The Commissioner Of Income-Tax,Coimbatore v. M/S.s.v.trust,10, Smj Lane, Pollachi

IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 07.08.2018 CORAM THE HONOURABLE MR.JUSTICE T.S.SIVAGNANAMandTHE HONOURABLE MRS.JUSTICE V.BHAVANI SUBBAROYAN Tax Case (Appeal) Nos.1289 to 1294 of 2008and M.P.Nos.1, 1, 1, 1 and 1 of 2008 The Commissioner of Income-tax,Coimbatore.... Appellant in all TC(A) -vs- M/s.S.V.Trust,10, SMJ Lane, Pollachi....Respondent in all TC(A) Tax Case (Appeal) filed under Section 260-A of the IncomeTax Act, 1961 against the order of the Income-tax AppellateTribunal “A” Bench, Chennai dated 30.06.2004 in ITA Nos.2039 to2044/Mds/2003 for the assessment years 1994-95, 1995-96, 1996-97, 1997-98, 1998-99, and 1999-2000 respectively as against theorder dated 31.10.2003 made in I.T.Appeal(s) Nos.19, 22, 23, 24,25 & 26-C/01-02 respectively passed by the Commissioner ofIncome Tax (Appeals)II, Coimbatore against the order dated31.07.2001 passed by the Income Tax Officer, Ward I(1)i/c,Pollachi for the assessment year 1994-95, 1995-96, 1996-97,1997-98, 1998-99 and 1999-2000 respectively in PAN/GI.No.T-657/1(1). For Appellant:Mr.Karthick Ranganathan,(in all Appeals)Senior Standing CounselFor Respondent :Mr.R.Janaki Raman(in all Appeals)COMMON JUDGMENT[Delivered by T.S.Sivagnanam, J.] Heard Mr.Karthick Ranganathan, learned Standing Counsel forthe appellant and Mr.R.Janaki Raman, learned counsel for therespondent. https://hcservices.ecourts.gov.in/hcservices/ 2.These appeals, by the Revenue, are directed against thecommon order of the Income Tax Appellate Tribunal “A” Bench,Chennai dated 30.06.2004 in ITA Nos.2039 to 2044/Mds/2003 forthe assessment years 1994-95 to 1999-2000. 3.The above appeals have been admitted on 01.09.2008 on thefollowing substantial questions of law:- “(i) Whether on the facts and in thecircumstances of the case, the Income-taxAppellate Tribunal was right in law in holdingthat, where the beneficiaries and their shares aredeterminate and therefore the trustees could notbe assessed for tax and that the provisions ofSection 164 of the Act are not attracted? (ii) Whether on the facts and in thecircumstances of the case the Income-tax AppellateTribunal was justified in following the decisionof Advance Ruling reported in 224 ITR 473 (AAR)does not have binding effect on the assessee’scase?” 4.It may not be necessary for this Court to take a decisionon the substantial questions of law framed in the light of thelow tax effect in the present appeals. This issue wasconsidered by this Court in the case of Commissioner of IncomeTax vs. N.Meenakshisundaram [T.C.(A) Nos.868 & 869 of 2008;Dated 23.04.2018], by taking note of the Circular issued by theCentral Board of Direct Taxes (CBDT) vide Circular No.21/2015;dated 10.12.2015, and also taking note of the submissions of theRevenue, the relevant portions of which are quoted 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 Circular No. 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. ........................... No. 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. ........... 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 Circular. 6.Thus, by adopting the monetary limits in the Circular, https://hcservices.ecourts.gov.in/hcservices/ the tax case appeals filed by the Revenue are dismissed and thesubstantial questions of law, framed for consideration, are leftopen. No costs. Sd/- Assistant Registrar(CS VI)//True Copy// Sub Assistant RegistrarabrTo1.The Commissioner of Income-tax (Appeals)-II, Coimbatore.2.The Income-tax Appellate Tribunal “A” Bench, Chennai.3.The Income-tax Officer, Ward I(1)/c, Pollachi.4.The Director Central Board of Direct Taxes, New Delhi5.The Assistant Registrar, Income Tax Appellate Tribunal, Besant Nagar, Chennai-906.The Ciommissioner of Income Tax, Coimbatore.T.C. (A) Nos.1289 to 1294 of 2008SAI(Co)CS/05/09/18