Madras High Court Judgments — 2020

The High Court dismissed the Tax Case Appeal on the ground of tax effect. The Court noted the submission by the revenue that the tax effect was less than Rs.1 crore and referred to CBDT Circular No.17/2019 dated 08.08.2019, which sets the monetary limit for filing appeals before the High Court at Rs.1 crore. While dismissing the appeal on this procedural ground, the Court explicitly stated that the substantial question of law framed in the appeal was left open. The revenue was granted liberty to mention the case 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.

The High Court held that while the Tribunal found no prima facie case due to incriminating documents, considering the assessee had already deposited Rs.15,71,293/- out of a total demand of Rs.61,99,012/-, the interest of justice would be served by directing a further deposit. The Court ordered the assessee to deposit an additional Rs.15,00,000/- in three equal monthly installments, payable within 15 days of each month. Upon this payment, the ITAT's dismissal order on the stay petition was set aside, and an interim stay was granted until the disposal of the appeal before the Tribunal. The Court answered the substantial questions of law in this manner and directed the Tribunal to dispose of the appeal expeditiously. The Court explicitly stated it was not inclined to go into the genuineness of transactions at this stage.

The High Court dismissed the Tax Case Appeals filed by the Revenue on the ground of tax effect. The Court referred to Circular No. 17/2019 dated August 8, 2019, which stipulates a monetary limit of Rs. 1 crore for filing appeals before the High Court. Since the tax effect in these appeals was less than Rs. 1 crore, the appeals were dismissed. However, the substantial questions of law framed were left open. The Revenue was granted liberty to mention the case before the Court to restore the appeals for hearing on merits if the tax effect is found to be above the limit fixed in the circular. No costs were awarded. The connected miscellaneous petitions were closed.

The High Court dismissed the Tax Case Appeal on the grounds of low tax effect, citing Circular No. 17/2019 dated 08.08.2019. The circular specifies a monetary limit of Rs. 1 crore for filing appeals before the High Court. As the tax effect in this case was less than Rs. 1 crore, 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 for restoration if the tax effect is found to be above the limit prescribed in the circular, allowing the appeal to be heard and decided on merits. No costs were awarded.

The High Court held that the Tribunal and CIT(A) were right in granting 40% depreciation on the 160KVA UPS. The Court reasoned that the 160KVA UPS, costing Rs. 53,02,620/-, is a specialized unit, not an ordinary UPS, and is integral to the functioning of PET/CT and other diagnostic machines. Its sole purpose is to ensure uninterrupted power supply to critical medical equipment during power failures, thereby preventing harm to patients and ensuring the continuity of diagnostic procedures. The Court noted that the Appendix I to Rule 5 was framed in 2006-07 and may not account for modern medical advancements. While acknowledging the principle of strict interpretation of exemption notifications, the Court found it necessary to interpret the 'life saving medical equipment' clause in a manner that is in tune with contemporary medical technology and the needs of patients. The substantial question of law was answered against the appellant (Revenue).

The High Court noted that in the assessee's own case, concerning other appeals (T.C.A.Nos.718 to 720 and 805 to 809 of 2018), a Division Bench of the same court had set aside the common order passed by the ITAT and remanded the matters back to the Tribunal. The court extracted relevant paragraphs from that judgment, which directed the Tribunal to consider specific substantial questions of law and afford the assessee an opportunity to make submissions. Following this precedent, the High Court set aside the order of the Appellate Tribunal in the present case and remanded the matter back to the authorities to consider the case afresh after hearing the parties. The court directed that the matter be considered along with other cases.