The Commissioner Of Income Tax, Chennai v. M/S.cognizant Technology Solutions India Pvt. Ltd

IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 27.08.2019 CORAM : THE HONOURABLE MR.JUSTICE T.S.SIVAGNANAMANDTHE HONOURABLE MRS.JUSTICE V.BHAVANI SUBBAROYAN Tax Case Appeal No.308 of 2015 The Commissioner of Income Tax,Chennai....Appellant/AppellantVs M/s.Cognizant Technology Solutions India Pvt. Ltd.,No.5/535, Okkiam Old Mahabalipuram,Thoraipakkam, Chennai - 600 096....Respondent/Respondent APPEAL under Section 260A of the Income Tax Act, 1961 againstthe order dated 03.09.2014 made in ITA.No.1524/MDS/2014 on thefile of the Income Tax Appellate Tribunal, Chennai 'D' Bench forthe assessment year 2009-10 against the Order of theCommissioner of Income Tax (Appeals),Large Tax Payer Unit,Chennai dated 21.02.2014 and made in FBTA No.8/11-12/LTU(A) andagainst the Order of the Deputy Commissioner of Income TaxLarge Tax Payer Unit, Chennai dated 12.06.2011 for theAssessment Year 2009-10. For Appellant: Mr.T.Ravikumar, SSC and Ms.R.Hemalatha, SSCFor Respondent : Mr.N.V.Balaji JUDGMENT (Judgment was delivered by T.S.Sivagnanam,J.) We have heard Mr.T.Ravikumar, learned Senior StandingCounsel, and Ms.R.Hemalatha, learned Senior Standing Counselappearing for the appellant/revenue and Mr.N.V.Balaji, learnedcounsel appearing for the respondent/assessee. 2.This appeal, filed by the Revenue under Section 260A ofthe Income Tax Act, 1961 is directed against the order dated03.09.2014 made in ITA.No.1524/MDS/2014 on the file of theIncome Tax Appellate Tribunal, Chennai 'D' Bench for theassessment year 2009-10. https://hcservices.ecourts.gov.in/hcservices/ 3.The appeal was admitted on 08.07.2015 on the followingsubstantial questions of law : “i) Whether on the facts and in thecircumstances of the case, the Appellate Tribunalwas right in holding that the expenditure towardsthe recreation club and sports club was not in thenature of Fringe benefits and deleting the additionsmade under Section 115WB(M)(N) was proper? ii) Is not the finding of the Tribunal badespecially when the statute did not differentiatethe expenditure incurred by the clubs maintained bythe employer or third party while dealing withFringe benefit tax? iii) Whether the Tribunal was right in holdingthat no interest is chargeable under Section 115WJ(3) on account of short payment of Advance tax inrespect of Employee Stock Option Plan? iv) Is it proper for the Tribunal in relyingupon the decision of the assessment year 2008-09without even considering the fact that ESOP wasnotified in December, 2007 and the assessee hadcomplete knowledge of its liability towards Advancetax payable on ESOP even though the said judgmentwould not apply to the present case?" 4.The learned Senior Standing Counsel for the appellantsubmits that the above appeal is not pursued by the Revenue onaccount of the low tax effect in terms of Circular No.17/2019dated 08.8.2019 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 caseappeal is 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 appeal to be heard and decided onmerits. No costs.cse Sd/- Assistant Registrar //True Copy// Sub Assistant Registrar To 1.The Income Tax Appellate Tribunal, Chennai 'D' Bench. 2.The Commissioner of Income Tax (Appeals),Large Tax Payer Unit, II Floor, 1795 Jawaharla Nehru Inner Ring Road,Anna Nagar, Western Extension, Chennai. 3. The Deputy Commissioner of Income Tax, Large Tax Payer Unit, Chennai 600 101. 4. The Commissioner of Income Tax, Chennai. Sd/- Assistant Registrar //True Copy// Sub Assistant Registrar To 1.The Income Tax Appellate Tribunal, Chennai 'D' Bench. 2.The Commissioner of Income Tax (Appeals),Large Tax Payer Unit, II Floor, 1795 Jawaharla Nehru Inner Ring Road,Anna Nagar, Western Extension, Chennai. 3. The Deputy Commissioner of Income Tax, Large Tax Payer Unit, Chennai 600 101. 4. The Commissioner of Income Tax, Chennai. +1cc to M/s.N.V.Balaji & Rathinavel Advocate, SR.No.74918 +1cc to Mr.T.Ravi Kumar, Advocate, SR.No.73325 TCA.No.308 of 2015 Kak(07/11/2019)