The Commissioner Of Income Tax,Chennai v. M/S.ramsahalmal Sanhuwala & Sons,Charitable Trust

IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 30.07.2018 CORAM : THE HONOURABLE MR.JUSTICE T.S.SIVAGNANAMandTHE HONOURABLE MRS.JUSTICE V.BHAVANI SUBBAROYAN Tax Case (Appeal) Nos.1031 to 1036 of 2009 The Commissioner of Income Tax,Chennai. ... Appellant -vs- M/s.Ramsahalmal Sanhuwala & Sons,Charitable Trust No.24,Cathedral Garden Road,Nungambakkam, Chennai-600 034.... Respondent Tax Case Appeal filed under Section 260A of the Income TaxAct, 1961 against the common order of the Income Tax AppellateTribunal 'B' Bench, Chennai dated 02/01/2008 in I.T.A.Nos 1751to 1756/mds/2007 against the order of the Commissioner of Incometax appells-XI, Chennai-34 dated 28/02/2007 in ITA.NOS.508 to513/06-07 against the order of the Income Tax Officer(OSD)Exemptions-IV(I/C),Chennai-34dated19/12/2006inPAN/GIR.NO.4635-R respectively for the Assessment years 1999-2000 to 2004-2005(in TCA.Nos 1031 to 1036/2009) ******COMMON JUDGMENT[Delivered by T.S.Sivagnanam, J.] Heard Mr.Karthick Ranganathan, learned Senior StandingCounsel for the appellant and Mr.G.Baskar, learned counsel forthe respondent. https://hcservices.ecourts.gov.in/hcservices/ 2.These tax case appeals have been filed against the commonorder of the Income Tax Appellate Tribunal 'B' Bench, Chennaidated 01.02.2008 in ITA Nos.1751 to 1756/Mds/2007 for theassessment years 1999-2000 to 2004-05. 3.The above appeals have been admitted on the followingsubstantial question of law:- “Whether on the facts and circumstances of thecase, the Tribunal was right in law in holding thatthe income earned from running of Kalyana Mandapamis not a business income and that assessee waseligible for exemption under section 11 of IT Act,1961 for the assessment years 1999-2000 to 2004-2005?” 4.It may not be necessary for this Court to take a decisionon the substantial question of law framed in the light of lowtax effect in the present appeals. This issue was considered bythis Court in the case of Commissioner of Income Tax vs.N.Meenakshisundaram [T.C.(A) Nos.868 & 869 of 2008; Dated23.04.2018], by taking note of the circulars issued by theCentral Board of Direct Taxes (CBDT) and also taking note of thesubmissions of the Revenue, the relevant portions of which arequoted hereunder: "10. An argument was advanced by the learnedSenior Standing Counsel for the Revenue that thecircular can have effect only, while filing theappeal and not while hearing of the appeal and wouldhave no impact on the appeals, which are admittedand pending. However, in the Circular issued in theyear, 2015, it has been made clear that, it willapply to pending appeals as well. In respect ofthe earlier circulars, it would be relevant to takenote of the decision of the Hon'ble Supreme Court inMathew M. Thomas Vs Commissioner Of Income-Tax[(1999) (III) ELT 4 SC] wherein, the Hon'ble SupremeCourt, while considering the effect of CircularNo.445, dated 16.05.1986, pointed out that CircularNo. 455 dated 16.5.1986 issued by the C.B.D.T. isapplicable to all pending proceedings which have notattained finality under Section 269 I of the Act asdefined in the explanation to the said Section. ........................... 14. Therefore, the Circular has to beunderstood as part of the litigation policy of theGovernment of India to reduce the litigation and tobring down the number of Appeals, which are pendingbefore the Court and also ensure that the Appealsare not preferred by the Department without properexamination of the case on merits. ........... ........................... 14. Therefore, the Circular has to beunderstood as part of the litigation policy of theGovernment of India to reduce the litigation and tobring down the number of Appeals, which are pendingbefore the Court and also ensure that the Appealsare not preferred by the Department without properexamination of the case on merits. ........... 15. As per the Circular/Instruction issued byCBDT, the present Appeal should be not pressed bythe Revenue. If, at the time of filing of theAppeal, decision has to be taken whether to file anAppeal or not and the Authority by due applicationof mind and bearing the two caveats laid down by theHon'ble Supreme Court, in Surya Herbal Ltd., case(supra) should take a decision. In cases, where, theAppeals are pending before the Court, appropriateOfficer has to take a decision. In the instantcase, it appears that, no such specific instructionis issued to Mr.M.Swaminathan, the learned SeniorStanding Counsel to withdraw the Appeal, nor, can wecompel the learned counsel to withdraw the Appeal. 16. Having held that the Circular issued byCBDT is applicable to the case on hand and the taxeffect being less than the threshold limitprescribed in the Circular, we dismiss the presentAppeal by applying the law laid down by the Hon'bleSupreme Court, in Surya Herbal Ltd., case (supra),as the two caveats mentioned thereunder does notarise in the instant case.” 5.The learned Senior Standing Counsel for the Revenuesubmits that in the instant case also, the tax effect is lowerthan the limits prescribed in the Circulars. 6.Thus, by adopting the monetary limits in the Circulars,the tax case appeal filed by the Revenue is dismissed and thesubstantial question of law, framed for consideration, is leftopen. No costs. Sd/- Assistant Registrar(CS V) //True Copy// Sub Assistant Registrar abr To 1.The Commissioner of Income Tax, Chennai. Chennai. 2.The Income Tax Appellate Tribunal 'B' Bench, Chennai. 3.The Commissioner of Income Tax (Appeals)-XI, 121, Mahatma Gandhi Road, Chennai-34. 121, Mahatma Gandhi Road, Chennai-34. +1cc to Mr.G.Baskar, Advocate sr.no.51550 T.C.(A) Nos.1031 to 1036 of 2009 spd(co)nr 30/08/2018