Commissioner Of Income Tax, v. V.N.Devadoss (Huf),

IN THE HIGH COURT OF JUDICATURE AT MADRAS

Dated : 19.07.2018 Coram THE HONOURABLE MR. JUSTICE M.M.SUNDRESH and THE HONOURABLE MR. JUSTICE N.ANAND VENKATESH T.C.(A). No.828 of 2010 Commissioner of Income Tax, Central I, Chennai.

.. Appellant vs.

V.N.Devadoss (HUF), No.333 (Old No.208), Poonamallee High Road, Aminjikarai, Chennai - 29.

.. Respondent Appeal filed under Section 260A of the Income Tax Act, 1961 against the order of the Income Tax Appellate Tribunal "A" Bench, Chennai dated 12.03.2010 passed in I.T.A. No.388/Mds/2009. Against the order dated 20.11.2008 made in ITA No.330/05-06 on the file of the Commissioner of Income Tax (Appeals)-XII, Chennai.

Against the order, dated 16.02.2006, made in AAAHV25963 on the file of the Assistant Commissioner of Income Tax, Circle XIII, Chennai 34.

For Appellant :

Mr.M.Swaminathan For Respondent :

Mr.C.Kasirajan

JUDGMENT

(Judgment of the Court was delivered by M.M.SUNDRESH, J.) The Revenue has filed this appeal by formulating the following substantial questions of law in respect of the assessment year 2003-2004:

"(1)Whether on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal was right in law in holding that the treatment of income from sale of the lands in question as business income was arbitrary and unjustified on the part of the Revenue and in setting aside the orders of the lower authorities holding that the income from sale of the land should be treated as 'Capital Gains'?

(2)Whether on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal was right in coming to the conclusions mentioned in the preceding question disregarding all the relevant evidence discussed in the orders of the Assessing Officer and Commissioner of Income Tax (Appeals) and relying on irrelevant material like the filing of Wealth Tax Returns by the HUF?"

2.Heard the learned counsel appearing for the appellant and the learned counsel appearing for the respondent. 3.Learned counsel appearing for the appellant submits that the issue involved in this appeal viz., low tax effect has already been considered by this Court in T.C.A. No.1528 of 2007 on 06.06.2018 and the following order has been passed: "3. It may not be necessary for us to decide the substantial question of law framed for consideration, on account of the low tax effect in this appeal. This issue was considered by us in the case of Commissioner of Income Tax vs. N.Meenakshisundaram in T.C.(A) Nos.868 & 869 of 2008 dated 23.04.2018, by taking note of the Circular Instructions issued by the Central Board of Direct Taxes (CBDT) and also taking note of the submissions of the Revenue, the relevant portions of which are quoted hereunder:

"10. An argument was advanced by the learned Senior Standing Counsel for the Revenue that the circular can have effect only, while filing the appeal and not while hearing of the appeal and would have no impact on the appeals, which are admitted and pending. However, in the Circular issued in the year, 2015, it has been made clear that, it will apply to pending appeals as well. In respect of the earlier circulars, it would be relevant to take note of the decision of the Hon'ble Supreme Court in Mathew M. Thomas Vs Commissioner Of Income-Tax [(1999) (III) ELT 4 SC] wherein, the Hon'ble Supreme Court, while

considering the effect of Circular No.445, dated 16.05.1986, pointed out that Circular No. 455 dated 16.5.1986 issued by the C.B.D.T. is applicable to all pending proceedings which have not attained finality under Section 269 I of the Act as defined in the explanation to the said Section.

...........................

14. Therefore, the Circular has to be understood as part of the litigation policy of the Government of India to reduce the litigation and to bring down the number of Appeals, which are pending before the Court and also ensure that the Appeals are not preferred by the Department without proper examination of the case on merits. ...........

15. As per the Circular/Instruction issued by CBDT, the present Appeal should be not pressed by the Revenue. If, at the time of filing of the Appeal, decision has to be taken whether to file an Appeal or not and the Authority by due application of mind and bearing the two caveats laid down by the Hon'ble Supreme Court, in Surya Herbal Ltd., case (supra) should take a decision. In cases, where, the Appeals are pending before the Court, appropriate Officer has to take a decision. In the instant case, it appears that, no such specific instruction is issued to Mr.M.Swaminathan, the learned Senior Standing Counsel to withdraw the Appeal, nor, can we compel the learned counsel to withdraw the Appeal.

16. Having held that the Circular issued by CBDT is applicable to the case on hand and the tax effect being less than the threshold limit prescribed in the Circular, we dismiss the present Appeal by applying the law laid down by the Hon'ble Supreme Court, in Surya Herbal Ltd., case (supra), as the two caveats mentioned thereunder does not arise in the instant case."

4.By applying the above decision, we dismiss this tax case (appeal) on the ground of low tax effect and in terms of the above referred decision, leave the substantial question of law, which has been framed for consideration. No costs."

4.In such view of the matter and in view of the circular issued by the Central Board Direct Taxes in Circular No.21/2015 dated 10.12.2015, this tax case appeal is dismissed on the ground of low tax effect, leaving the substantial questions of law open, which have been framed for consideration. No costs. Sd/- Assistant Registrar(CS-VII) //True Copy// Sub Assistant Registrar mmi To The Register Income Tax Appellate Tribunal, "A" Bench, Chennai.

2. The Commissioner of Income Tax (Appeals), xii, chennai.

3. The Assistant Commissioner of Income Tax, Circle XIII, Chennai 34.

+1cc to Mr.M.SWAMINATHAN, Advocate, S.R.No.47937 +1cc to Mr.C.KASIRAJAN, Advocate, S.R.No. 48203 T.C.(A).No.828 of 2010 GP(CO) TR(09/08/2018)