THE COMMISSIONER OF INCOME vs. M/S. PERI SOFTWARE SOLUTIONS

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TCA/87/2017HC Madras04 September 2019Bench: Hon`ble Dr Justice VINEET KOTHARI4 pages
AI SummaryDismissed

What did the High Court hold?

The High Court noted that the learned Standing Counsel for the Department brought to its notice a Circular instruction issued by the Central Board of Direct Taxes (CBDT) vide Circular No. 17/2019, dated 8th August 2019. This circular stipulates 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/- (Rupees One Crore). 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 Consequently, the High Court dismissed the appeal filed by the Revenue as withdrawn.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 substantial questions of law were kept open for determination in appropriate cases. No costs were awarded.

What were the facts?

The Revenue, represented by the Commissioner of Income Tax, Chennai, filed an appeal under Section 260-A of the Income Tax Act, 1961, against an order of the Income Tax Appellate Tribunal (ITAT), Chennai 'C' Bench, dated 03.06.2016. The appeal pertained to Assessment Year 2011-12 and concerned an addition of Rs. 30,16,641/- made by the Assessing Officer (AO) on account of delayed payment of employee's contribution to Provident Fund and ESI. The assessee is M/s. Peri Software Solutions Pvt. Ltd. The High Court of Judicature at Madras heard the appeal.

What were the issues?

1. Whether, on the facts and in the circumstances of the case, the Tribunal was right in deleting the addition of Rs. 30,16,641/- made by the AO on account of delayed payment to Employee's Contribution to Provident Fund and ESI? (Question of law). 2. Is not the finding of the Tribunal bad by deleting the additions made under Section 36(1)(a) which is allowed only if the employee's contribution to provident fund and ESI are credited into the specified account within the specified due dates as per respective Acts, which is not the case on hand? (Question of mixed law and fact, turning on Section 36(1)(a) of the Income Tax Act, 1961). Assessee's contentions: Not recorded in the judgment. Revenue's contentions: The Revenue argued that the deletion of the addition by the Tribunal was incorrect, as Section 36(1)(a) allows deduction only if employee contributions to provident fund and ESI are credited within the specified due dates as per the respective Acts, which was not the case. The Revenue relied on the AO's addition.

Which sections of the Income-tax Act were involved?

Section 260-A,Section 36(1)(a)

AI-generated summary — verify with the full judgment below

1 /4 Tax Case Appeal No.87 of 2017 The Commissioner of Income Tax, Chennai vs. M/s.Peri Software Solutions Pvt.Ltd.,

IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 04.09.2019 CORAM THE HON'BLE DR.JUSTICE VINEET KOTHARI AND THE HON'BLE MR.JUSTICE C.SARAVANAN Tax Case Appeal No.87 of 2017 The Commissioner of Income Tax, Chennai. .. Appellant Vs. M/s.Peri Software Solutions Pvt.Ltd., M/s.Ramesh & Ramachandran Chartered Accountant New No.39, Old No.29/3, Vishwanathapuram Main Road, Kodambakkam, Chennai 600 024. .. Respondent Appeal under Section 260-A of the Income Tax Act, 1961, against the order of the Income Tax Appellate Tribunal, Chennai 'C' Bench dated 03.06.2016 - ITA No.754/Mds/2016(Assessment Year 2011-12). For Appellant : Mr.T.Ravikumar Senior Standing Counsel. For Respondent : Mr.A.S.Sriraman http://www.judis.nic.in 2 /4 Tax Case Appeal No.87 of 2017 The Commissioner of Income Tax, Chennai vs. M/s.Peri Software Solutions Pvt.Ltd.,

J U D G M E N T (By DR.VINEET KOTHARI,J.) 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, Chennai 'C' Bench, dated 09.04.2010, in ITA No.754/Mds/2016, Assessment Year 2011-12, by raising the following substantial questions of law : i) "Whether on the facts and in the circumstances of the case, the Tribunal was right in deleting the addition of Rs.30,16,641/- made by A.O. on account of delayed payment to Employee's Contribution to Provident Fund and ESI? and ii) Is not the finding of the Tribunal bade by deleting the additions made under Section 36(1)(a) which is allowed only if the employee's contribution to provident fund and ESI are credited into the specified account within the specified due dates as per respective Acts which is not the case on hand?

2.

When the matter is taken up for hearing, learned Standing Counsel for the Department brought to our notice the Circular instruction issued by the http://www.judis.nic.in 3 /4 Tax Case Appeal No.87 of 2017 The Commissioner of Income Tax, Chennai vs. M/s.Peri Software Solutions Pvt.Ltd.,

Central Board of Direct Taxes vide Circular No.17/2019, dated 8th 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). 3. 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.) (C.S.N.,J.) 04.09.2019

Index : Yes/No Internet : Yes/No kkd To The Income Tax Appellate Tribunal, Chennai 'C' Bench, Chennai. http://www.judis.nic.in 4 /4 Tax Case Appeal No.87 of 2017 The Commissioner of Income Tax, Chennai vs. M/s.Peri Software Solutions Pvt.Ltd.,

DR.VINEET KOTHARI, J. and C.SARAVANAN, J. kkd TCA No.87 of 2017 04.09.2019 http://www.judis.nic.in

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