Commissioner Of Income Tax,Central I v. S.p.natarajan

IN THE HIGH COURT OF JUDICATURE AT MADRAS Dated : 21.06.2018 Coram THE HONOURABLE MR. JUSTICE M.M.SUNDRESHandTHE HONOURABLE MR. JUSTICE N.ANAND VENKATESH T.C.(A). No.210 of 2010 Commissioner of Income Tax,Central I. .. Appellant/Respondent vs. S.P.Natarajan.. Respondent/Appellant Prayer: Appeal filed under Section 260A of the Income Tax Act,1961 against the order of the Income Tax Appellate Tribunal "C"Bench, Chennai dated 18.09.2009 passed in I.T.(SS)A.No.74/Mds/2008 preferred against the order dated 26.05.2008made in I.T.A.No.231 of 2006-2007 by commissioner of Income Tax(Appeals), Tiruchirapalli, against the order of AssistantCommissioner of Income Tax, Central Circle-I, Tiruchirapalli,dated 29.03.03 made in GIR No.N-3001. For Appellant :Mr.T.R.Senthil Kumarand Mr.S.RajeshFor Respondent :Mr.M.P.Senthil Kumar JUDGMENT (Judgment of the Court was delivered by M.M.SUNDRESH, J.) The Revenue is on appeal by raising the followingsubstantial questions of law in respect of the block assessmentyear 1988-1989 to 1998-1999 (upto 11.12.1997):"(1) Whether on the facts and in thecircumstances of the case, the Income Tax AppellateTribunal was holding that as against the sum ofRs.21,71,100/- assessed as the assessee's undisclosedincome for the block period being the investment inthe money lending business, only a sum ofRs.5,00,000/- could be assessed as pertaining to the https://hcservices.ecourts.gov.in/hcservices/ assessee, merely on the basis of the statements givenby the assessee and his two sons and the cash flowstatements prepared after the search ignoring the factthat the Assessing Officer had worked out the totaladvances made by the assessee on the basis of theseized material? (2)Whether on the facts and in the circumstancesof the case, the Income Tax Appellate Tribunal wasright in ignoring the presumption u/s 132 (4A) of theIncome Tax Act to the effect that the seized materialbelonged to the assessee and the entries were true inthe absence of any rebuttal by the assessee of thepresumption with concrete evidence? 2.Heard the learned counsel appearing for the appellant andthe learned counsel appearing for the respondent. 3.Learned counsel appearing for the respondent 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 have not attained finality under Section 269 I of theAct as defined in the explanation to the saidSection. ........................... not 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 bythe 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." 5.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(CS-vii)//True Copy// Sub Assistant RegistrarmmiToThe Registrar, Income Tax Appellate Tribunal,"C" Bench, Chennai.2. The Commissioner of Income Tax(Appeals),Tiruchirapalli.3. The Assistant Commissioner of Income Tax,Central Circle -I, Tiruchirapalli.+1cc to Mr.T.R.SENTHILKUMAR, Advocate, S.R.No.39396 +1cc to Mr.PHILIP GEORGE, Advocate, S.R.No.39490 T.C.(A).No.210 of 2010SSV(CO)TR(06/07/2018)