PRINCIPAL COMMISSIONER OF vs. STAR INVESTMENT PVT LTD

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TCA/804/2017HC Madras03 September 2020Bench: HON`BLE DR.JUSTICE VINEET KOTHARI4 pages
AI SummaryWithdrawn

What did the High Court hold?

The High Court noted that the Revenue brought to its notice CBDT Circular No. 17/2019 dated 8 August 2019. This circular mandates that appeals shall not be filed or pursued by the Department before the High Court in cases where the tax effect does not exceed Rs. 1,00,00,000/-. In the present case, the tax effect was stated to be less than this monetary limit. Consequently, the High Court dismissed the appeal filed by the Revenue as withdrawn. The Court explicitly stated that the substantial questions of law remain open for determination in appropriate cases. No costs were awarded.

What were the facts?

The Revenue, represented by the Principal Commissioner of Income Tax, Chennai, filed a Tax Case Appeal against an order of the Income Tax Appellate Tribunal (ITAT), Madras 'C' Bench, dated 03.04.2017 in M.P.No.211/Mds/2016. The appeal challenges the ITAT's decision regarding a disallowance under Section 14A of the Income Tax Act, 1961. The assessee is M/s. Star Investment Pvt Ltd. The appeal was filed under Section 260A of the Income Tax Act, 1961. The High Court heard the matter via video conference.

What were the issues?

1. Whether the Appellate Tribunal was correct in holding that disallowance under Section 14A should not exceed the dividend earned during the year, when the provisions of the said section as well as Rule 3D do not provide for any such restriction? (Question of law) Assessee's Contentions: Not recorded in the judgment. Revenue's Contentions: The Revenue argued that the ITAT's decision was incorrect. The Revenue relied on the fact that the tax effect in the instant case was less than the monetary limit imposed by CBDT Circular No. 17/2019 dated 8 August 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/-.

Which sections of the Income-tax Act were involved?

Section 14A,Section 260A

AI-generated summary — verify with the full judgment below

Order dt.03.09.2020 in T.C.A.No.804 of 2017 Prl.Commr. Of I.T. Chennai vs.M/s.Star Investment P Ltd 1/4 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 03.09.2020 CORAM THE HON'BLE DR.JUSTICE VINEET KOTHARI AND THE HON'BLE MR.JUSTICE KRISHNAN RAMASAMY T.C.A.No.804 of 2017 Principal Commissioner of Income Tax 6 No.121, Nungambakkam High Road, Chennai 600 034 ... Appellant vs. M/s. Star Investment Pvt Ltd, New NO.17 / I, Old NO.9., Bazullah Road, T. Nagar, Chennai - 600 017. ... Respondent Prayer ::- Tax Case Appeal filed under Section 260A of the Income Tax Act, 1961 against the order of the Income Tax Appellate Tribunal, Madras 'C' Bench dated 03.04.2017 in M.P.No.211/Mds/2016. For Appellant :: Mr.J.Narayanaswamy, Senior Standing Counsel For Respondent :: Ms.Sriniranjani Srinivasan JUDGMENT (Made by DR.VINEET KOTHARI, J.) The Court was held by Video Conference, as per the Resolution of the Full Court dated 3 July 2020, by Judges at their respective residence and the counsel, staff of the Court appearing from their respective residences. http://www.judis.nic.in Order dt.03.09.2020 in T.C.A.No.804 of 2017 Prl.Commr. Of I.T. Chennai vs.M/s.Star Investment P Ltd 2/4 2. This Tax Case Appeal has been filed by the Revenue, calling in question the correctness of the order passed by the Income Tax Appellate Tribunal, Madras 'C' Bench dated 03.04.2017 in M.P.No.211/Mds/2016 by raising the following substantial questions of law: "Whether the Appellate Trib1mal was correct in holding that disallowance u/s 14A should not exceed the dividend earned during the year when the provisions of the said section as well as the Rule 3D does not provide for any such restriction ?” 3. When the matter is taken up for hearing, learned Standing Counsel brought to our notice the Circular issued by the Central Board of Direct Taxes vide Circular No.17/2019 dated 8 August 2019, 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). http://www.judis.nic.in Order dt.03.09.2020 in T.C.A.No.804 of 2017 Prl.Commr. Of I.T. Chennai vs.M/s.Star Investment P Ltd 3/4 4. In the instant case, the tax effect is said to be less than the monetary limit imposed and therefore, the Appeal filed by the Revenue is dismissed as withdrawn, keeping open the substantial questions of law for determination in appropriate cases. No costs. (V.K.,J.) (K.R.,J.) 03.09.2020

tar To M/s. Star Investment Pvt Ltd, New NO.17 / I, Old NO.9., Bazullah Road, T. Nagar, Chennai - 600 017. http://www.judis.nic.in Order dt.03.09.2020 in T.C.A.No.804 of 2017 Prl.Commr. Of I.T. Chennai vs.M/s.Star Investment P Ltd 4/4 DR.VINEET KOTHARI, J. and

KRISHNAN RAMASAMY, J. (tar) T.C.A.No.804 of 2017 03.09.2020 http://www.judis.nic.in

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