COMMISSIONER OF INCOME TAX vs. D C SETH (HUF)

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TCA/988/2019HC Madras13 December 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. The Court noted the submission by the Revenue's counsel and perused Circular No. 17/2019 dated 08.08.2019, which specifies the monetary limit for filing appeals before the High Court as Rs. 1,00,00,000. As the tax effect in the present case was less than this limit, the appeal was dismissed. However, the Court explicitly stated that the substantial questions of law framed were left open. Liberty was granted to the Revenue to mention the case to the Court for restoration if the tax effect is 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 Revenue, Commissioner of Income Tax, Chennai, filed a Tax Case Appeal against an order dated 10.06.2002 passed by the Income Tax Appellate Tribunal (ITAT), Chennai 'C' Bench. The ITAT's order had partly allowed the assessee's (D C Seth (HUF)) appeal against an earlier order. The assessment year in question is 1986-87. The appeal was admitted on substantial questions of law concerning the levy of interest under Sections 139(8) and 217 of the Income Tax Act, 1961, in re-assessment proceedings, particularly in light of Explanation 2 to Section 139(8) inserted with effect from 01.04.1985. The Revenue's counsel submitted that the tax effect in this case was less than Rs. 1 crore, which is the monetary limit for filing appeals before the High Court as per Circular No. 17/2019 dated 08.08.2019.

What were the issues?

1. Whether, in the facts and circumstances of the case, the Appellate Tribunal was right in holding that no interest under Section 139(8) and Section 217 of the Income Tax Act, 1961, can be levied in the case of re-assessment proceedings? (Question of law) 2. Whether, in the facts and circumstances of the case, the view of the Appellate Tribunal that no interest under Section 139(8) and Section 217 is leviable was right, in view of the insertion of Explanation 2 to Section 139(8) with effect from 01.04.1985? (Question of mixed law and fact) Assessee's Contentions: The judgment does not record any specific contentions made by the assessee. Revenue's Contentions: The Revenue contended 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, 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.

Which sections of the Income-tax Act were involved?

Section 260A,Section 139(8),Section 217

AI-generated summary — verify with the full judgment below

T.C.A.No.988 of 2019 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 13.12.2019 CORAM : THE HONOURABLE MR.JUSTICE N.KIRUBAKARAN and THE HONOURABLE MR.JUSTICE P.VELMURUGAN T.C.A.No.988 of 2019 Commissioner of Income Tax, Chennai. ... Appellant Vs D C Seth (HUF), 58 Devaraja Mudali Street, Chennai 600 003.

...Respondent PRAYER: Tax Case Appeal filed under Section 260A of Income Tax Act, 1961 against the order dated 10.06.2002 in I.T.A.No.483(Mds)/1993 on the file of the Income Tax Appellate Tribunal Chennai 'C' Bench for the assessment year 1986-87. For Appellant : Ms.Hemalatha, Junior Standing Counsel. 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 10.06.2002 in 1/4 http://www.judis.nic.in T.C.A.No.988 of 2019 I.T.A.No.483(Mds)/1993 in partly allowing the appeal filed by the assessee against the order of the Income Tax Appellate Tribunal by which the appeal filed by the assessee was partly allowed. 2.Heard Ms.Hemalatha, learned Junior Standing Counsel for the appellant. 3.This tax case appeal is admitted on the following substantial questions of law: "(i)Whether in the facts and circumstances of the case, the Appellate Tribunal was right in holding that no interest u/s.139(8) and Sec.217 can be levied in the case of re-assessment proceedings? (ii)Whether in the facts and circumstances of the case, view of the Appellate Tribunal that no interest u/s.139(8) and Sec.217 is leviable was right, in view of the insertion of explanation 2 to Sec.139(8) with effect from 01.04.1985?"

4.

Ms.Hemalatha, learned Junior Standing 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 2/4 http://www.judis.nic.in T.C.A.No.988 of 2019 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 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.988 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.) 13.12.2019 ay To Commissioner of Income Tax, Chennai. T.C.A.No.988 of 2019 4/4 http://www.judis.nic.in

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