PRINCIPAL COMMISSIONER OF IN vs. GEETHA JAYAMURUGAN

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TCA/869/2019HC Madras21 November 2019Bench: Hon`ble Mr Justice N. KIRUBAKARAN6 pages
AI SummaryDismissed

What did the High Court hold?

The High Court dismissed the Tax Case Appeals on the ground of tax effect. The Court noted the submission by the learned counsel for the appellant (Revenue) that the tax effect in these cases was less than Rs. 1 crore and was covered by Circular No. 17/2019 dated 08.08.2019 issued by the CBDT. This circular enhances the monetary limit for filing appeals before the High Court to Rs. 1 crore. In view of this circular and the submission regarding the tax effect, the appeals were dismissed. However, the substantial questions of law framed were left open. Liberty was granted to the Revenue to mention the case before the Court for restoration if the tax effect is found to be above the limit fixed in the circular, for hearing and decision on merits. No costs were awarded, and connected miscellaneous petitions were closed.

What were the facts?

The appeals were filed by the Principal Commissioner of Income Tax against an order of the Income Tax Appellate Tribunal (ITAT) dated 04.03.2016. The ITAT had allowed appeals filed by the assessee, Smt. Geetha Jayamurugan, against an order of the Commissioner of Income Tax (Appeals) which had partly allowed the assessee's appeals. The assessment years involved are 2007-08 to 2013-14. The appeals before the High Court were admitted on substantial questions of law. The Revenue's counsel submitted that the tax effect in these appeals was less than Rs. 1 crore and therefore, the appeals should be dismissed in light of CBDT Circular No. 17/2019.

What were the issues?

The Tribunal had to decide the following substantial questions of law: 1. Whether the ITAT was correct in accepting the agricultural income declared by the assessee, despite the CIT(A) finding no evidence of sale of agricultural produce, and whether the ITAT's decision was perverse. 2. Whether the ITAT was correct in holding the assessee eligible for exemption under Section 54F, ignoring that the amount was spent on land purchase and not a 'residential unit', and that no amount was deposited in the capital gains account, thereby ignoring mandatory requirements of Section 54F. 3. Whether the ITAT was correct in holding that interest under Section 234A is to be charged for every month or part of the month from the expiry of the time allowed in the notice under Section 153A to the date of completion of assessment under Section 143(3) read with Section 153A. 4. Whether the ITAT was correct in holding that interest under Section 234B is leviable only on the tax on total income determined under Section 143(3) read with Section 153A exceeding the tax on total income determined under Section 143(1), considering that Section 153A does not contemplate processing of a return under Section 143(1) filed in response to a Section 153A notice. 5. Whether the ITAT was correct in ignoring that the assessee had not filed any return under Section 139 and there was no prior assessment under Section 143(3), making the order under Section 143(3) read with Section 153A the first assessment, and thus whether Section 234A(1) was applicable instead of Section 234A(3). Assessee's arguments: Not recorded. Revenue's arguments: The tax effect is less than Rs. 1 crore, covered by CBDT Circular No. 17/2019, which sets the monetary limit for filing appeals before the High Court at Rs. 1 crore. Therefore, the appeals should be dismissed.

Which sections of the Income-tax Act were involved?

Section 54F,Section 153A,Section 143(3),Section 234A,Section 234B,Section 139,Section 143(1),Section 260A

AI-generated summary — verify with the full judgment below

T.C.A.No.869 of 2019 & batch IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 21.11.2019 CORAM : THE HONOURABLE MR.JUSTICE N.KIRUBAKARAN and THE HONOURABLE MR.JUSTICE P.VELMURUGAN T.C.A.Nos.869 to 873, 885 & 886 of 2019 and C.M.P.Nos.24079, 24088, 23953, 23952, 23950 & 23949 of 2019 Principal Commissioner of Income Tax Central 2, No.121, Mahatma Gandhi Road, Chennai - 600 034. ... Appellant in all appeals Vs Smt.Geetha Jayamurugan ...Respondent in all appeals COMMON PRAYER: Tax Case Appeals filed under Section 260A of Income Tax Act, 1961 against the common order dated 04.03.2016 in I.T.A.Nos.2262 to 2268/Mds/2015 on the file of the Income Tax Appellate Tribunal Chennai 'C' Bench for the assessment years 2007- 08, 2008-09, 2009-10, 2010-11, 2011-12, 2012-13 & 2013-14. For Appellant : Mr.T.R.Senthil Kumar C O M M O N J U D G M E N T 1/6 http://www.judis.nic.in T.C.A.No.869 of 2019 & batch (Judgment of the Court was delivered by N.KIRUBAKARAN, J)

These tax case appeals have been filed against the order of the Income Tax Appellate Tribunal dated 04.03.2016 in I.T.A.Nos.2262 to 2268/Mds/2015 in allowing the appeals filed by the assessee against the order of the Commissioner of Income Tax (Appeals) by which the appeals filed by the assessee was partly allowed. 2.Heard Mr.T.R.Senthil Kumar, learned Counsel for the appellant. 3.These tax case appeals are admitted on the following substantial questions of law: "(i)Whether the ITAT is correct in law in directing that the agricultural income declared by the assessee has to be accepted even when, the CIT(A), in his appellate order has given a clear finding that the appellant did not have any evidence regarding the sale of agricultural produce, the decision of ITAT directing to accept the agricultural income declared by the assessee, is not perverse? (ii)Whether the ITAT is correct in holding that the 2/6 http://www.judis.nic.in T.C.A.No.869 of 2019 & batch assessee is eligible for exemption u/s 54F ignoring the fact that the amount of exemption claimed is spent only for purchase of land and not for a 'residential unit' and the assessee has not deposited any amount in the capital gain account by ignoring the mandatory requirement under Section 54F? (iii)Whether ITAT is correct in holding that the interest 234A is to be charged for every month or part of the month comprised in the period commencing on the day immediately following the expiry of the time allowed in the notice under Section 153A to the date of completion of assessment u/s 143(3) r.w.Sec.153A? (iv)Whether on the facts and in the circumstances of the case and in law, the Hon'ble ITAT is correct in holding that the interest under Section 234B would be leviable only on the tax on the total income determined in the order passed u/s.143(3) r.w.Sec.153A which exceeds the tax on the total income determined under Sub-section (1) of Section 143 in response to the notice under Section 153A, whereas the provisions of the Section 153A does not contemplate processing of Return of income u/s 143(1) filed in response to notice u/s.153A of the Income Tax Act, 1961? (v)Whether the ITAT is correct in ignoring the fact 3/6 http://www.judis.nic.in T.C.A.No.869 of 2019 & batch that the assessee has not filed any return in this 139 and there was no assessment u/s.143(3) earlier and as such the order u/s.143(3) rws 153A is the first assessment made and, therefore, being regarded as is regarded as the regular assessment as per explanation 3 to Section 234A. Accordingly, Section 234A(3) will not apply and 234A(1) only which is applicable to the facts of this case?" 4.Mr.T.R.Senthil Kumar, learned Counsel appearing on behalf of the appellant would submit that the tax effect in this case is 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 this case, tax effect is less than Rs.1 crore and therefore, the appeals have to be dismissed. 5.This Court perused the circular dated 08.08.2019 and Paragraph No.2 of the Circular, which prescribes monetary limit for filing appeal. Paragraph No.2 is usefully extracted as follows: 4/6 http://www.judis.nic.in T.C.A.No.869 of 2019 & batch "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 questions of law framed are left N.KIRUBAKARAN, J. 5/6 http://www.judis.nic.in T.C.A.No.869 of 2019 & batch and P.VELMURUGAN, J. ay 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 appeal to be heard and decided on merits. No costs. Consequently, connected miscellaneous petitions are closed. (N.K.K.,J.) (P.V.,J.) 21.11.2019 ay To Principal Commissioner of Income Tax Central 2, No.121, Mahatma Gandhi Road, Chennai - 600 034.

T.C.A.Nos.869 to 873, 885 & 886 of 2019 and C.M.P.Nos.24079, 24088, 23953, 23952, 23950 & 23949 of 2019 6/6 http://www.judis.nic.in

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