M/S.QUESTNET ENTERPRISES IND vs. THE DEPUTY COMMISSIONER OF I

TCA.Nos.118 & 119 of 2021 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 16.2.2021 CORAM THE HONOURABLE MR.JUSTICE T.S.SIVAGNANAM and THE HONOURABLE MS.JUSTICE R.N.MANJULA Tax Case Appeal Nos.118 & 119 of 2021

M/s.Questnet Enterprises India P. Ltd., Chennai-31 ...Appellant Vs The Deputy Commissioner of Income Tax, Corporate Circle 5(2), Chennai-34 ...Respondent APPEALS under Section 260A of the Income Tax Act, 1961 against the orders respectively (i) dated 22.3.2017 passed by the Income Tax Appellate Tribunal, 'A' Bench, Chennai made in I.T.A.No. 3258/Chny/2016 for the assessment year 2012-13; and (ii) dated 06.7.2018 passed by the Income Tax Appellate Tribunal, 'A' Bench, Chennai made in MP.No.261/Chny/2017 in I.T.A.No.3258/Chny/2016 for the assessment year 2012-13. For Appellant: Mr.A.S.Sriraman For Respondent: Mr.Karthik Ranganathan, SC 1/4 https://www.mhc.tn.gov.in/judis/ TCA.Nos.118 & 119 of 2021 COMMON JUDGMENT Judgment was delivered by

T.S.SIVAGNANAM

These appeals have been filed by the assessee under Section 260A of the Income Tax Act, 1961 ('the Act' for brevity) challenging the orders respectively (i) dated 22.3.2017 passed by the Income Tax Appellate Tribunal, 'A' Bench, Chennai ('the Tribunal' for brevity) made in I.T.A.No. 3258/Chny/2016 for the assessment year 2012-13; and (ii) dated 06.7.2018 passed by the Income Tax Appellate Tribunal, 'A' Bench, Chennai ('the Tribunal' for brevity) made in MP.No. 261/Chny/ 2017 in I.T.A.No.3258/Chny/2016 for the assessment year 2012-13. 2. The assessee has filed these appeals by raising the following substantial questions of law : “1. Whether the provisions of Section 14A of the Act could be applied in the absence of requisite satisfaction on the part of the respondent/the Assessing Officer on the incurring of expenses for earning tax free income having regard to the audited financial statements for the assessment year concerned mechanically for quantifying notional expenses as per Rule 8D of the Income Tax Rules, 1962 which is the second stage/computation part? 2. Whether the Appellate Tribunal is correct in overlooking the law declared by the Apex Court though rendered subsequently for 2/4 https://www.mhc.tn.gov.in/judis/ TCA.Nos.118 & 119 of 2021 recording requisite satisfaction by the respondent/the Assessing Officer for incurring expenses for earning tax free income to go forward in quantifying notional expenses as per Rule 8D of the Income Tax Rules, 1962 for making addition u/s 14A of the Act in the proceedings initiated by the Appellant u/s 254(2) of the Act? and 3. Whether the Appellate Tribunal is correct in not considering the issues raised on the quantification of notional expenses as per Rule 8D of the Income Tax Rules, 1962 for making addition u/s 14A of the Act, thereby establishing the gross violation of the principles of legitimate expectation?” 3. We have heard Mr.A.S.Sriraman, learned counsel for the appellant/assessee and Mr.Karthik Ranganathan, learned Standing Counsel appearing for the respondent/Revenue. 4. The learned counsel for the assessee submits that the assessee already filed the declaration/undertaking in the respective cases under the Vivad Se Vishwas Scheme and orders were passed on 28.1.2021 in Form No.3. 5. In the light of the subsequent event, the assessee is given liberty to restore these appeals in the event the ultimate decision 3/4 https://www.mhc.tn.gov.in/judis/ TCA.Nos.118 & 119 of 2021 T.S.SIVAGNANAM,J AND R.N.MANJULA,J RS taken in the respective cases on the declaration filed by the assessee under Section 4 of the said Act is not in favour of the assessee. If such a prayer is made, the Registry shall entertain the prayer without insisting upon any petition to be filed for condonation of delay in restoration of the appeals and on such request made by the assessee by filing miscellaneous petitions for restoration, the Registry shall place such petitions before the appropriate Division Bench for orders. 6. The tax case appeals stand disposed of with the aforementioned liberty. Consequently, the substantial questions of law raised are left open. No costs. 16.2.2021 To 1.The Income Tax Appellate Tribunal, 'A' Bench, Chennai. 2.The Deputy Commissioner of Income Tax, Corporate Circle 5(2), Chennai-34 TCA.Nos.118 & 119 of 2021 4/4 https://www.mhc.tn.gov.in/judis/