COMMISSIONER OF INCOME TAX CHENNAI III V. M/S SHRIRAM INVESTMENTS LTD.

20205-2019

AI Insights

The case involves the Commissioner of Income Tax Chennai III as the petitioner against M/s Shriram Investments Ltd. The core issue was the maintainability of Special Leave Petitions (SLPs) concerning the 'low tax effect' under the Interest Tax Act. The respondent's counsel argued that based on several circulars issued over the years, the petitions were not maintainable due to the low tax effect. The petitioner's counsel contended that the specific circulars applicable to the Interest Tax Act did not impose such a threshold. The Supreme Court, after considering the arguments and the relevant circulars, concluded that the petitions did not meet the required monetary threshold for maintainability and thus dismissed them.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 522806 (SC)
• Appeal Type: Supreme court cases
• Pronouncement Date: 19-03-2024
• Laws Referred To: Income Tax Act, Interest Tax Act, Wealth Tax Act, Gift Tax Act, Estate Duty Act
• Result in Favour of: Others
• Court: SUPREME COURT
• Department Lawyers: R SIVARAMAN; RAVI RAGHUNATH
• Assessee Lawyers: VIKRAMJIT BANNERJEE; RUPESH KUMA R; RAJ BAHADUR YADAV
• Keywords: Direct tax matters; Litigation policy; Low tax effect; Maintainability; Threshold Limit
• Section: 1979; 1987; 1992; 2000; 2018; 2019; 2016

Judgement Text

"ITEM NO.19 COURT NO.12 SECTION XII S U P R E M E C O U R T O F I N D I A RECORD OF PROCEEDINGS Petition(s) for Special Leave to Appeal (C) No(s). 15735/2019 (Arising out of impugned final judgment and order dated 19-11-2018 in TCA No. 1098/2008 passed by the High Court Of Judicature at Madras) COMMISSIONER OF INCOME TAX CHENNAI III Petitioner(s) VERSUS M/S SHRIRAM INVESTMENTS LTD. Respondent(s) WITH SLP(C) No. 25173/2019 (XII) (FOR EXEMPTION FROM FILING C/C OF THE IMPUGNED JUDGMENT ON IA 116533/2019 IA No. 116533/2019 - EXEMPTION FROM FILING C/C OF THE IMPUGNED JUDGMENT) SLP(C) No. 15736/2019 (XII) (FOR EXEMPTION FROM FILING C/C OF THE IMPUGNED JUDGMENT ON IA 90164/2019 IA No. 90164/2019 - EXEMPTION FROM FILING C/C OF THE IMPUGNED JUDGMENT) SLP(C) No. 17648/2019 (XII) (FOR EXEMPTION FROM FILING C/C OF THE IMPUGNED JUDGMENT ON IA 100923/2019 IA No. 100923/2019 - EXEMPTION FROM FILING C/C OF THE IMPUGNED JUDGMENT) SLP(C) No. 18907/2019 (XII) (FOR EXEMPTION FROM FILING C/C OF THE IMPUGNED JUDGMENT ON IA 108887/2019 IA No. 108887/2019 - EXEMPTION FROM FILING C/C OF THE IMPUGNED JUDGMENT) SLP(C) No. 15738/2019 (XII) (FOR EXEMPTION FROM FILING C/C OF THE IMPUGNED JUDGMENT ON IA 93739/2019 IA No. 93739/2019 - EXEMPTION FROM FILING C/C OF THE IMPUGNED JUDGMENT) Date : 19-03-2024 These petitions were called on for hearing today. CORAM : HON'BLE MRS. JUSTICE B.V. NAGARATHNA HON'BLE MR. JUSTICE AUGUSTINE GEORGE MASIH For Petitioner(s) Mr. Vikramjit Bannerjee, A.S.G. Mr. Rupesh Kumar, Sr. Adv. Mr. Raj Bahadur Yadav, AOR contd.. Digitally signed by Neetu Sachdeva Date: 2024.04.01 17:22:49 IST Reason: Signature Not Verified - 2 - Mr. Nalin Kohli, Adv. Mr. Saransh Kumar, Adv. Mr. Prashant Rawat, Adv. Mr. Navanjay Mahapatra, Adv. Ms. Pratima Singh, Adv. Mrs. Anil Katiyar, AOR For Respondent(s) Mr. R. Sivaraman, Adv. Mr. Ravi Raghunath, AOR Mr. Utkarsh Kumar, Adv. UPON hearing the counsel the Court made the following O R D E R We have heard learned senior counsel for the petitioner(s) and learned counsel for the respondent(s). At the outset, respondent’s counsel raised an objection with regard to the maintainability of these petitions on the issue of ‘low tax effect’. In this regard, learned counsel for the respondent drew our attention to Circulars issued in the years 1979, 1987, 1992 and 2000 as well as the subsequent Circulars issued in the years 2018 and 2019 to contend that having regard to Circular instructions whereby it was stated that the threshold limit for filing of matters before this Court applied not only to income tax matters but also to other direct tax matters such as wealth tax, gift tax, estate duty etc. mentioned in the said Circulars, would include by implication, the Interest Tax Act also. He, therefore, submitted that these special leave petitions are not maintainable before this Court owing to ‘low tax effect’. Per contra, learned senior counsel appearing for the appellant(s) referred to the very same Circulars to contend that the Department, being aware of the fact that the Wealth Tax Act was repealed had expressly issued another Circular in 2016 omitting contd.. - 3 - Wealth Tax Act from the application of the aforesaid Circular; that such a step has not been taken by the Department insofar as Interest Tax Act is concerned. He, therefore, submitted that the threshold limit for filing the appeal under the Circulars, would not be applicable to the instant case which deals with Interest Tax Act. We have considered the rival submissions advanced at the Bar in light of the aforesaid Circulars, which have been issued by the Department on account of its litigation policy, so as to limit the litigation before Courts to only those cases where the threshold limit is over and above stipulated limit insofar as each of the hierarchies of Authorities and Courts are concerned. For instance, Clause 5 of the Circular instruction dated 27.03.2000 reads as under - “5. These instruction will apply to litigation under other Direct taxes also e.g. wealth-tax, gift-tax, estate duty etc.” The said clause though primarily applicable to cases under the Income Tax Act expressly mentions by way of example, wealth tax, gift tax and estate duty and insofar as the taxes which are not mentioned, use of the word “etc.” is significant. This implies that Circular instruction has mentioned only a few of the direct taxes which would be coming within the scope and ambit of the said Circular but insofar as those Acts, which are not specifically mentioned, the expression “etc.” is significant. In this regard the following extract from P. Ramanatha Aiyar’s Advanced Law Lexicon (6th Edition), Volume-2, D-1 is useful: contd.. - 4 - “Etc or & C is an abbreviation of Et Cetera, and therefore may mean and others, and so forth; and the rest; other things; other things of the same character, or only those things ejusdem generis. Custom, the intention of the parties, the context, and the manner and place in which the abbreviation is used may govern its meaning; but where it can have one certain meaning, it will be given that meaning; although as sometimes used it is considered as meaningless and without effect, and is often disregarded as surplusage (Cyc)” We find that the said Circulars would also cover the Interest Tax Act as it is direct tax and can be read within the scope and ambit of the word “Et Cetera\". Admittedly, the Special Leave Petitions assail orders where the threshold limit is less than Rs.2,00,00,000/- (Rupees Two Crores). In the circumstances, the Special Leave Petitions are dismissed owing to ‘low tax effect’. Pending application(s) shall stand disposed of. (NEETU SACHDEVA) (MALEKAR NAGARAJ) ASTT. REGISTRAR-cum-PS COURT MASTER (NSH) "