Principal Commissioner Of Income Tax-3, Coimbatore-18 v. M/S.r.easwaran Huf, Tirupur.pin

In the High Court of Judicature at Madras Dated : 06.7.2020 Coram : The Honourable Mr.Justice T.S.SIVAGNANAM and The Honourable Mrs.Justice V.BHAVANI SUBBAROYAN Tax Case Appeal No.292 of 2019 Principal Commissioner of Income Tax-3, Coimbatore-18 ...Appellant Vs M/s.R.Easwaran HUF, Tirupur.Pin : 641605...RespondentAPPEAL under Section 260A of the Income Tax Act, 1961againsttheorderdated03.12.2018madeinITA.No.591/Chny/2018 on the file of the Income TaxAppellate Tribunal, Chennai 'B' Bench for the assessmentyear 2011-12, against the order dated 8/12/2017 made in CIT(A) in ITA no.87/17-18 on the file of the commissioner ofIncome Tax(Appeals)-3, Coimbatore for the Assessment year2011-12 dt.8/12/17 and against the order dated 21/10/2016made in ITA No.168/mds/2016 & 421/mds/2016 on the file ofthe Income Tax appellate Tribunal C Bench, Chennai for theAssessment year 2011-12, and the order dated 30/03/2014made in PAN No./GIR No. on the file of the DeputyCommissioner of Income Tax, Circle-I, Tiruppur for theassessment year 2011-12. Judgment was delivered by T.S.Sivagnanam,J We have heard Mr.T.R.Senthilkumar learned SeniorStanding Counsel, assisted by Ms.K.G.Usharani, Standingappearing for the appellant – Revenue and Mr.N.V.Balaji,learned counsel appearing for the respondent. https://hcservices.ecourts.gov.in/hcservices/ 2. This appeal, filed by the Revenue under Section 260Aof the Income Tax Act, 1961 (for short, the Act) isdirected against the order dated 03.12.2018 made inITA.No.591/Chny/2018 on the file of the Income TaxAppellate Tribunal, Chennai 'B' Bench (for brevity, theTribunal) for the assessment year 2011-12. 3. The appeal has been admitted on 03.6.2019 on thefollowing substantial questions of law : ““i. Whether, on the facts and inthe circumstances of the case and inlaw, the Income Tax Appellate Tribunalis justified in deleting the penaltylevied under Section 271(1)(c), when itis the first year of finance businessby the assessee and hence, the writeoff claim is outside the purview ofSection 36(1)(vii) read with Section 36(2) and as such tantamount to filing ofinaccurate particulars ?ii. Whether the Appellate Tribunalwas justified in deleting the penaltywhentheassesseefailedtosubstantiate that the loss arose in theordinary course of carrying on financebusiness, but ostensibly claiming it as'bad debts' after closure of books forthe relevant previous year fallssquarely within the ambit of furnishinginaccurate particulars ?iii. Whether the Appellate Tribunalis right in deleting the penalty forfurnishing inaccurate particulars, whenthe write off was not reflected in thebooks on the date of survey on21.7.2011 after closure of books on31.3.2011 and hence, write off is notin the regular course of maintenance ofbooks, is an afterthought to reduce theliability ? Andiv. Whether, on the facts andcircumstances of the case, theAppellate Tribunal is correct incanceling the penalty levied underSection 271(1)(c) of the Act infollowing the Supreme Court judgment inthe case of CIT Vs. ReliancePetroproducts P. Ltd. [reported in 322ITR158],whichisclearly distinguishable to the facts of theassessee's case?” 4. The learned Senior Standing Counsel for the appellantsubmits that the above appeal is not pursued by the Revenueon account of the low tax effect in terms of CircularNo.17/2019 dated 08.8.2019 issued by the Central Board ofDirect Taxes. By the said Circular, the monetary limit forfiling or pursuing an appeal before the High Court has beenincreased to Rs.1 Crore. It is further submitted that thetax effect in this case is less than the threshold limit. distinguishable to the facts of theassessee's case?” 4. The learned Senior Standing Counsel for the appellantsubmits that the above appeal is not pursued by the Revenueon account of the low tax effect in terms of CircularNo.17/2019 dated 08.8.2019 issued by the Central Board ofDirect Taxes. By the said Circular, the monetary limit forfiling or pursuing an appeal before the High Court has beenincreased to Rs.1 Crore. It is further submitted that thetax effect in this case is less than the threshold limit. 5. In the light of the said submissions, the above taxcase appeal is dismissed on account of the low tax effect.The substantial questions of law framed are left open. Inthe event the tax effect is above the threshold limit fixedin the said circular, liberty is granted to the Revenue tomake a mention to this Court to restore the appeal to beheard and decided on merits. No costs. Sd/- Assistant Registrar //True Copy// Sub Assistant Registrar To 1.The Income Tax Appellate Tribunal, Chennai 'B' Bench. 2.The Commissioner of Income Tax (Appeals)-3,Chennai. 3.The Assistant Commissioner of Income Tax,Circle-2, Tirupur-641 602.Circle-2, Tirupur-641 602. 4.The Income Tax Appellate Tribunal 'c' Bench, Chennai. 5.The Deputy Commissioner of Income-TaxCircle, Tirupur.Circle, Tirupur. NR(CO)CB(18/08/2020) TCA.No.292 of 2019