COMMISSIONER OF INCOME TAX C vs. M/S.VALLIAMMAI SOCIETY,

T.C.A.No.779 of 2019 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED 25.08.2022 CORAM THE HON'BLE Mr. JUSTICE R. MAHADEVAN AND THE HON'BLE Mr. JUSTICE MOHAMMED SHAFFIQ Tax Case Appeal No.779 of 2019 The Commissioner of Income Tax Central-I 108, Nungambakkam High Road Chennai 600 034

.. Appellant Vs. M/s.Valliammai Society 3, Veerasamy Street West Mambalam Chennai 600 033 PAN : AAA TV 2451 J .. Respondent Tax Case Appeal filed under Section 260A of the Income Tax Act, 1961 against the order dated 28.10.2013 passed by the Income Tax Appellate Tribunal, 'B' Bench, Chennai, in I.T.A.No.991/Mds/2013. For Appellant : Mr.J.Narayanaswamy

Standing Counsel For Respondent : Mr.G.Baskar 1/4 https://www.mhc.tn.gov.in/judis T.C.A.No.779 of 2019 J U D G M E N T (Judgment was delivered by R. MAHADEVAN, J.) This tax case appeal has been filed by the appellant/Revenue, calling in question the correctness of the order dated 28.10.2013 passed by the Income Tax Appellate Tribunal, 'B' Bench, Chennai, in I.T.A.No.991/Mds/2013, relating to the assessment year 2006-07. 2. By order dated 14.11.2019, this Court admitted the aforesaid tax case appeal on the following substantial questions of law : “1. Whether on the facts and in the circumstances of the case, the Appellate Tribunal was right in law in allowing the lease rental paid by the Trust to its Managing Trustee, which is a clear case diversion of funds for the benefit of prohibited members specified in Section 13 (1)(c) and also violation of Section 13(1)(c) of the Income Tax Act? 2. Whether on the facts and circumstances of the case, the Appellate Tribunal was right is relying on the order of the CIT (A) has not afforded any opportunity to the Assessing Officer before admitting additional evidence namely Rental Agreements and Lease Agreements which is violation of Rule 46A of the income Tax Rules, 1962? 3. Whether on the facts and in the circumstances of the case, the Appellate Tribunal was right in allowing the payments made by the Trust to Trustee and close relatives of the Managing Trustee, which is a clear case diversion of funds for the benefit of prohibited members specified in Section 13(3) and also violation of Section 13(1)(c) of the Income Tax Act? 2/4 https://www.mhc.tn.gov.in/judis T.C.A.No.779 of 2019 4. Whether on the facts and circumstances of the case, the Tribunal was right in dismissing the department appeals when the earlier years appeals are pending before the Hon'ble High Court?” 3. When the matter was taken up for consideration, the learned Standing 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 appeal 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 Standing Counsels 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.] 25.08.2022 Internet : Yes gya R. MAHADEVAN, J. 3/4 https://www.mhc.tn.gov.in/judis T.C.A.No.779 of 2019 AND MOHAMMED SHAFFIQ, J. gya To 1.The Assistant Commissioner of Income Tax Central Circle-I(3), Chennai 2.The Commissioner of Income Tax (Appeals)-II Chennai 3.The Income Tax Appellate Tribunal 'B' Bench, Chennai Tax Case Appeal No.779 of 2019 25.08.2022

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