent : Mr. R. Sivaraman

1/4 https://www.mhc.tn.gov.in/judis T.C.A.No.714 of 2016 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 27.11.2015 passed by the Income Tax Appellate Tribunal Madras 'C' Bench, Chennai in I.T.A.No.2702/Mds/2014. 2. On 05.10.2016, this tax case appeal was 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 sale proceeds of the property cannot be assessed in the hands of AR Pandurangan (HUF)? 2. Whether the finding of the Tribunal is proper by holding that the provisions of Section 171 of the Income Tax Act would not apply to the estate of AR Pandurangan (HUF) since it was not assessed to tax hitherto? 3. Whether on the facts and in the circumstances of 2/4 https://www.mhc.tn.gov.in/judis T.C.A.No.714 of 2016 the case, the Tribunal was right in not considering the fact that partial partition cannot be considered u/s.171 of the Income Tax Act? 4. Whether on the facts and in the circumstances of the case, the Tribunal was right in holding that capital gains cannot be assessed in the hands of larger HUF in the case of AR Pandurangan (HUF) or in the case of the assessee A.P. Began (HUF)?” 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 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 3/4 https://www.mhc.tn.gov.in/judis T.C.A.No.714 of 2016 R. MAHADEVAN, J. AND MOHAMMED SHAFFIQ, J. msr withdrawn, keeping open the substantial questions of law for determination in an appropriate case. No costs. [R.M.D,J.] [M.S.Q., J.] 11.07.2022 msr

Index : Yes / No To The Income Tax Appellate Tribunal, Madras 'C' Bench, Chennai T.C.A.No.714 of 2016 4/4 https://www.mhc.tn.gov.in/judis

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