THE COMMISSIONER OF INCOME T vs. M/S SIFY COMMUNICATION LTD

TCA/73/2017HC 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 merits. The Revenue brought to the court's notice CBDT Circular No.17/2019, which 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/-. The Revenue submitted that the tax effect in these appeals was less than this threshold limit. Consequently, the High Court dismissed the present appeals as withdrawn, in light of the Revenue's submission regarding the tax effect being below the monetary limit. 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?

The Commissioner of Income Tax, Chennai (Revenue) filed four Tax Case Appeals (TCA.Nos.73, 74, 75 and 76 of 2017) before the High Court of Judicature at Madras. These appeals challenged the orders dated 21.08.2015 passed by the Income Tax Appellate Tribunal (ITAT), Madras “B” Bench. The appeals pertained to assessment years 2001-02, 2002-03, 2004-05, and 2005-06, concerning M/s. Sify Communications Ltd. (Assessee). The High Court admitted these appeals on substantial questions of law on 03.04.2017.

What were the issues?

The High Court was to decide two substantial questions of law: 1. Whether, on the facts and circumstances of the case, the Tribunal was right in holding that raising of invoices does not result in earning of income? (Question of law). 2. Whether the Tribunal was right in deleting the addition of unearned income? (Question of mixed law and fact). The Revenue argued that the Tribunal erred in its findings on these issues. The Assessee's contentions are not recorded in the judgment. The judgment does not mention any specific authorities, circulars, or precedents relied upon by either party for these issues.

Which sections of the Income-tax Act were involved?

Section 260A

AI-generated summary — verify with the full judgment below

TCA.Nos.73, 74, 75 and 76 of 2017 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.Nos. 73, 74, 75 and 76 of 2017 The Commissioner of Income Tax, Chennai .. Appellant in all appeals Versus M/s.Sify Communications Ltd., II Floor, Tidel Park, Building 4, Canal Bank Road, Taramani, Chennai 600 113. .. Respondent in all appeals Tax Case Appeals filed under Section 260A of the Income Tax Act, 1961 against the order of the Income Tax Appellate Tribunal, Madras “B” Bench, Chennai, dated 21.08.2015 passed in respective ITA.Nos.1229,1230, 1231 and 1232/Mds/2015 for the respective assessment years 2001-02, 2002- 03, 2004-05 and 2005-06. For Appellant in all cases : Mr. T. Ravikumar Standing counsel For Respondent in all cases : Mr.R. Venkata Narayanan for Mr.Vijayaraghavan 1/4 https://www.mhc.tn.gov.in/judis TCA.Nos.73, 74, 75 and 76 of 2017 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 21.08.2015 passed by the Income Tax Appellate Tribunal, Madras “B” Bench, Chennai, in respective ITA.Nos.1229, 1230, 1231 and 1232/Mds/2015 relating to respective assessment years 2001-02, 2002-03, 2004-05 and 2005-06. 2. On 03.04.2017, the aforesaid tax case appeals were admitted on the following substantial questions of law; "1.Whether on the facts and circumstances of the case, the Tribunal was right in holding that raising of invoices does not result in earning of income? 2. Whether the Tribunal was right in deleting the addition of unearned income?" 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 2/4 https://www.mhc.tn.gov.in/judis TCA.Nos.73, 74, 75 and 76 of 2017 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 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 3/4 https://www.mhc.tn.gov.in/judis TCA.Nos.73, 74, 75 and 76 of 2017 R. MAHADEVAN, J. and MOHAMMED SHAFFIQ, J. msr To 1. The Income Tax Officer (OSD) Company Circle VI (3), Chennai. 2. The Commissioner of Income Tax (Appeals)-15, Chennai 600 034. 3. The Income Tax Appellate Tribunal, Madras “B” Bench, Chennai T.C.A.Nos. 73, 74, 75 and 76 of 2017 22.08.2022 4/4 https://www.mhc.tn.gov.in/judis

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