MANI AGRO FOODS PVT LTD vs. THE ASST COMMISSIONER OF

Q: Which sections of the Income-tax Act were involved?

Section 260A, Section 158BE(1)(b)

TCA/141/2018HC Madras20 April 2021Bench: Hon`ble Mr Justice M.DURAISWAMY7 pages

AI SummaryWithdrawn

What did the High Court hold?

The High Court did not decide the substantial questions of law framed by the assessee. The Court was informed by the assessee's counsel that the assessee had opted for the Direct Tax Vivad Se Vishwas Act, 2020, and had been issued Form-3 on 29.03.2021. Consequently, the assessee sought permission to withdraw the appeals. In light of this submission, the High Court dismissed the appeals as withdrawn. The operative direction was the dismissal of the appeals as withdrawn, with no costs. The connected miscellaneous petitions were also closed. No specific finding was given by the High Court on any of the substantial questions of law raised by the assessee or on the additions made by the revenue, as the matter was disposed of on procedural grounds due to the assessee's decision to avail the Vivad Se Vishwas scheme.

What were the facts?

The assessee, M/s. Nani Agro Foods Pvt. Ltd., filed three appeals (TCA Nos. 141 to 143 of 2018) before the High Court of Judicature at Madras against an order dated 24.05.2017 passed by the Income Tax Appellate Tribunal (ITAT), Chennai "A" Bench. The appeals challenged the ITAT's decision concerning block assessments for the period 1997-98 to 2003-04 (up to 08.08.2002). The core of the dispute revolved around the legality and timeliness of the block assessment orders passed by the Assessing Officer and upheld by the ITAT. The assessee contended that the assessment orders were time-barred. The revenue, represented by the Assistant Commissioner of Income Tax, Coimbatore, defended the ITAT's order. The High Court was to decide substantial questions of law framed by the assessee.

What were the issues?

The High Court was to decide the following substantial questions of law: 1. Whether the ITAT was correct in holding that the block assessment order dated 21.10.2004 was within the time limit prescribed by Explanation 2 to Section 158BE(1)(b) of the Income Tax Act, 1961, considering the last Panchanama was drawn on 08.08.2002 and not 01.10.2002? 2. Whether the ITAT was correct in following the judgment in VLS Finance Ltd. v. CIT [384 ITR 1 (SC)], which the assessee argued was not applicable to the facts? 3. Whether the ITAT was correct in holding that the block assessment was not barred by limitation, given that there was no subsequent search and only Panchanamas were prepared subsequently regarding the lifting of prohibitory orders? 4. Whether the ITAT was correct in treating the Panchanama drawn on 01.10.2002 as the last Panchanama for all three assessees, thereby holding the assessment order passed on 21.10.2004 to be within two years from the end of the month in which the last Panchanama was drawn? 5. Whether the ITAT was correct in holding that the last Panchanama was drawn on 01.10.2002 in relation to the appellant, thereby upholding the block assessment without deciding on the legality of the conclusion of search with reference to that Panchanama? For TCA Nos. 142 and 143 of 2018: 1. Whether the ITAT was correct in sustaining the addition of credits in the name of Periyar Marketing Committee amounting to Rs.87,70,995/-? 2. Whether the ITAT was correct in sustaining the addition of Rs.22.55 lakhs on account of profit from Vigneswara Traders and Rs.3.77 Crores on account of bought note purchases? Assessee's Contentions: The assessee argued that the block assessment orders were time-barred, disputing the date of the last Panchanama and the applicability of the VLS Finance Ltd. case. They also questioned the legality of the search conclusion based on the Panchanama dated 01.10.2002. Revenue's Contentions: The revenue supported the ITAT's order, arguing that the block assessments were valid and within the prescribed time limits.

Which sections of the Income-tax Act were involved?

Section 260A,Section 158BE(1)(b)

AI-generated summary — verify with the full judgment below

Tax Case Appeal Nos.141 to 143 of 2018 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 20.04.2021 CORAM THE HON'BLE MR.JUSTICE M. DURAISWAMY AND THE HON'BLE MRS.JUSTICE R. HEMALATHA Tax Case Appeal Nos.141 to 143 of 2018 and C.M.P.Nos.1840 & 1842 of 2018 M/s.Nani Agro Foods Pvt. Ltd., 32, Ottukkaa Chinniah Street, Erode – 638 003.

... Appellant in all appeals Vs.

The Assistant Commissioner of Income Tax, Central Circle – IV, Coimbatore. ... Respondent in all appeals

Tax Case Appeals in T.C.A.Nos.141 to 143 of 2018 filed under Section 260A of the Income Tax Act, 1961 against the order of the Income Tax Appellate Tribunal, Chennai "A" Bench, dated 24.05.2017 passed in I.T.(SS) A.No.165/Mds/2005, I.T.(SS) A.No.169/Mds/2005 and C.O.No.36/Mds/2006 in IT (SS) A.No.169/Mds/2005 respectively. Page 1/7 https://www.mhc.tn.gov.in/judis/ Tax Case Appeal Nos.141 to 143 of 2018 For Appellant : Mr.R.Venkata Narayanan for M/s.Subbaraya Aiyar Padmanabhan in all appeals For Respondent : Mr.T.R.Senthil Kumar

Senior Standing Counsel in all appeals C O M M O N J U D G M E N T (Delivered by M.DURAISWAMY, J.) The above appeals filed by the assessee under Section 260A of the Income Tax Act, 1961 ('the Act' for brevity), are directed against the order dated 24.05.2017 passed by the Income Tax Appellate Tribunal, Chennai "A" Bench, ('the Tribunal' for brevity) in I.T.(SS) A.No.165/Mds/2005,

I.T.(SS)

A.No.169/Mds/2005

and C.O.No.36/Mds/2006 in IT (SS) A.No.169/Mds/2005 for the Block Period 1997-98 to 2003-04 (upto 08.08.2002). 2.The appellant/assessee has raised the following substantial questions of law in the above appeals : T.C.A.No.141 of 2018 : “1.Whether the Income Tax Appellate Tribunal was right in law holding that the block assessment order passed Page 2/7 https://www.mhc.tn.gov.in/judis/ Tax Case Appeal Nos.141 to 143 of 2018 on 21.10.2004 is within time limit as prescribed in Explanation 2 to Section 158BE(1)(b) of the Income Tax Act 1961 without appreciating that the last Panchanama in respect of execution of relevant of warrant of authorization was drawn on 08.08.2002 and not on 01.10.2002? 2.Whether the Tribunal was right in law in following the judgment in the case of VLS Finance Ltd. v. CIT [384 ITR 1 (SC)] which has no application to the facts of the present case? 3.Whether the Tribunal was right in law in holding that block assessment is not barred by limitation without appreciating that in the present case, there was no subsequent search at all and only Panchanamas were prepared subsequently and that too, regarding the lifting of prohibitory orders? 4.Whether the Income Tax Appellate Tribunal was right in law in holding that the Panchanama drawn on 01.10.2002 (in the case of Hari Poddar the last Panchanama was drawn on 3.10.2002) in respect of all three assessees consequent to physical seizure of the hard disk on the basis of the main warrant issued by the D.I.T. Chennai has to be treated as Last Panchanama and therefore, the assessment order passed on 21.10.2004 were Page 3/7 https://www.mhc.tn.gov.in/judis/ Tax Case Appeal Nos.141 to 143 of 2018 within two years from the end of the month in which the last Panchanama was drawn? 5.Whether the Tribunal was right in law in holding that the last Panchanama was drawn in relation to the appellant on 01.10.2002 and thereby upholding the block assessment without deciding on the legality of the conclusion of search with reference to the Panchanama dated 01.10.2002?” T.C.A.Nos.142 and 143 of 2018 : “1.Whether on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal was right in law in sustaining the addition of credits in the name of Periyar

Marketing

Committee

amounting

to Rs.87,70,995/-? 2.Whether on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal was right in law in sustaining the following addition of Rs.22.55 lakhs on account of profit from Vigneswara Traders, and addition of Rs.3.77 Crores on account of bought note purchases?” Page 4/7 https://www.mhc.tn.gov.in/judis/ Tax Case Appeal Nos.141 to 143 of 2018 3.We have heard Mr.R.Venkata Narayanan for M/s.Subbaraya Aiyar Padamanabhan, learned counsel for the appellant/ assessee and Mr.T.R.Senthil Kumar, learned Senior Standing Counsel for the respondent/Revenue. 4. It may not be necessary for this Court to decide the Substantial Questions of Law framed for consideration on account of certain subsequent developments. The Government of India enacted the Direct Tax Vivad Se Vishwas Act, 2020 (Act 3 of 2020) to provide for resolution of disputed tax and for matters connected therewith or incidental thereto. The Act of the Parliament received the assent of the President on 17th March 2020 and published in the Gazette of India on 17th March 2020. 5. We are informed by the learned counsel for the appellant/ assessee that the assessee had already been issued with Form-3 on 29.03.2021 and the learned counsel for the appellant seeks permission of this Court to withdraw the above appeals. Page 5/7 https://www.mhc.tn.gov.in/judis/ Tax Case Appeal Nos.141 to 143 of 2018 6. In view of the submission made by the learned counsel for the appellant/assessee, the above Tax Case Appeals stand dismissed as withdrawn. No costs. Consequently, connected miscellaneous petitions are closed. [M.D., J.] [R.H., J.] 20.04.2021 (2/2)

Index : Yes/No

Internet : Yes

mkn To 1. Income Tax Appellate Tribunal, Chennai "A" Bench 2.The Assistant Commissioner of Income Tax, Central Circle – IV, Coimbatore. Page 6/7 https://www.mhc.tn.gov.in/judis/ Tax Case Appeal Nos.141 to 143 of 2018 M. DURAISWAMY, J. and R. HEMALATHA, J. mkn Tax Case Appeal Nos.141 to 143 of 2018

20.04.2021 (2/2) Page 7/7 https://www.mhc.tn.gov.in/judis/

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