“Whether On The Facts And In The Circumstancesof The Case, The Tribunal Was Right In Deleting Thepenalty Levied Under Section 15(1)(A) Of Theexpenditure Tax Act v. Https://Hcservices.ecourts.gov.in/Hcservices

IN THE HIGH COURT OF JUDICATURE AT MADRAS CORAM THE HONOURABLE MR.JUSTICE T.S.SIVAGNANAMandTHE HONOURABLE MRS.JUSTICE V.BHAVANI SUBBAROYAN Tax Case Appeal No.714 of 2008 Commissioner of Income Tax,Chennai. ... Appellant -vs- Adyar Gate Hotel Ltd.,132 TTK Road,Chennai-18.... Respondent Tax Case (Appeal) filed under Section 260A of the Income TaxAct, 1961 against the order of the Income Tax Appellate TribunalMadras 'A' Bench, dated 30.11.2007 in Exp.T.A.No.1/Mds/2007 forthe assessment year 1997-98. against the order, of thecommissioner of Income Tax (Appeals) III, dated 04.10.2006 madein EXP.ITA.No.1/2006-07 against the order of the AssistantCommissioner of Income Tax Company circle I (1), Chennai, dated15.02.2006 in G.I.No.AX1-01497-98(EXP.Tax) against the assesmentorder , dated 31.03.2000 of Joint Commissioner of Income TaxSpecial range III, Chennai in PAN/GIR No.20-A.For Appellant:Mrs.R.Hemalatha,Senior Standing CounselFor Respondent :Mr.Vijayaraghavanfor M/s.Subbaraya Aiyar Heard Mrs.R.Hemalatha, learned Senior Standing Counsel forthe appellant and Mr.Vijayaraghavan, learned counsel for therespondent. 2.This tax case appeal has been filed challenging the orderof the Income Tax Appellate Tribunal Madras 'A' Bench, dated30.11.2007 in Exp.T.A.No.1/Mds/2007 for the assessment year1997-98. https://hcservices.ecourts.gov.in/hcservices/ 3.The appeal has been admitted on the following substantialquestion of law:- “Whether on the facts and in the circumstancesof the case, the Tribunal was right in deleting thepenalty levied under section 15(1)(a) of theExpenditure Tax Act, when the appeal against thequantum is admitted and pending before this Court?” 4.It may not be necessary for this Court to take adecision on the substantial question of law framed in the lightof the low tax effect in the present appeal. This issue wasconsidered by us in the case of Commissioner of Income Tax vs.N.Meenakshisundaram in T.C.(A) Nos.868 & 869 of 2008 dated23.04.2018, by taking note of the Circular Instructions issuedby the Central Board of Direct Taxes (CBDT) and also taking noteof the submissions of the Revenue, the relevant portions ofwhich 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 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. ...........15. As per the Circular/Instruction issued byCBDT, the present Appeal should be not pressed bythe Revenue. If, at the time of filing of the ........................... 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 the Appeal, 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. Assistant Registrar(CS IV) //True Copy// Sub Assistant Registrar abrTo 1.The Income Tax Appellate Tribunal Madras 'A' Bench. 2.The Commissioner of Income Tax, Chennai. Chennai. 3.The Commissioner of Income Tax (Appeals) III, 121, Mahatma Gandhi Road, Chennai-600 034. 4. The Assistant Commissioner of Income Tax Company Circle I (1), Chennai-34 Company Circle I (1), Chennai-34 5. The Joint Commissioner of Income Tax, Special Range III, Chennai-34 Special Range III, Chennai-34 +1cc to Mr.T.Ravikumar,Senior Standing Counsel, S.R.No.49723 +1cc to Mr.Subbaraya Aiyar, Advocate, S.R.No.50079 Tax Case Appeal No.714 of 2008 GJ(CO)SMI/07.08.2018