THE COMMISSIONER OF INCOME vs. M/S. ROAD SAFETY CLUB P LTD

TCA/910/2015HC Madras29 October 2024Bench: Honourable Mr Justice R. SURESH KUMAR4 pages

AI SummaryDismissed

What did the High Court hold?

The High Court dismissed the Tax Case Appeal filed by the Revenue. The dismissal was based on the submission made by the Revenue's counsel that the tax effect in the case was below the monetary limit stipulated by CBDT's Circular No. 9 of 2024. Consequently, the Court decided not to adjudicate the substantial questions of law raised in the appeal. The substantial questions of law were kept open for adjudication at an appropriate stage. No order as to costs was made. The specific findings of the Tribunal on the membership fee, safety bonus, and insurance premiums, as well as the reasoning behind those findings, were not discussed or decided by the High Court due to the dismissal on the ground of low tax effect.

What were the facts?

The Revenue, represented by the Commissioner of Income Tax, Chennai, filed a Tax Case Appeal before the High Court of Judicature at Madras. The appeal challenges an order passed by the Income Tax Appellate Tribunal ('A' Bench, Chennai) on March 11, 2015, concerning assessment year 2008-09. The assessee is M/s. Road Safety Club (P) Ltd. The appeal raises three substantial questions of law. The Revenue's counsel submitted that as per CBDT's Circular No. 9 of 2024 dated September 17, 2024, the tax effect in this case is below the monetary limit. Consequently, the Revenue requested that the appeal be disposed of without adjudicating the substantial questions of law, keeping them open for future consideration.

What were the issues?

The Tribunal had to decide three substantial questions of law: 1. Whether, following the mercantile system of accounting, only 1/8th of the membership fee received during the year should be treated as income. 2. Whether a claim for deduction towards provisions made for safety bonus payable to members is allowable even if no claim was allowed as a deduction. 3. Whether the Tribunal's finding upholding the CIT(A)'s order allowing a claim for deduction of insurance premiums paid, over and above the sum debited to the profit and loss account, is correct. The Revenue contended that the Tribunal erred in its findings on these issues. The judgment does not record specific arguments from the assessee regarding these questions. The Revenue's primary submission for disposal of the appeal was based on the low tax effect as per CBDT Circular No. 9 of 2024.

Which sections of the Income-tax Act were involved?

Section 260A

AI-generated summary — verify with the full judgment below

T.C.A.No.910 of 2015 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 29.10.2024 CORAM THE HONOURABLE MR.JUSTICE R.SURESH KUMAR and THE HONOURABLE MR.JUSTICE C.SARAVANAN T.C.A.No.910 of 2015 The Commissioner of Income Tax, Chennai. ... Appellant -Vs- M/s.Road Safety Club (P) Ltd., No.4, Lady Desika Chari Road, Mylapore, Chennai - 600 004. PAN:AABCR9430K ... Respondent PRAYER : Tax Case Appeal filed under Section 260 A of the Income Tax Act, 1961, against the order of the Income Tax Appellate Tribunal 'A' Bench, Chennai dated 11.03.2015 in I.T.A.No.2957/Mds/2014 for the assessment year 2008-09. For Appellant : Mrs.V.Puspha Senior Standing Counsel For Respondent : Mr.R.Sivaraman J U D G M E N T 1/4 https://www.mhc.tn.gov.in/judis T.C.A.No.910 of 2015 (Judgment of the Court was delivered by R.SURESH KUMAR, 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 by raising the following substantial questions of law: 1. Whether on the facts and in the circumstances of the case the Tribunal was right in holding that only 1/8th of the Membership fee received during the year should be treated as income of the assessee even though the assessee had been following mercantile system of accounting? 2. Whether on the facts and in the circumstances of the case the Tribunal was right in holding that the claim for deduction towards provisions made for safety bonus payable to Members is allowable even though no claim was allowed as a deduction? 3. Is not the finding of the Tribunal bad which upheld the order of CIT(A) wherein the Assessee claim for deduction insurance premiums paid was to be allowed over and above the sum debited to the profit and loss account? 2. It is brought to our notice by the learned Senior Standing Counsel for 2/4 https://www.mhc.tn.gov.in/judis T.C.A.No.910 of 2015 the appellant Revenue that in the instant case, as per the CBDT's Circular No.9 of 2024 dated 17.09.2024 the tax effect is said to be less than the monetary limit imposed and therefore, the appeal can be disposed of, keeping the substantial questions of law raised in this appeal open for adjudication at a later point of time. 3. Recording the aforesaid submission made by the learned Senior Standing Counsel for the appellant Revenue, this Tax Case Appeal is dismissed for low tax effect, keeping open the substantial questions of law for adjudication at appropriate stage. However, there shall be no order as to costs. (R.S.K., J.) (C.S.N., J.) 29.10.2024 NCC : Yes / No Index : Yes / No Speaking Order : Yes / No vji To The Income Tax Appellate Tribunal 'A' Bench, Chennai. 3/4 https://www.mhc.tn.gov.in/judis T.C.A.No.910 of 2015 R.SURESH KUMAR, J. and C.SARAVANAN, J. vji T.C.A.No.910 of 2015 29.10.2024 4/4 https://www.mhc.tn.gov.in/judis

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