Commissioner Of Income Tax, Coimbatore v. M/S.precot Mills Ltd., Coimbatore

In the High Court of Judicature at MadrasDated : 15.6.2020 The Honourable Mr.Justice T.S.SIVAGNANAMandThe Honourable Mrs.Justice PUSHPA SATHYANARAYANA Tax Case Appeal No.147 of 2013 Commissioner of Income Tax, Coimbatore...AppellantVs M/s.Precot Mills Ltd.,Coimbatore...Respondent APPEAL under Section 260A of the Income Tax Act, 1961 againstthe order dated 19.7.2012 made in ITA.No.966/Mds/2012 on thefile of the Income Tax Appellate Tribunal, Chennai 'B' Bench forthe assessment year 2005-06, against the appellate Order passedby the commissioner of Income Tax(A)-1, Coimbatore, dated08/02/2012 made in Appeal No.70/10-11, and against theassessment order passed by the Assistant Commissioner of IncomeTax Company Circle-1(2) Coimbatore, dated 31/08/2010, 31/12/2007made in PAN/GIR No. for the Assessment year 2005-2006. For Appellant :Mr.T.R.Senthilkumar, SSC & Ms.K.G.Usharani, SC For Respondent:Mr.A.S.Sriraman We have heard Mr.T.R.Senthilkumar, learned Senior StandingCounsel and Ms.K.G.Usharani, learned Standing Counsel appearingfor the appellant – Revenue and Mr.A.S.Sriraman, learned counselappearing for the respondent. 2. This appeal, filed by the Revenue under Section 260A ofthe Income Tax Act, 1961 (for short, the Act) is directedagainst the order dated 19.7.2012 made in ITA.No.966/Mds/2012 onthe file of the Income Tax Appellate Tribunal, Chennai 'B' Bench 1 https://hcservices.ecourts.gov.in/hcservices/ (for brevity, the Tribunal) for the assessment year 2005-06. 3. The appeal has been admitted on 10.4.2013 on the followingsubstantial questions of law : “i. Whether, under the facts andcircumstances of the case, the Income TaxAppellate Tribunal was right in holding thatpart of an industrial unit itself can betreated as an independent industrialundertakingentitledforadditionaldepreciation as provided in Section 32(1)(iia), though looms are only part of theindustrial undertaking of the assessee ? 2. Whether, under the facts andcircumstances of the case, the Income TaxAppellate Tribunal was right in holding thatthe weaving division can be considered as aseparate undertaking for determining theclaimforallowanceofadditionaldepreciation as provided in Section 32(1)(iia) of the Income Tax Act? 3. Whether, on the facts andcircumstances of the case, the Income TaxAppellate Tribunal was right in holding thatthe non filing of audit report in Form 3AAas prescribed in Third Proviso to Section 32(1)(iia) is only a procedural lapse ? And 4. Whether, on the facts andcircumstances of the case, the Income TaxAppellate Tribunal was right in holding thatthe requirement for filing of the auditreport along with the return of income isonly directory and not mandatory ?” 4. The learned Senior Standing Counsel for the appellantsubmits that the above appeal is not pursued by the Revenue onaccount of the low tax effect in terms of Circular No.17/2019dated 08.8.2019 issued by the Central Board of Direct Taxes. Bythe said Circular, the monetary limit for filing or pursuing anappeal before the High Court has been increased to Rs.1 Crore.It is further submitted that the tax effect in this case is lessthan the threshold limit. 5. In the light of the said submissions, the above tax caseappeal is dismissed on account of the low tax effect. Thesubstantial questions of law framed are left open. In the eventthe tax effect is above the threshold limit fixed in the saidcircular, liberty is granted to the Revenue to make a mention to this Court to restore the appeal to be heard and decided onmerits. No costs. Sd/- Assistant Registrar //True Copy// Sub Assistant Registrar RS To 1.The Income Tax Appellate Tribunal, Chennai 'B' Bench.2.The Commissioner of Income Tax(A)-1 Coimbatore.3.The Assistant Commissioner of Income Tax, Company Circle-1(2), Coimbatore.TCA.No.147 of 2013EV(CO)CB(23/09/2020) 3