Commissioner Of Income Tax,Chennai v. The All India Skin & Hidetanners And Merchantassociation

IN THE HIGH COURT OF JUDICATURE AT MADRAS CORAM THE HON'BLE MR.JUSTICE M.DURAISWAMYANDTHE HON'BLE MR.JUSTICE KRISHNAN RAMASAMY T.C.A.NO.62 OF 2016 Commissioner of Income Tax,Chennai.... Appellant Vs. The All India Skin & hideTanners and MerchantAssociation, No.43 (old 53)Raja Muthiah Road, Periamet,Chennai – 600 003.... Respondent Appeal preferred under Section 260A of the Income Tax Act,1961, against the order of the Income Tax Appellate Tribunal,Madras, “A” Bench, dated 06.06.2014 in I.TA.No.1751/Mds/2013,Assessment Year 2009-10. Against the Order of the Commissioner of Income Tax(Appeals)-VII, Chennai dated 21.08.2013 in ITA.No.634/11-12,GIR.No.PAN/TAN.No. for the Assessment Year 2009-10against the order of the Joint Commissioner of Income Tax (OSD)(Exemption)II, Chennai dated 30.12.2011 in PAN/GI.No.AAATA0492Jfor the Assessment Year 2009-10. For Appellant : Mr.J.NarayanaswamySenior Standing Counsel For Respondent : Mr.G.Baskar We have heard Mr.J.Naryanaswamy learned Senior StandingCounsel for the appellant/Revenue and Mr.G.Baskar, learnedcounsel for the respondent/assessee. 2.The appeal, filed by the Revenue under Section 260A of theIncome Tax Act, 1961 (for short, the Act) is directed against https://hcservices.ecourts.gov.in/hcservices/ the order dated 06.06.2014 made in I.TA.No.1751/Mds/2013 on thefile of the Income Tax Appellate Tribunal, Chennai, “A” Bench(for brevity, the Tribunal) for the Assessment Year 2009-10. 3.The appeal was admitted on 15.02.2016 on the followingsubstantial questions of law: “1.Whether on the facts and circumstances ofthe case, the Tribunal was right in law inholding that the society is eligible forexemption under Section 11 of the Income Tax Act,in complete disregard to the facts of the caseand provisions of newly inserted provisos toSection 2(15) of the Income Tax Act? 2.Whether on the facts and circumstances ofthe case, the Tribunal was right in law inholding that the activities of the assesseesociety are governed under 'principles ofmutuality' even though the society is registeredunder Section 12AA of the Income Tax Act as a'charitable entity' and has been claiming thatstatus all along, more so when Kerala High Courtin the case of M/s.Investors Club, Trichur vs.CIT [318 ITR 427 (Ker.)] has clearly held that a'charitable institution' cannot raise the 'pleaof mutuality'? 3.Whether on the facts and in thecircumstances of the case and in law, the orderof the Tribunal was not against the principle of'judicial consistency' in as much as it waspassed in disregard of the findings of itsearlier order in ITA Nos.2749, 2750 and2751/Mds/1994 for assessment years 1998-99, 1990-91 and 1991-92 where a clear finding had beengiven that the assessee's activities are in thenature of 'advancement of objects of generalpublic utility' and such decision had alreadyreached finality? And 4.Whether on the facts and in thecircumstances of the case, the Tribunal was rightin law in holding that reference made by theAssessing Officer to the D.I.T.(E) has statutorypowers to cancel the registration under Section12AA(3), if he is satisfied that the activitiesof the society are not genuine or are not beingcarried out in accordance with the objects, moreso when such an order is yet to be passed?” 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 08.08.2019 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. 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 08.08.2019 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 as withdrawn on account of the Low TaxEffect. The substantial questions of law framed are left open.In the event the tax effect in this case is above the thresholdlimit fixed in the said Circular, liberty is granted to theRevenue to make a mention to this Court to restore the appeal tobe heard and decided on merits. No costs. Sd/- Assistant Registrar(CS IV)//True Copy// Sub Assistant RegistrarmknTo1.The Income Tax Appellate Tribunal, Chennai, “A” Bench2.The Commissioner of Income Tax,Chennai. 3.The Commissioner of Income Tax (Appeal)-VII,Chennai. 4.The Joint Commissioner of Income Tax (OSD) (Exceptions)IIChennai. +1cc to Mr.M.P.Senthil Kumar, Advocate, S.R.No.24484 T.C.A.No.62 of 2016 SNII(CO)CS/28/06/2021