Madras High Court
The Commissioner Of Income Tax vs M/S.Financial Software And ... on 5 August, 2021
TCA.No.420 of 2021
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED : 05.8.2021
CORAM
THE HONOURABLE MR.JUSTICE T.S.SIVAGNANAM
and
THE HONOURABLE MR.JUSTICE SATHI KUMAR SUKUMARA KURUP
Tax Case Appeal No.420 of 2021
The Commissioner of Income Tax,
Chennai ...Appellant
Vs
M/s.Financial Software and Systems
(P) Ltd., Chennai-103. ...Respondent
APPEAL under Section 260A of the Income Tax Act, 1961 against
the order dated 22.6.2016 passed by the Income Tax Appellate
Tribunal, Madras 'A' Bench, Chennai made in I.T.A.No.824/Mds/2016
for the assessment year 2010-11.
For Appellant: Mr.Karthik Ranganathan, SSC
For Respondent : Mr.N.V.Balaji
Judgment was delivered by T.S.SIVAGNANAM,J
This appeal has been filed by the Revenue under Section 260A of
the Income Tax Act, 1961 ('the Act' for brevity) challenging the order
https://www.mhc.tn.gov.in/judis/
TCA.No.420 of 2021
dated 22.6.2016 passed by the Income Tax Appellate Tribunal, Madras
'A' Bench, Chennai (the Tribunal for brevity) made in I.T.A.No.824/
Mds/2016 for the assessment year 2010-11.
2. The Revenue has filed this appeal by raising the following
substantial questions of law:
“1. Whether, on the facts and in the
circumstances of the case, the Tribunal was
right in holding that the proceeding under
Section 201(1) holding the assessee in default
was not applicable to foreign remittance made
towards purchase of software without effecting
withholding tax under Section 195 is proper ?
2. Whether the foreign remittance made
to companies by the assessee without
deducting withholding taxes under Section 195
of the Income Tax Act, 1961 in respect of
purchase of software can be treated as royalty
on which TDS is to be made ? And
3. Whether the disallowance made under
Section 40(a)(i) and the order passed under
Section 201(1)/201(1A) are independent and
different proceeding?”
3. We have heard Mr.Karthik Ranganathan, learned Senior
Standing Counsel appearing for the appellant/Revenue and Mr.N.V.
Balaji, learned counsel accepting notice for the respondent/assessee.
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TCA.No.420 of 2021
4. The learned Senior Standing Counsel for the appellant
submits that the above appeal is not pursued by the Revenue on
account of the low tax effect in terms of Circular No.17/2019 dated
08.8.2019 issued by the Central Board of Direct Taxes. By the said
Circular, the monetary limit for filing or pursuing an appeal before the
High Court has been increased to Rs.1 Crore. It is further submitted
that the tax effect in this case is less than the threshold limit.
5. In the light of the said submissions, the above tax case appeal
is dismissed on account of the low tax effect. The substantial questions
of law raised are left open. In the event the tax effect is above the
threshold limit fixed in the said circular, liberty is granted to the
Revenue to file a petition before this Court to restore the appeal to be
heard and decided on merits. No costs.
05.8.2021
To
The Income Tax Appellate Tribunal, 'A' Bench, Chennai.
RS
https://www.mhc.tn.gov.in/judis/
TCA.No.420 of 2021
T.S.SIVAGNANAM,J
AND
SATHI KUMAR SUKUMARA KURUP,J
RS
TCA.No.420 of 2021
05.8.2021
https://www.mhc.tn.gov.in/judis/
