Madras High Court
The Principal Commissioner Of Income ... vs Shri Parthiban on 12 November, 2024
Bench: R.Suresh Kumar, C.Saravanan
T.C.A.No.179 of 2024
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED: 12.11.2024
CORAM
THE HON'BLE MR.JUSTICE R.SURESH KUMAR
AND
THE HON'BLE MR.JUSTICE C.SARAVANAN
Tax Case Appeal No.179 of 2024
The Principal Commissioner of Income Tax-I
Chennai. ... Appellant
Vs.
Shri Parthiban ... Respondent
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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.
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For Appellant : Mr.Avinash Krishnan Ravi
Junior Standing Counsel
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JUDGMENT
(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?
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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
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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:
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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:
"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:
(a) Where the Constitutional validity of the provisions of an Act or
Rule is under challenge, or
(b) Where Board's order, Notification, Instruction or Circular has
been held to be illegal or ultra vires, or
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(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.
(R.S.K.,J.) (C.S.N.,J.)
12.11.2024
NCS : Yes/No
Index : Yes/No
KST
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R.SURESH KUMAR, J.
AND
C.SARAVANAN, J.
KST
To
The Income Tax Appellate Tribunal
'A' Bench, Chennai.
12.11.2024
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