Commissioner Of Income Tax,Chennai v. Dr.(Mrs) S.nirmala,Maruthi Medical Centre & Hospital,Perundurai Road, Erode

IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 06.06.2018 CORAM THE HONOURABLE MR.JUSTICE T.S.SIVAGNANAMandTHE HONOURABLE MR.JUSTICE N.SESHASAYEE T.C.(Appeal) Nos.819 and 820 of 2008 T.C.(A).No.819 of 2008:- Commissioner of Income Tax,Chennai. vs. Dr.(Mrs) S.Nirmala,Maruthi Medical Centre & Hospital,Perundurai Road, Erode. ... Appellant ... Respondent Tax Case (Appeal) filed under Section 260A of Income TaxAct, 1961, against the order of the Income Tax AppellateTribunal, Madras "D" Bench, dated 13.04.2007 in I.T(SS).A.No.202/Mds/2006 for the assessment years 1996-97 to 2002-03till 06.03.2002 as against the proceedings of the Commissionerof income Tax (Appeals)-II, Coimbatore, in ITA.NO.370-C/2004-05dated 4.10.2006. T.C.(A).No.820 of 2008:-Commissioner of Income Tax,Chennai.vs. ... Appellant Dr.M.N.Sadasivam,Maruthi Medical Centre & Hospital,Perundurai Road, Erode.... Respondent Tax Case (Appeal) filed under Section 260A of Income TaxAct, 1961, against the order of the Income Tax AppellateTribunal, Madras "D" Bench, dated 13.04.2007 in I.T(SS).A.No.203/Mds/2006 for the assessment years 1996-97 to 2002-03till 06.03.2002 as against the order of Commissioner of IncomeTax (Appeals) dated 4.10.2006 in I.T.A.NO.369C/04-05 For Appellant:Mr.T.R.Senthil Kumar(in both T.Cs.)and Mr.S.RajeshFor Respondent :Mr.Niranjan Rajagopalan(in both T.Cs.)for M/s.G.R.Associates https://hcservices.ecourts.gov.in/hcservices/ (Judgment of the Court was delivered by T.S.SIVAGNANAM, J.) Heard M/s.T.R.Senthil Kumar and Mr.S.Rajesh, learnedcounsel for the appellant / Revenue and Mr.M.P.Senthil Kumar,learned counsel for the respondents / assessees. 2. These tax case (appeals) have been admitted on thefollowing substantial question of law:- "Whether on the facts and in thecircumstances of the case, the Appellate Tribunalwas right in holding that penalty under Section158BFA(2) of the Act cannot be levied when theassessee had retracted his own sworn statementunder Section 132(4) of the Act in spite of thesworn statement recorded from the seller whoadmitted the receipt 'on-money'?" 3. It may not be necessary for us to decide thesubstantial question of law framed for consideration, on accountof the low tax effect in these appeals. This issue wasconsidered by us in the case of Commissioner of Income Tax vs.N.Meenakshisundaram in T.C.(A) Nos.868 & 869 of 2008 dated23.04.2018, by taking note of the Circular Instructions issuedby the Central Board of Direct Taxes (CBDT) and also taking noteof the submissions of the Revenue, the relevant portions ofwhich 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. ........... ........................... 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 these taxcase (appeals) on the ground of low tax effect and in terms ofthe above referred decision, leave the substantial question oflaw, which has been framed for consideration. No costs. abr To 1.The Commissioner of Income Tax, Chennai. 2.The Income Tax Appellate Tribunal, Madras "D" Bench. 3.The Commissioner of Income Tax (Appeals)-II, The Office of the Commissioner of Income Tax (Appeals)-II, Coimbatore. 4. The Office of the Commissioner of Income Tax (Appeals)-II,Coimbatore. + 1 cc to Mr. T.R. Senthilkumar, Advocate Sr.35440+ 2 ccs to M/s. G.R. Associates, Advocate Sr.35778, 35779T.C.(Appeal) Nos.819 and 820 of 2008PPA(CO)EU(03/08/2018)