Commissioner Of Income Tax,Company Circle Iv(2 v. M/S.roots Multiclean Ltd.,Rkg Industrial Estate,Ganpathy,Coimbatore - 641 006

IN THE HIGH COURT OF JUDICATURE AT MADRAS Dated : 05.07.2018 Coram THE HONOURABLE MR. JUSTICE M.M.SUNDRESHandTHE HONOURABLE MR. JUSTICE N.ANAND VENKATESH T.C.(A). Nos.7, 14 and 30 of 2010 Commissioner of Income Tax,Company Circle IV(2)... Appellant in all the appeals vs. M/s.Roots Multiclean Ltd.,RKG Industrial Estate,Ganpathy,Coimbatore - 641 006... Respondent in all the appeals Prayer:- Appeals filed under Section 260A of the Income Tax Act, 1961against the orders of the Income Tax Appellate Tribunal "D"Bench, Chennai dated 30.11.2007 passed in ITA Nos.1194/Mds/2006,1195/Mds/2006 and 1301/Mds/2006, preferred against the order ofthe Commissioner of Income Tax (Appeals)-I Coimbatore, dated09.03.2006, made in A.No.175/04-05 and 435/04-05, against theorder of the Deputy Commissioner of Income Tax, dated 17.01.2005and 18.03.2004 made in PAN/GIR NO.AABCRO315 for the AssessmentYear 2000-2001 and 2001-2002. For Appellant:Mr.T.R.Senthil Kumarand Mr.S.Rajesh in all the appealsFor Respondent :Mr.A.S.Sriramanfor Mr.S.Sridhar in all the appeals COMMON JUDGMENT (Judgment of the Court was delivered by M.M.SUNDRESH, J.) The Revenue has filed these appeals by raising thefollowing substantial questions of law: https://hcservices.ecourts.gov.in/hcservices/ 1.Whether on the facts and circumstances of thecase, the Tribunal was right in holding that theAnnual Maintenance Charge is to be included in thetotal turnover for the purpose of claiming deductionunder Section 80HHC? 2.Whether on the facts and circumstances of thecase, the Tribunal is right in holding that deductionunder MAT credit is to be worked out on the basis ofadjusted book profits and not on the basis of profitcomputed under regular provision of law applicable tocompletion of profits and gains of business orprofession? 2.Though two substantial questions of law have been raised,the appeals were admitted only on the first substantial questionof law. In sofar as the second substantial question of law, thesame was rejected by this Court by relying on the decisions inK.R.M. Marine Exports Ltd., Vs. Assistant Commissioner of IncomeTax (201 CTR 1) and Commissioner of Income Tax Vs. RajinikanthSchenelder & Associates Private Limited (302 ITR 22)respectively. 3.Heard the learned counsel appearing for the appellant.There is no representation on behalf of the respondent. 4.Learned counsel appearing for the appellant submits thatthe issue involved in these appeals 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 learned Senior 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 are https://hcservices.ecourts.gov.in/hcservices/ "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 learned Senior 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 are https://hcservices.ecourts.gov.in/hcservices/ admitted 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 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 thereunder does 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, these tax case appeals are dismissed on theground of low tax effect, leaving the substantial question oflaw open, which has been framed for consideration. No costs. Sd/- Assistant Registrar(CS II) //True Copy// Sub Assistant RegistrarmmiTo1.The Income Tax Appellate Tribunal,"D" Bench, Chennai.2.The Commissioner of Income Tax (Appeals)-I.Coimbatore.3.The Deputy Commissioner of Income Tax,Company Circle IV(2), Coimbatore.4.The Assistant Registrar,Income Tax Appellate Tribunal,III rd Floor, Rajaji Bahavan, Besant Nagar, Chennai-90. +1cc to Mr.S.Sridhar, Advocate, S.R.No.43776+1cc to Mr.T.R.Senthil Kumar, Advocate, S.R.No.43873 T.C.(A).Nos.7, 14 and 30 of 2010ssv(co)cs/23/07/18