"3. It May Not Be Necessary For Us To Decide Thesubstantial Question Of Law Framed For Consideration,On Account Of The Low Tax Effect In This Appeal. Thisissue v. M/S.bafna & Associates

IN THE HIGH COURT OF JUDICATURE AT MADRAS Coram THE HONOURABLE MR. JUSTICE M.M.SUNDRESHandTHE HONOURABLE MR. JUSTICE N.ANAND VENKATESH T.C.(A). No.858 of 2010 Commissioner of Income Tax - ICoimbatore... Appellantvs. M/s.Bafna and Associates,162, Ponnurangam Road,R.S.Puram, Coimbatore... Respondent Appeal filed under Section 260A of the Income Tax Act, 1961against the order of the Income Tax Appellate Tribunal "D"Bench, Chennai dated 14.06.2005 passed in I.T.A. No.724/Mds/2000.against the order of the Commissioner of Income Tax(Appeals)-I, Coimbatore dated 13.10.2005 made in AppealNo.333/04-05. against the order of the Income Tax Officer, Ward-II(3),Coimbatore dated 27.03.2001 made in PAN/GIR.No.B-312/Ward-II(3). against the order dated the Commissioner of Income Tax, 67A,Race Course Road, Coimbatore, dated 02.03.2000 made in C.No.1416(08)/99-2000. (Judgment of the Court was delivered by M.M.SUNDRESH, J.) The Revenue has filed this appeal by formulating thefollowing substantial questions of law in respect of the blockperiod 01.04.1990 to 14.11.2000: https://hcservices.ecourts.gov.in/hcservices/ ""1. Whether on the facts and in the circumstancesof the case, the Income Tax Appellate Tribunal wasright in holding that the assessee was not a promoterof flats and the income could be estimated only at 8%of the receipts as per the provisions of Section 44ADof the Income Tax Act, ignoring the factual findingsof the Assessing officer in the order u/s 143(3)passed on 28.10.2004 to the effect that the assesseewas only a promoter of flats and not a civilcontractor and the provisions of Section 44AD were notapplicable? 2. Whether on the facts and in the circumstancesof the case, the Income Tax Appellate Tribunal wasright in impliedly accepting the assessee's falseaverment that the Assessing Officer had given afinding in order u/s 143(3) dated 28.10.2004 that theassessee was not a promoter of flats, whereas theactual finding of the Assessing officer was that hewas only a promoter of flats? 3. Whether on the facts and in the circumstancesof the case, the Income Tax Appellate Tribunal wasright in passing an appellate order against the orderof the Commissioner of Income tax u/s 263 when theappeal against the same order had been disposed of onthe basis of the same appeal filed by the assessee byits appellate order dated 29.05.2003 wherein theTribunal had disposed of the appeal giving a directionto the assessee to produce evidence that he was not apromoter of flats? 4. Without prejudice to the above questions,assuming that the Tribunal's order is based on theassessee's Miscellaneous Petition requesting forrecalling the earlier order dated 29.05.2003 whetheron the facts and in the circumstances of the case, theIncome Tax Appellate Tribunal was right in recallingthe earlier order and passing a totally differentorder contrary to the law settled by various judicialdecisions to the effect that the Tribunal could onlyrectify mistakes apparent from record while exercisingpowers u/s 254(2) of the Income Tax Act and could notrecall its earlier order and pass a fresh orderreviewing the earlier order?" 2.Heard the learned counsel appearing for the appellant andthe learned counsel appearing for the respondent. 3.Learned counsel appearing for the appellant submits thatthe issue involved in this appeal viz., low tax effect hasalready been considered by this Court in T.C.A. No.1528 of 2007on 06.06.2018 and the following order has been passed: 2.Heard the learned counsel appearing for the appellant andthe learned counsel appearing for the respondent. 3.Learned counsel appearing for the appellant submits thatthe issue involved in this appeal viz., low tax effect hasalready been considered by this Court in T.C.A. No.1528 of 2007on 06.06.2018 and the following order has been passed: "3. It may not be necessary for us to decide thesubstantial question of law framed for consideration,on account of the low tax effect in this appeal. Thisissue was considered by us in the case of Commissionerof Income Tax vs. N.Meenakshisundaram in T.C.(A)Nos.868 & 869 of 2008 dated 23.04.2018, by taking noteof the Circular Instructions issued by the CentralBoard of Direct Taxes (CBDT) and also taking note ofthe submissions of the Revenue, the relevant portionsof which are quoted hereunder: "10. An argument was advanced by the learnedSenior Standing Counsel for the Revenue that thecircular can have effect only, while filing theappeal and not while hearing of the appeal andwould have no impact on the appeals, which areadmitted and pending. However, in the Circularissued in the year, 2015, it has been made clearthat, it will apply to pending appeals as well.In respect of the earlier circulars, it would berelevant to take note of the decision of theHon'ble Supreme Court in Mathew M. Thomas VsCommissioner Of Income-Tax [(1999) (III) ELT 4 SC]wherein, the Hon'ble Supreme Court, whileconsidering the effect of Circular No.445, dated16.05.1986, pointed out that Circular No. 455dated 16.5.1986 issued by the C.B.D.T. isapplicable to all pending proceedings which havenot attained finality under Section 269 I of theAct as defined in the explanation to the saidSection. ........................... 14. Therefore, the Circular has to beunderstood as part of the litigation policy of theGovernment of India to reduce the litigation andto bring down the number of Appeals, which arepending before the Court and also ensure that theAppeals are not preferred by the Departmentwithout proper examination of the case onmerits. ........... 15. As per the Circular/Instruction issued byCBDT, the present Appeal should be not pressed by the Revenue. If, at the time of filing of theAppeal, decision has to be taken whether to filean Appeal or not and the Authority by dueapplication of mind and bearing the two caveatslaid down by the Hon'ble Supreme Court, in SuryaHerbal Ltd., case (supra) should take a decision.In cases, where, the Appeals are pending beforethe Court, appropriate Officer has to take adecision. In the instant case, it appears that,no such specific instruction is issued toMr.M.Swaminathan, the learned Senior StandingCounsel to withdraw the Appeal, nor, can we compelthe learned counsel to withdraw the Appeal. 16. Having held that the Circular issued byCBDT is applicable to the case on hand and the taxeffect being less than the threshold limitprescribed in the Circular, we dismiss the presentAppeal by applying the law laid down by theHon'ble Supreme Court, in Surya Herbal Ltd., case(supra), as the two caveats mentioned thereunderdoes not arise in the instant case.”4.By applying the above decision, we dismiss thistax case (appeal) on the ground of low tax effect andin terms of the above referred decision, leave thesubstantial question of law, which has been framed forconsideration. No costs." 4.In such view of the matter and in view of the circularissued by the Central Board Direct Taxes in Circular No.21/2015dated 10.12.2015, this tax case appeal is dismissed on theground of low tax effect, leaving the substantial questions oflaw open, which have been framed for consideration. No costs. Sd/- Assistant Registrar(CO) mmi //True Copy// Sub Assistant Registrar To https://hcservices.ecourts.gov.in/hcservices/ 2.The Commissioner of Income Tax (Appeals)-I, CoimbatoreCoimbatore 4.In such view of the matter and in view of the circularissued by the Central Board Direct Taxes in Circular No.21/2015dated 10.12.2015, this tax case appeal is dismissed on theground of low tax effect, leaving the substantial questions oflaw open, which have been framed for consideration. No costs. Sd/- Assistant Registrar(CO) mmi //True Copy// Sub Assistant Registrar To https://hcservices.ecourts.gov.in/hcservices/ 2.The Commissioner of Income Tax (Appeals)-I, CoimbatoreCoimbatore 3.The Income Tax Officer, Ward-II(3), CoimbatoreWard-II(3), Coimbatore 4.The Commissioner of Income Tax, 67A, Race Course Road, Coimbatore.67A, Race Course Road, Coimbatore. +1cc to Mr.T.R.Senthil Kumar, Advocate, S.R.No.48246 +1cc to Mr.Subbaraya Aiyar, Advocate, S.R.No.48772 T.C.(A).No.858 of 2010 SVN(CO)CS/01/08/18