THE COMMISSIONER OF INCOME T vs. M/S.SAKTHI SUGARS LTD

PDF · subscribers
TCA/944/2019HC Madras26 November 2019Bench: Hon`ble Mr Justice N. KIRUBAKARAN4 pages
AI SummaryDismissed

What did the High Court hold?

The High Court dismissed the Tax Case Appeal on the ground of tax effect, citing Circular No. 17/2019 dated 08.08.2019. The Court noted that the monetary limit for filing appeals before the High Court is Rs. 1 crore, and the tax effect in this case was less than that amount. Consequently, the appeal was dismissed without deciding the substantial questions of law. The Court explicitly stated that the substantial questions of law were left open. Liberty was granted to the Revenue to seek restoration of the appeal if the tax effect was found to be above the limit fixed in the circular, to be heard and decided on merits. No costs were awarded.

What were the facts?

The Commissioner of Income Tax, Coimbatore (Appellant/Revenue) filed a Tax Case Appeal against the order dated 16.03.2000 passed by the Income Tax Appellate Tribunal (ITAT), Chennai 'A' Bench. The ITAT had dismissed the Department's appeal against an order of the Commissioner of Income Tax (Appeals) which had partly allowed the appeal of M/s. Sakthi Sugars Ltd. (Respondent/Assessee). The assessment year in question is 1987-88. The appeal was admitted on substantial questions of law concerning investment allowance and the applicability of Section 154 of the Income Tax Act, 1961.

What were the issues?

The Tribunal had to decide two substantial questions of law: 1. Whether the Tribunal was right in law in holding that even though the assessee did not make the claim in its order, the claim for investment allowance is still amenable for consideration under Section 154 of the Income Tax Act, 1961. 2. Whether the Tribunal was correct in holding that the grant of investment allowance was possible only after ensuring the creation of the reserve and the availability of profits during the assessment year 1987-88. The Revenue argued 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 CBDT, which sets the monetary limit for filing appeals before the High Court at Rs. 1 crore. Therefore, the appeal should be dismissed on this ground. The judgment does not record any specific arguments from the assessee on the substantial questions of law.

Which sections of the Income-tax Act were involved?

Section 260A,Section 154

AI-generated summary — verify with the full judgment below

T.C.A.No.944 of 2019 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 26.11.2019 CORAM : THE HONOURABLE MR.JUSTICE N.KIRUBAKARAN and THE HONOURABLE MR.JUSTICE P.VELMURUGAN T.C.A.No.944 of 2019 The Commissioner of Income Tax, Coimbatore.

... Appellant Vs M/s.Sakthi Sugars Ltd., 180, Race Course Road, Coimbatore.

...Respondent PRAYER: Tax Case Appeal filed under Section 260A of Income Tax Act, 1961 against the order dated 16.03.2000 in I.T.A.No.2096/Mds/1991 on the file of the Income Tax Appellate Tribunal Chennai 'A' Bench for the assessment year 1987-88. For Appellant : Mr.T.R.Senthil Kumar J U D G M E N T (Judgment of the Court was delivered by N.KIRUBAKARAN, J) This tax case appeal has been filed against the order of the Income Tax Appellate Tribunal dated 16.03.2000 passed in 1/4 http://www.judis.nic.in T.C.A.No.944 of 2019 I.T.A.No.2096/Mds/1991 in dismissing the appeal filed by the Department of Revenue against the order of the Commissioner of Income Tax (Appeals) by which the appeal filed by the assessee was partly allowed. 2.Heard Mr.T.R.Senthil Kumar, learned Counsel for the appellant. 3.This tax case appeal is admitted on the following substantial questions of law: "(i)Whether the Tribunal was right in law in holding that eventhough the assessee did not make the claim in its order, the claim for investment allowance is still amenable for consideration under Sec.154? (ii)Whether the Tribunal was correct in holding that the grant of investment allowance was possible only after ensuring the creation of the reserve and the availability of profits during the assessment year 1987-88?" 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 2/4 http://www.judis.nic.in T.C.A.No.944 of 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 appeal has 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: "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" 3/4 http://www.judis.nic.in T.C.A.No.944 of 2019 N.KIRUBAKARAN, J. and P.VELMURUGAN, J. ay 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, this Tax Case Appeal is dismissed on account of tax effect. However, the substantial questions of law framed are left 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. (N.K.K.,J.) (P.V.,J.) 26.11.2019 ay To The Commissioner of Income Tax, Coimbatore. T.C.A.No.944 of 2019

4/4 http://www.judis.nic.in

More judgments on Section 154

All 8,676 judgments and leading authorities on Section 154 →

Recent GST High Court judgments

Search GST case law →