Principal Commissioner Of Income Tax 7 v. M/S.enrec Engineers

IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 29.08.2019 CORAM THE HONOURABLE MR.JUSTICE T.S.SIVAGNANAMandTHE HONOURABLE MRS.JUSTICE V.BHAVANI SUBBAROYAN Tax Case Appeal Nos.409 and 410 of 2017 Principal Commissioner of Income Tax 7,No.121, Mahatma Gandhi Road,Chennai-600 034. .. Appellant in both Appeals /Appellant -vs- M/s.Enrec Engineers,No.49, 13[th] Cross Street,New Colony, Chrompet, Chennai-600 044.PAN: AABFE 3594 Q.. Respondent in both Appeals/Respondent Appeals under Section 260A of the Income-tax Act, 1961,against the common order dated 21.09.2016, made inI.T.A.Nos.1910 & 1911/Mds/2016 on the file of the Income TaxAppellate Tribunal 'A' Bench, Chennai for the assessment years2009-10 and 2010-11 respectively, against the Order dated28/03/2016 made in PAN. on the file of theCommissioner of Income Tax (Appeals)-10, Chennai - 34 for theAssessment year 2009-10 and 2010-11 and against the Order dated26/03/2013 made in PAN/GIR No. on the file of theDeputy Commissioner of Income Tax, Business Circle-I, No.7,Ramakrishna Street, West Tambaram, Chennai - 45 for theAssessment year 2010-11 and against the Order dated 26/03/2013made in PAN/GIR No. on the file of the DeputyCommissioner of Income Tax, Business Circle - I, West Tambaram,Chennai-45 for the Assessment year 2009-10. For Appellant:Mr.Karthik Ranganathan,(In both Appeals)Senior Standing Counsel:assisted by Mr.S.Rajesh,Standing Counsel For Respondent :Mr.R.Kumar and(In both Appeals) Mr.T.N.Seetharaman Common Judgment delivered by T.S.Sivagnanam, J. These appeals filed by the Revenue under Section 260A of theIncome-tax Act, 1961 are directed against the common order dated21.09.2016, made in I.T.A.Nos.1910 & 1911/Mds/2016 on the fileof the Income Tax Appellate Tribunal 'A' Bench, Chennai for theassessment years 2009-10 and 2010-11 respectively. 2.The appeals were admitted on 02.08.2017, on the followingsubstantial questions of law:- “(i) Whether the Appellate Tribunal was rightin deleting the addition made under Section 40(a)(ia) of the Income Tax Act, 1961 in respect oflabour expenses debited to Profit and Loss Accounton which tax was not deducted at source underSection 194C of the Income Tax Act, 1961 or notremitted within due date? (ii) Whether on the facts and circumstances ofthe case and in law, the Tribunal was right inholding that disallowance under Section 40(a)(ia)of the Income Tax Act, 1961 is applicable only topayments towards expenses payable as on 31[st] Marchof the previous year, when the section does notprovide for any such condition? and(iii) Whether the Tribunal was justified inremitting the issue of addition under Section 40(a)(ia) of the Income Tax Act, 1961 to theAssessing Officer with a direction to follow thedecision of ITAT Special Bench at Vizag in thecase of Merilyn Shipping & Transporters when suchdecision was stayed by Andhra Pradesh High courtand whether such direction of Tribunal is perversein law?” 3.Heard Mr.Karthik Ranganathan, learned Senior StandingCounsel assisted by Mr.S.Rajesh, learned Standing Counsel forthe appellant – and Mr.R.Kumar, learned counsel for therespondent. 4.The learned Senior Standing Counsel for the appellantsubmits that the above appeals are not pursued by the Revenue onaccount of the low tax effect in terms of Circular No.17/2019,dated 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. 3.Heard Mr.Karthik Ranganathan, learned Senior StandingCounsel assisted by Mr.S.Rajesh, learned Standing Counsel forthe appellant – and Mr.R.Kumar, learned counsel for therespondent. 4.The learned Senior Standing Counsel for the appellantsubmits that the above appeals are not pursued by the Revenue onaccount of the low tax effect in terms of Circular No.17/2019,dated 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 caseappeals are dismissed on account of the low tax effect. Thesubstantial questions of law framed are left open. In the eventthe tax effect is above the threshold limit fixed in the saidcircular, liberty is granted to the Revenue to make a mention tothis Court to restore the appeals to be heard and decided onmerits. No costs. Sd/- Assistant Registrar (CS-V) //True Copy// Sub Assistant RegistrarabrTo1. The Income Tax Appellate Tribunal 'A' Bench, Chennai.2. The Commissioner of Income TAx (Appeals-10), Chennai - 34.3. The Deputy Commissioner of Income Tax, Business Circle-I, No.7, Ramakrishna Street, West Tambaram, Chennai - 45 +1 cc to Mr.T.N.Seetharaman, Advocate, S.R.No.75291T.C.A.Nos.409 and 410 of 2017SR(CO)SSM(05/11/2019)