The Commissioner Of Income Tax, Chennai v. M/S.rane Holdings Ltd., “Maithri”

IN THE HIGH COURT OF JUDICATURE AT MADRASDATED : 26.02.2020CORAM : THE HONOURABLE MR.JUSTICE N.KIRUBAKARAN andTHE HONOURABLE MR.JUSTICE P.VELMURUGANT.C.A.Nos.635 & 636 of 2018andC.M.P.No.12802 of 2018 The Commissioner of Income Tax,Chennai.... Appellant in both the AppealsVs M/s.Rane Holdings Ltd.,“Maithri”No.132, Cathedral Road,Chennai 600 086. PAN: ... Respondent in both theAppeals PRAYER : Appeals under Section 260A of Income Tax Act, 1961against the order of the Income Tax Appellate Tribunal, Madras“D” Bench, dated 27.10.2017 in ITA.No.1089 & 1090/Mds/2017.Against the order of the Commissioner of Income appeals(3)CHennai dated 31/07/2017, against the order dated 31.12.2010 and27.02.2015 for the Assessment year 2008-09 and Assessment year2012-13 passed by DCIT Company Circle(3), Chennai and CorporateCircle 5(1), Chennai-34 and the order of Deputy Commissioner ofIncome Tax, Corporate Circle-5(1) Chennai-34 in PAN-AABCR5136). The Appeals have been preferred by the Revenue against theorder of the Income Tax Appellate Tribunal, Madras “D” Bench,dated 27.10.2017 in ITA.No.1089 & 1090/Mds/2017 for theAssessment year 2008-09 & 2012-13 respectively. 1/3 https://hcservices.ecourts.gov.in/hcservices/ 2.The Revenue has filed Appeal before the ITAT against thecommon order passed by the CIT-3, on 31.01.2017 for theassessment years 2008-09 and 2012-13. The ITAT has rejected theclaim of the revenue and dismissed the same, against which onlythe present Appeals have been filed. 3.These appeals are admitted on the following substantialquestions of law : “(i)Whether the Tribunal was right in deleting thedisallowance made under Section 14A read with Rule 8D withregard to the exempted income especially when there is noprovision under the Income Tax Act to exclude investmentsmade in the subsidiary company while computing thedisallowances?(ii)Whether the Tribunal was right in not considering thefact that as per the provisions of Section 14A, theexpenditure incurred in connection with exempted income isnot allowable as a deduction and the same shall bedisallowed even when the assessee does not claim such anexpenditure?” 4.Mr.T.Ravikumar, learned Senior Standing Counsel appearingon behalf of the appellant would submit that the tax effect inthis case is less than Rs.1 crore and is covered by CircularNo.17/2019 dated 08.08.2019 issued by the Director, CentralBoard of Direct Taxes, Department of Revenue, Ministry ofFinance, Government of India, Delhi. As per the said circular,the monetary limit to file an appeal before the High Court isfixed at Rs.1 crore. In these cases, tax effect is less thanRs.1 crore and therefore, the cases have 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: 2/3 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, the Tax Case Appeals aredismissed on account of tax effect. However, the substantialquestions 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. Nocosts. Consequently, connected Miscellaneous Petition is alsoclosed. 2/3 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, the Tax Case Appeals aredismissed on account of tax effect. However, the substantialquestions 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. Nocosts. Consequently, connected Miscellaneous Petition is alsoclosed. Sd/- Asst.Registrar (CS V ) /true copy/Sub Asst. RegistrarsaiTo1.The The Commissioner of Income Tax,Chennai.2.Income Tax Appellate Tribunal 'D' Bench, Chennai.3.The Deputy Commissioner of Income Tax,Corporate Circle-5(1)Chennai-34 4. The Commissioner of Income tax(Appeals)-3 Chennai-34 +1 cc to M/s.Subbaraya Aiar Advocate sr16902+1 cc to Mr.T.Ravikumar Advocate sr16574T.C.A.Nos.635 & 636 of 2018 rgn(co)aa13/05/2020 3/3