Madras High Court Judgments — 2018

The High Court recorded the submission made by the learned counsel for the appellant (assessee) that the assessee was not interested in pursuing the appeal and had circulated a letter dated 29.11.2018 to the Registry to this effect. Consequently, the Tax Case Appeal was dismissed as withdrawn. No costs were awarded. The specific questions of law admitted for consideration were not adjudicated on merits due to the withdrawal of the appeal.

The High Court dismissed the Tax Case Appeal for default. The court noted that despite a previous order granting a last chance to the appellant (Revenue) to pay batta and regularize the matter, and a subsequent recording that deficiencies were cured, the cause list still showed that third batta was due. Consequently, the appeal was dismissed for default, with the substantial questions of law remaining unanswered. No costs were awarded. The operative direction is the dismissal of the appeal.

The High Court dismissed the appeals as withdrawn. The decision was based on the submission by the Revenue's counsel regarding CBDT Circular No.17/2019, which mandates that appeals should not be filed or pursued if the tax effect does not exceed Rs.1,00,00,000/-. The Revenue stated that the tax effect in these appeals was less than the stipulated threshold. Consequently, the court found it appropriate to dismiss the appeals as withdrawn, while explicitly stating that the substantial questions of law remain open for determination in appropriate future cases. No costs were awarded. The court did not decide the merits of the substantial questions of law raised.

The High Court held that the findings of both the CIT(A) and the Tribunal were perfectly right and fully justified. The Tribunal was correct in holding that the Assessing Officer, while giving effect to the order passed by it, cannot travel beyond the order and recompute the book profits under Section 115JB of the Act. The CIT(A) had found that the Tribunal's earlier order granted relief in respect of diminution in the value of assets and addition on account of deferred interest. The CIT(A) concluded that the Assessing Officer should have restricted the order to these specific directions and, in the absence of any specific direction on re-computation of tax under Section 115JB, the Assessing Officer lacked the power to make adjustments to book profits. The Tribunal concurred with this view. Therefore, the appeal filed by the Revenue was dismissed as there was no substantial question of law arising for consideration.

The High Court did not decide the substantial questions of law on merits. Instead, the Court noted a Circular instruction issued by the Central Board of Direct Taxes (CBDT) vide Circular No.17/2019, dated August 8, 2019. This circular stipulates that appeals shall not be filed or pursued by the Department before the High Court if the tax effect does not exceed Rs.1,00,00,000/- (Rupees One Crore only). As the tax effect in the present case was stated to be less than this monetary limit, the Revenue's appeal was dismissed as not pressed. The substantial questions of law were kept open for determination in appropriate cases. No costs were awarded.