The Principal Commissioner Of Income Tax-Ichennai v. Shri Parthiban

IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 12.11.2024 CORAM THE HON'BLE MR.JUSTICE R.SURESH KUMARANDTHE HON'BLE MR.JUSTICE C.SARAVANAN Tax Case Appeal No.179 of 2024 The Principal Commissioner of Income Tax-IChennai. ...Appellant Vs. Shri Parthiban ...Respondent ----- Tax Case Appeal filed under Section 260A of the Income Tax Act, 1961 against the order of the Income Tax Appellate Tribunal, Madras 'A' Bench, Chennai, dated 21.10.2022 in I.T.A.No.562 of 2020. ----- For Appellant : Mr.Avinash Krishnan Ravi Junior Standing Counsel ---- J U D G M E N T (Delivered by R.SURESH KUMAR,J.) This Tax Case Appeal has been filed by raising the following substantial questions of law: " 1. Whether on the facts and in the circumstances of the case, the Tribunal was justified in quashing the reopening of assessment proceedings on the ground that there was a change of opinion especially when the AO had not formed any opinion in the first instance?Tribunal was justified in quashing the reopening of assessment proceedings on the ground that there was a change of opinion especially when the AO had not formed any opinion in the first instance? 2. Whether on the facts and in the circumstances of the case, the Tribunal was justified in not considering the fact that treating the sale proceeds of the standing trees purchased along with the land on an out-right basis and had not at all grown or cultivated by the Assessee is to be treated as non-agricultural income as per the provisions of Section 2(1)(A)(b) of the Income Tax Act? 2. At the outset, Mr.Avinash Krishnan Ravi, learned counsel appearing for the appellant / Revenue submits that, though the monetary limit is less than the tax effect as per the recent CBDT's Circular No.9 of 2024 dated 17.09.2024, the exception clauses which are available in Para Nos.3.1 and 3.2 of the earlier Circular in Circular No.5 of 2024 dated 15.03.2024 would mutatis mutandis be made applicable to this Circular also. Under Para Nos. 3.1 and 3.2 of the said circular No.5, the circumstances of exceptions are provided, where even low tax effect appeals can be preferred either before the Tribunal or before the High Court or before the Supreme Court. 3. Insofar as this case is concerned, according to the learned counsel for the appellant, there has been an audit objection, based on which alone the assessment order since has been passed, that issue is one of the exception clauses covered under Para 3.1 of the Circular dated 15.03.2024. Therefore, even though it is a case of low tax effect on the quantification of tax, still the Revenue can present the appeal notwithstanding anything contained in Circular No.9 of 2024 dated 17.09.2024. Hence, the learned counsel for the Revenue seeks admission of this case by taking into consideration the said submission made by him. 4. In order to have a ready reference of Para 3.1 and 3.2 of the Circular No.5 of 2024 dated 15.03.2024, the same is extracted hereunder: T.C.A.No.179 of 2024 5. Many circumstances have been given for filing appeals before the forums like the Tribunal, High Court or Supreme Court, if the monetary limit even though is less than the tax limit as per Circular No.9 of 2024, still appeals can be filed in case of exceptions provided under Para 3.1 or 3.2 of Circular No.5 of 2024 as stated supra. 6. However, on a careful perusal of Paras 3.1 and 3.2 of the Circular, we do not find any circumstance to show that audit objection is one of such circumstance under which there is an exception where appeals can be filed even under low tax effect for pursuing the matter before the appellate forum including this Court. 7. No such circumstance as mentioned in Paras 3.1 and 3.2 of Circular No.5 of 2024 dated 15.03.2024 is available in this case. Similar to the said circular, Para 10 of Circular No.3 of 2018 dated 11.07.2018 reads as follows: 6. However, on a careful perusal of Paras 3.1 and 3.2 of the Circular, we do not find any circumstance to show that audit objection is one of such circumstance under which there is an exception where appeals can be filed even under low tax effect for pursuing the matter before the appellate forum including this Court. 7. No such circumstance as mentioned in Paras 3.1 and 3.2 of Circular No.5 of 2024 dated 15.03.2024 is available in this case. Similar to the said circular, Para 10 of Circular No.3 of 2018 dated 11.07.2018 reads as follows: "10. Adverse judgments relating to the following issues should be contested on merits notwithstanding that the tax effect entailed is less than the monetary limits specified in Para 3 above or there is no tax effect:contested on merits notwithstanding that the tax effect entailed is less than the monetary limits specified in Para 3 above or there is no tax effect: (a) Where the Constitutional validity of the provisions of an Act or Rule is under challenge, orRule is under challenge, or (b) Where Board's order, Notification, Instruction or Circular has been held to be illegal or ultra vires, orbeen held to be illegal or ultra vires, or (c) Where Revenue Audit objection in the case has been accepted by the Department, or (d) Where the addition relates to undisclosed foreign assets / bank accounts." 8. Though Circular No.3 dated 11.07.2018 has been superseded by Circular No.5 dated 15.03.2024, since similar exceptions have been provided in Circular No.5 dated 15.03.2024 in Paras 3.1 and 3.2, which we have extracted herein above, where also there is no such exception, such as audit objection, provided, and therefore the contention of the learned counsel for the appellant has to be rejected. 9. We do not find any merits in the contentions made by the learned Standing Counsel for the Revenue to entertain this appeal as admittedly it comes under the low tax effect as per the recent Circular No.9 dated 17.09.2024. In that view of the matter, we are not inclined to entertain this appeal. Hence it is dismissed as it comes under low tax effect and the questions of law that have been framed in this appeal by the Revenue / Appellant would be decided at a later point of time in an appropriate case. No costs. NCS : Yes/NoIndex : Yes/NoKST (R.S.K.,J.) (C.S.N.,J.)12.11.2024 To The Income Tax Appellate Tribunal'A' Bench, Chennai. https://www.mhc.tn.gov.in/judis T.C.A.No.179 of 2024 R.SURESH KUMAR, J.ANDC.SARAVANAN, J. KST T.C.A.No.179 of 2024 12.11.2024