COMMISSIONER OF INCOME TAX vs. M/S.SRI SAKTHI COLD STORAGE

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TCA/716/2019HC Madras16 December 2019Bench: Hon`ble Mr Justice N. KIRUBAKARAN6 pages
AI SummaryDismissed

What did the High Court hold?

The High Court dismissed the Tax Case Appeals filed by the Revenue on the ground of tax effect. The Court referred to Circular No.17/2019 dated 08.08.2019, which stipulates that appeals before the High Court should have a monetary limit of Rs.1 crore. As the tax effect in these appeals was less than Rs.1 crore, the Court found it appropriate to dismiss the appeals. However, the substantial question of law framed by the Court was left open. The Revenue was granted liberty to mention the case before the Court to restore the appeals for hearing and decision on merits if the tax effect was found to be above the limit fixed in the circular. No costs were imposed. The connected Miscellaneous Petitions were closed.

What were the facts?

The Revenue (Commissioner of Income Tax, Chennai) filed three Tax Case Appeals (TCA.Nos.716, 718 & 719 of 2019) before the High Court of Judicature at Madras. These appeals challenged the order dated 03.02.2016 passed by the Income Tax Appellate Tribunal (ITAT), Chennai 'B' Bench, in ITA.No.1817 to 1819/Mds/2015. The ITAT had dismissed the appeals filed by the Revenue against the orders of the CIT(A)-15. The CIT(A) orders, dated 29.05.2015, were passed in ITA Nos.217, 218 & 220/CIT (A)-15/13-14, concerning assessment years 2002-03 to 2004-05. The Revenue's appeals to the High Court were admitted on a substantial question of law.

What were the issues?

1. Whether, on the facts and in the circumstances of the case, the Tribunal was justified in granting deduction under Section 80IB of the Income Tax Act, 1961, when the assessee had not filed its audit report before the completion of assessment? 2. Whether the activity of cold storage of sea foods involves manufacture or production of any article or thing for the purpose of Section 80IB? 3. Whether the assessee had earned any income from the cold storage business to be eligible for deduction under Section 80IB? The Revenue contended that the tax effect in these cases was less than Rs.1 crore and therefore, the appeals were covered by Circular No.17/2019 dated 08.08.2019, which sets the monetary limit for filing appeals before the High Court at Rs.1 crore. Consequently, the appeals should be dismissed. The assessee did not record any specific arguments in the judgment.

Which sections of the Income-tax Act were involved?

Section 80IB,Section 260A,Section 143(3),Section 147,Section 250

AI-generated summary — verify with the full judgment below

T.C.A.Nos.716, 718 & 719 of 2019 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 16.12.2019 CORAM : THE HONOURABLE MR.JUSTICE N.KIRUBAKARAN and THE HONOURABLE MR.JUSTICE P.VELMURUGAN T.C.A.Nos.716, 718 & 719 of 2019 and C.M.P.Nos.21094 & 21100 of 2019 Commissioner of Income Tax, Chennai. ... Appellant (in all the appeals) Vs M/s.Sri Sakthi Cold Storage Pvt. Ltd., 6/9, Nehru Nagar III Street, Adyar, Chennai 600 020. PAN: AABCS2172H ... Respondent (in all the appeals) PRAYER in TCA.No.716 of 2019: Appeal under Section 260A of the Income Tax Act, 1961 against the order of the Income Tax Appellate Tribunal, Madras “B” Bench, dated 03.02.2016 passed in ITA.No.1817/Mds/2015. PRAYER in TCA.No.718 of 2019: Appeal under Section 260A of the Income Tax Act, 1961 against the order of the Income Tax Appellate 1/6 http://www.judis.nic.in T.C.A.Nos.716, 718 & 719 of 2019 Tribunal, Madras “B” Bench, dated 03.02.2016 passed in ITA.No.1819/Mds/2015. PRAYER in TCA.No.719 of 2019: Appeal under Section 260A of the Income Tax Act, 1961 against the order of the Income Tax Appellate Tribunal, Madras “B” Bench, dated 03.02.2016 passed in ITA.No.1818/Mds/2015. For Appellant :Mr.J.Narayanaswamy (in all the appeals) Senior standing counsel For Respondent :Mr.A.S.Sriraman (in all the appeals) C O M M O N J U D G M E N T (Judgment of the Court was delivered by N.KIRUBAKARAN, J) These Tax Case Appeals have been preferred by the Revenue against the order dated 03.02.2016 passed in ITA.No.1817 to 1819/Mds/2015 on the file of the Income Tax Appellate Tribunal, Chennai 'B' Bench for the assessment years 2002-03 to 2004-05 2.The impugned order was filed by the Revenue aggrieved by the orders of the CIT(A)-15, dated 29.05.2015 in ITA Nos.217, 218 & 2/6 http://www.judis.nic.in T.C.A.Nos.716, 718 & 719 of 2019 220/CIT (A)-15/13-14 under Section 143(3) r.w.s 147 & 250 of the Income Tax Act, 1961, where the Tribunal rejected the plea of the Revenue and dismissed the Appeals. 3.These Appeals are admitted on the following substantial question of law : “Whether on the facts and in the circumstances of the case, the Tribunal was justified in granting deduction u/s.80IB when the assessee had not filed its audit report before completion of assessment and when the activity of cold storage of sea foods does not involve manufacture or production of any article or thing and when the assessee had not earned any income from cold storage business? " 4.Mr.J.Narayanaswamy, learned Senior Standing Counsel appearing on behalf of the appellant would submit that the tax effect in these cases are less than Rs.1 crore and is covered by Circular No.17/2019 dated 08.08.2019 issued by the Director, Central Board of Direct Taxes, Department of Revenue, Ministry of Finance, Government of India, Delhi. As per the said circular, the monetary limit to file an appeal before the High Court is fixed at Rs.1 crore. In these cases, tax effect is less than Rs.1 crore and therefore, these cases have to be dismissed. 3/6 http://www.judis.nic.in T.C.A.Nos.716, 718 & 719 of 2019 5.This Court perused the circular dated 08.08.2019 and Paragraph No.2 of the said Circular, which prescribes monetary limit for filing appeal is usefully extracted as follows: 2.As a step towards further management of litigation, it has been decided by the Board that monetary limits for filing of appeals in income-tax cases be enhanced further through amendment in Para 3 of the Circular mentioned above and accordingly, the table for monetary limits specified in Para 3 of the Circular shall read as follows: S.No. Appeals / SLPs in Income- tax matters Monetary Limit (Rs.) 1. Before Appeallate Tribunal 50,00,000 2. Before High Court 1,00,00,000 3. Before Supreme Court 2,00,00,000 6.In view of the submissions made by the learned counsel appearing on behalf of the appellant and also in view of the Circular No.17/2019 dated 08.08.2019 issued by the Director, Central Board of Direct Taxes, Delhi, these Tax Case Appeals are dismissed on account of tax effect. However, the substantial question of law framed is left 4/6 http://www.judis.nic.in T.C.A.Nos.716, 718 & 719 of 2019 open. In the event the tax effect is above the limit fixed in the said circular, liberty is granted to the Revenue to make a mention to this Court to restore the appeals to be heard and decided on merits. No costs. Consequently, connected Miscellaneous Petitions are closed. (NKKJ) (PVJ) 16.12.2019 sai To 1.The Commissioner of Income Tax, Chennai. 2.Income Tax Appellate Tribunal 'B' Bench, Chennai. 5/6 http://www.judis.nic.in T.C.A.Nos.716, 718 & 719 of 2019 N.KIRUBAKARAN, J. and P.VELMURUGAN

, J.

sai T.C.A.Nos.716, 718 & 719 of 2019 Dated : 16.12.2019 6/6 http://www.judis.nic.in

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