T.C.A.Nos.94,95,101 & 104 of 2020 IN HIGH COURT OF JUDICATURE AT MADRAS DATED : 27.02.2020 CORAM : HONOURABLE MR.JUSTICE N.KIRUBAKARAN and HONOURABLE MR.JUSTICE P.VELMURUGAN T.C.A.Nos.94, 95, 101 & 104 of 2020 and C.M.P.Nos.3738, 3714, 3703, 3697 of 2020 Principal Commissioner of Income Tax 6, No.121, Mahatma Gandhi Road, Chennai 600 034. Appellant in all Appeals Vs Sivagami Holdings Pvt. Ltd., No.202, Anna Salai, Chennai 600 002. PAN: AAECS 3279 Respondent in all Appeals PRAYER in T.C.A.No.94 of 2020 : Appeal under Section 260A of Income Tax Act, 1961 against order of Income Tax Appellate Tribunal, Madras C Bench, dated 14.03.2018 in ITA.No.1422/Chny/2016. PRAYER in T.C.A.No.95 of 2020 : Appeal under Section 260A of http://www.judis.nic.in 1/7 T.C.A.Nos.94,95,101 & 104 of 2020 Income Tax Act, 1961 against order of Income Tax Appellate Tribunal, Madras C Bench, dated 14.03.2018, CO No.92/Chny/2016 in ITA.No.1420/Chny/2016. PRAYER in T.C.A.No.101 of 2020 : Appeal under Section 260A of Income Tax Act, 1961 against order of Income Tax Appellate Tribunal, Madras C Bench, dated 14.03.2018 in ITA.No.1420/Chny/2016. PRAYER in T.C.A.No.104 of 2020 : Appeal under Section 260A of Income Tax Act, 1961 against order of Income Tax Appellate Tribunal, Madras C Bench, dated 14.03.2018, CO No.93/Chny/2016 in ITA.No.1422/Chny/2016. For Appellant :Mr.J.Narayanaswamy Senior standing counsel For Respondent :Mr.A.S.Sriraman COMMON JUDGMENT (Judgment of Court was delivered by N.KIRUBAKARAN, J) Delink from T.C.A.Nos.89, 92 & 100 of 2020. T.C.A.No.94 of 2020 has been preferred by Revenue against order of Income Tax Appellate Tribunal, Madras C Bench, dated 14.03.2018 in ITA.No.1422/Chny/2016. http://www.judis.nic.in 2/7 T.C.A.Nos.94,95,101 & 104 of 2020 2.T.C.A.No.95 of 2020 has been preferred by Revenue against order of Income Tax Appellate Tribunal, Madras C Bench, dated 14.03.2018, CO No.92/Chny/2016 in ITA.No.1420/Chny/2016. 3.T.C.A.No.101 of 2020 has been preferred by Revenue against order of Income Tax Appellate Tribunal, Madras C Bench, dated 14.03.2018 in ITA.No.1420/Chny/2016. 4.T.C.A.No.104 of 2020 has been preferred by Revenue against order of Income Tax Appellate Tribunal, Madras C Bench, dated 14.03.2018, CO No.93/Chny/2016 in ITA.No.1422/Chny/2016. 5.These appeals are admitted on following substantial questions of law : (i)Whether on facts and in circumstances of case, Tribunal was right in holding that income of assessee from sources outside Malaysia cannot be taxed in India, though assessee is resident in India and control and management of Malaysian branch is vested http://www.judis.nic.in 3/7 T.C.A.Nos.94,95,101 & 104 of 2020 in India, in view of DTAA between India and Malaysia? (ii)Whether on facts and in circumstances of case, Tribunal was right in holding that income of assessee from sources outside Malaysia cannot be taxed in India, in view of DTAA between India and Malaysia, even though same forms part of assessee's global income? (iii) Whether Appellate Tribunal was right in holding that Malaysian branch is permanent Establishment of assessee in Malaysia? (iv)Whether Appellate Tribunal was right in holding that Malaysia branch is not taxable in India even though management is situated in India, in view of DTAA between India and Malaysia? (v)Whether on facts and circumstances of case, Tribunal was right in holding that no tax is chargeable in India under Indian Income Tax Act, 1961 on rental and interest receipts of Malaysian Branch of assessee company in view of Double Taxation Avoidance Agreeement even though such receipts have not been subjected to tax in Malaysia since they arose outside Malaysia? (vi)Whether Appellate Tribunal was right in allowing Cross Objections filed by assessee? 6.Mr.J.Narayanaswamy, learned Senior Standing Counsel http://www.judis.nic.in 4/7 T.C.A.Nos.94,95,101 & 104 of 2020 appearing on behalf of appellant would submit that tax effect in this case is less than Rs.1 crore and is covered by Circular No.17/2019 dated 08.08.2019 issued by Director, Central Board of Direct Taxes, Department of Revenue, Ministry of Finance, Government of India, Delhi. As per said circular, monetary limit to file appeal before High Court is fixed at Rs.1 crore. In these cases, tax effect is less than Rs.1 crore and therefore, cases have to be dismissed. 7.This Court perused circular dated 08.08.2019 and Paragraph No.2 of said Circular, which prescribes monetary limit for filing appeal is usefully extracted as follows: 2.As step towards further management of litigation, it has been decided by Board that monetary limits for filing of appeals in income-tax cases be enhanced further through amendment in Para 3 of Circular mentioned above and accordingly, table for monetary limits specified in Para 3 of Circular shall read as follows: S.No. Appeals / SLPs in Income- Monetary Limit tax matters (Rs.) 1. Before Appeallate Tribunal 50,00,000 2. Before High Court 1,00,00,000 http://www.judis.nic.in 5/7 T.C.A.Nos.94,95,101 & 104 of 2020 S.No. Appeals / SLPs in Income- Monetary Limit tax matters (Rs.) 3. Before Supreme Court 2,00,00,000 8.In view of submissions made by learned counsel appearing on behalf of appellant and also in view of Circular No.17/2019 dated 08.08.2019 issued by Director, Central Board of Direct Taxes, Delhi, Tax Case Appeals are dismissed on account of tax effect. However, substantial questions of law framed is left open. In event tax effect is above limit fixed in said circular, liberty is granted to Revenue to make mention to this Court to restore appeals to be heard and decided on merits. No costs. Consequently, connected Miscellaneous Petitions are also closed. (NKKJ) (PVJ) 27.02.2020 sai To 1.The Principal Commissioner of Income Tax 6, No.121, Mahatma Gandhi Road, Chennai 600 034. 2.Income Tax Appellate Tribunal 'C' Bench, Chennai. http://www.judis.nic.in 6/7 T.C.A.Nos.94,95,101 & 104 of 2020 N.KIRUBAKARAN, J. and P.VELMURUGAN, J. sai T.C.A.Nos.94, 95, 101 & 104 of 2020 Dated : 27.02.2020 http://www.judis.nic.in 7/7 Principal Commissioner of Income-tax-6, Chennai v. Sivagami Holdings Pvt. Ltd