Principal Commissioner Of Income Tax, Central 2 v. Shri. Subramanian Kulanthyaian

IN THE HIGH COURT OF JUDICATURE AT MADRASDATED: 03.12.2019 CORAMTHE HONOURABLE MR. JUSTICE N. KIRUBAKARANANDTHE HONOURABLE MR. JUSTICE P. VELMURUGANT.C.A. No. 982 of 2019 Principal Commissioner of Income Tax,Central 2, No.108, Mahatma Gandhi Road,Chennai...Appellant Vs.Shri. Subramanian Kulanthyaian..Respondent Prayer:Appeal under Section 260A of the Income Tax Act, 1961against the order of the Income Tax Appellate Tribunal, Madras'B' Bench, dated 13.03.2019 in ITA No. 155/Chny/2018, againstthe O/o.Commissioner of Income Tax (Appeals)-19, Mahatma GandhiRoad, Nungambakkam, Chennai-34 and made in ITA.No.250/16-17,dated 16.10.2017 and against the O/o.the Assistant Commissionerof Income Tax, Central Circle-2, Trichy and made inPAN/GIR.no.AHZPK0911G, dated 20/12/2016 for the Assessment Year2014-15.For Appellant::Mr.T.R. SenthilkumarSenior Standing CounselFor Respondent ::Mr.M. Kaushik forMr.S. Sridhar J U D G M E N T(Judgment of the Court was delivered by N. KIRUBAKARAN,J.)This Tax Case Appeal has been preferred by the Revenueagainsttheorderdated13.03.2019passedinITA.No.155/Chny/2018 on the file of the Income Tax AppellateTribunal, Madras 'B' Bench for the assessment year 2014-2015. https://hcservices.ecourts.gov.in/hcservices/ 2.The respondent/assessee, an individual, aggrieved by theorder of the Assessing Officer making an addition ofRs.2,94,02,600/- under Section 69A of the Income Tax Act, 1961,as unexplained cash deposits, based on the return of incomefiled by the assessee for the assessment year 2014-2015,preferred an appeal before the Commissioner of Income Tax(Appeals). The Commissioner of Income Tax (Appeals) rejectedthe addition as incorrect and aggrieved by the appellate order,both the Department as well as the assessee preferred appealsbefore the Tribunal, which were rejected by the order underchallenge. Against the order of the Appellate Tribunal only,the present appeal has been filed by the Revenue. 3.The appeal is admitted on the following substantialquestions of law : “1.Whether on the facts and in thecircumstances of the case, the ITAT is correct in lawin not appreciating that, in spite of severalopportunities provided by the assessing officer, theassessee was unable to provide the details called forin respect of cash deposits, amounting to severalcrores?2.Whether the Appellate Tribunal is justifiedin allowing the claim of peak credit adopted by theCIT(A) ignoring that no books of accounts' have beenmaintained by the assessee and the deposits remainunexplained and the assessee has failed to establishone-to-onecorrelationbetweendepositsandwithdrawals?3.Whether the ITAT is correct in law inaccepting the peak credit adopted by the CIT(A), whichis not a scientific method to arrive at theundisclosed income, ignoring that there areoutstanding advances not returned back also, whichwill escape tax net?4.Whether the highest fact finding authorityis right in law dismissing the case when assessee wasproved to be factual wrong in claiming peak creditmethod since no books of accounts for any of theAssessment Year being maintained by the assessee?” 4.Mr.T.R. Senthilkumar, learned Senior Standing Counselappearing on behalf of the appellant would submit that the taxeffect in this case is 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 High https://hcservices.ecourts.gov.in/hcservices/ Court is fixed at Rs.1 crore. In this case, tax effect is lessthan Rs.1 crore and therefore, the case has to be dismissed. 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: 4.Mr.T.R. Senthilkumar, learned Senior Standing Counselappearing on behalf of the appellant would submit that the taxeffect in this case is 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 High https://hcservices.ecourts.gov.in/hcservices/ Court is fixed at Rs.1 crore. In this case, tax effect is lessthan Rs.1 crore and therefore, the case has to be dismissed. 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:S.No.Appeals / SLPs in Income-Monetary Limittax matters(Rs.)1.Before Appeallate Tribunal50,00,0002.Before High Court1,00,00,0003.Before Supreme Court2,00,00,000 6.In view of the submissions made by the learned SeniorStanding Counsel appearing on behalf of the appellant and alsoin view of the Circular No.17/2019 dated 08.08.2019 issued bythe Director, Central Board of Direct Taxes, Delhi, the Tax CaseAppeal is dismissed on account of tax effect. However, thesubstantial questions of law framed are left open. In the eventthe tax effect is above the limit fixed in the said circular,liberty is granted to the Revenue to make a mention to thisCourt to restore the appeal to be heard and decided on merits.No costs. Sd/-Assistant Registrar Sub Assistant Registrar nv To 1.The Income Tax Appellate Tribunal,Madras 'B' Bench. 2.The Commissioner of Incoem Tax(Appeals)-19,Nungmbakkam, Chennai-34. 3.The Assistant Commissioner of Income Tax, Central Circle-2, Trichy. +1cc to Mr.T.R.Senthilkumar, Advocate, SR.No.100689.+1cc to Mr.S.Sridhar, Advocate, SR.No.100625.T.C.A. No. 982 of 2019RR(CO)CSR: 20/12/2020