Principal Commissioner Of Income Tax 7 v. M/S.tag Corporation

IN THE HIGH COURT OF JUDICATURE AT MADRASDATED : 18.12.2019 CORAM : THE HONOURABLE MR.JUSTICE N.KIRUBAKARAN andTHE HONOURABLE MR.JUSTICE P.VELMURUGAN Principal Commissioner of Income Tax 7,No.121, Mahatma Gandhi Road,Chennai 600 034.... Appellant (in all the appeals)Vs M/s.Tag Corporation,91, Thiruneermalai Road,Chrompet, Chennai 600 044.PAN: AAA FT 1842 P... Respondent (in all the appeals) PRAYER : Appeals under Section 260A of the Income Tax Act, 1961against the order of the Income Tax Appellate Tribunal, Madras“C” Bench, dated 15.07.2016 passed in ITA.Nos.2192 to2194/Mds/2015 against the order of the Commissioner of IncomeTax (appeals)10 Chennai dated 14.09.2015 in I.T.A. No. 38/2013-2014/CIT(A)-10 and I.T.A. 45(2014-2015) and 11(2015-2016) dated21.09.2015 against the order of the Deputy Commissioner ofIncome Tax, Non Corporate Circle 22 Chennai dated 28.03.2013,26.03.2014 & 23.03.2015 in under Section 143(3) of the IncomeTax Act 1961 for the Assessment year 2010-2011, 2011-2012, 2012-2013 made in PAN GIR No. These Tax Case Appeals have been preferred by the Revenueagainst the order dated 15.07.2016 passed in ITA.Nos.2192 to2194/Mds/2015 on the file of the Income Tax Appellate Tribunal,Chennai 'C' Bench for the assessment years 2010-11 to 2012-13. https://hcservices.ecourts.gov.in/hcservices/ 2.The impugned order was filed by the Assessee aggrieved bythe order of the CIT(A)-10, Chennai, dated 14.09.2015 &21.09.2015 in ITA Nos.38, 45 & 11/2013-14/2014-15/2015-16/CIT(A)-10, passed under Section 143(3) r.w.s.250(6) of the IncomeTax Act, where the Tribunal accepted the plea of the Assesseeand allowed the Appeals. 3.These Appeals are admitted on the following substantialquestions of law :“(i)Whether on the facts and circumstances of the case,the Appellate Tribunal was right in holding that thetesting charges paid to a Canadian entity was not “feesfor technical services” and there was no requirement todeduct tax at source under Section 195 of the Income TaxAct?(ii)Whether the Appellate Tribunal was correct in notconsidering that the provisions of Section 9(1)(vi)/(vii) as amended by insertion of Explanation by theFinance Act, 2010 with retrospective effect from01.06.1976 and the provisions of Section 195(2) of theIncome Tax Act for the testing charges? " 4.Mr.Karthik Ranganathan, learned Senior Standing Counselappearing on behalf of the appellant would submit that the taxeffect in these cases are less than Rs.1 crore and is covered byCircular No.17/2019 dated 08.08.2019 issued by the Director,Central Board of Direct Taxes, Department of Revenue, Ministryof Finance, Government of India, Delhi. As per the saidcircular, the monetary limit to file an appeal before the HighCourt is fixed at Rs.1 crore. In these cases, tax effect isless than Rs.1 crore and therefore, these cases have to bedismissed. 5.This Court perused the circular dated 08.08.2019 andParagraph No.2 of the said Circular, which prescribes monetarylimit for filing appeal is usefully extracted as follows: 2.As a step towards further management of litigation,it has been decided by the Board that monetary limitsfor filing of appeals in income-tax cases be enhancedfurther through amendment in Para 3 of the Circularmentioned above and accordingly, the table formonetary limits specified in Para 3 of the Circularshall read as follows: 5.This Court perused the circular dated 08.08.2019 andParagraph No.2 of the said Circular, which prescribes monetarylimit for filing appeal is usefully extracted as follows: 2.As a step towards further management of litigation,it has been decided by the Board that monetary limitsfor filing of appeals in income-tax cases be enhancedfurther through amendment in Para 3 of the Circularmentioned above and accordingly, the table formonetary limits specified in Para 3 of the Circularshall read as follows: 6.In view of the submissions made by the learned counselappearing on behalf of the appellant and also in view of theCircular No.17/2019 dated 08.08.2019 issued by the Director,Central Board of Direct Taxes, Delhi, these Tax Case Appeals aredismissed on account of tax effect. However, the substantialquestion of law framed is left open. In the event the taxeffect is above the limit fixed in the said circular, liberty isgranted to the Revenue to make a mention to this Court torestore the appeals to be heard and decided on merits. No costs.Consequently, connected Miscellaneous Petitions are closed. s/d- Assistant Registrar(CO) True Copy Sub-Assistant RegistrarTo1.The Principal Commissioner of Income Tax 7,No.121, Mahatma Gandhi Road,Chennai 600 034.2.Income Tax Appellate Tribunal 'C' Bench,Chennai. 3.The Commissioner of Income Tax (Appeals)10Chennai 4.The Deputy Commissioner of Income TaxNon Corporate Circle 22Chennai T.C.A.Nos.543 to 545 of 2018 GP(CO)SP(06/02/2020) https://hcservices.ecourts.gov.in/hcservices/