THE PR.COMMISSIONER OF INCOM vs. P.KESARIMAL JAIN

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TCA/180/2020HC Madras16 December 2020Bench: Hon`ble Mr Justice T. S. SIVAGNANAM8 pages
AI SummaryWithdrawn

What did the High Court hold?

The High Court decided not to adjudicate the substantial questions of law due to subsequent developments. The Court noted the enactment of the Direct Tax Vivad Se Vishwas Act, 2020, which allows assessees to resolve tax disputes. The Court was informed that the assessee had filed declarations under Section 4 of the Vivad Se Vishwas Act on 09.06.2020. Consequently, the Court held that keeping the appeal pending would serve no useful purpose. The Tax Case Appeal was disposed of on the ground that the assessee had availed the benefit of the Act. The Department was directed to process the application at the earliest. The assessee was granted liberty to restore the appeal if the decision under the Vivad Se Vishwas Act was not in their favour. The substantial questions of law were left undecided.

What were the facts?

The Principal Commissioner of Income Tax - 9, Chennai (Revenue) filed a Tax Case Appeal under Section 260-A of the Income Tax Act, 1961, challenging an order dated 06.12.2019 passed by the Income Tax Appellate Tribunal, Madras 'A' Bench. The appeal pertains to Assessment Year 2013-2014 and concerns an order passed by the Tribunal in I.T.A.No.1799/Chny/2018. The High Court admitted the appeal on 23.07.2020, framing substantial questions of law. The Revenue was represented by counsel, but the assessee, Mrs. P. Kesarimal Jain, did not appear. The Court noted that the Direct Tax Vivad Se Vishwas Act, 2020, enacted subsequently, provided an option for resolution of disputed tax matters.

What were the issues?

1. Whether, on the facts and in the circumstances of the case, the Tribunal was right in setting aside the Assessing Officer's order for re-examination, despite the Assessing Officer having conducted a thorough examination during assessment? (Question of law and fact, turning on the Tribunal's power to remand). 2. Whether, on the facts and in the circumstances of the case, the Tribunal was right in remitting the issue back to the Assessing Officer, citing Kanhaiyalal and Sons (HUF), shifting the onus to the Revenue to bring on record the assessee's role in promoting the company, their relation with promoters, and price inflation, which the Assessing Officer had already examined? (Question of law and fact, turning on the Tribunal's powers and the burden of proof). Assessee's contentions: Not recorded as there was no appearance. Revenue's contentions: The Revenue argued that the Tribunal erred in setting aside the Assessing Officer's detailed order and remitting the matter, as the Assessing Officer had already performed the necessary examination and the onus should not have been shifted to the Revenue.

Which sections of the Income-tax Act were involved?

Section 260-A,Section 4

AI-generated summary — verify with the full judgment below

T.C.A.No.180 of 2020 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 16.12.2020 CORAM THE HONOURABLE MR.JUSTICE T.S.SIVAGNANAM and THE HONOURABLE MRS.JUSTICE V.BHAVANI SUBBAROYAN T.C.A.No.180 of 2020

The Pr. Commissioner of Income Tax - 9, Chennai. ... Appellant Vs. Mrs.P.Kesarimal Jain C/o M/s.Mayur Exporium No.144, Mint Street, Sowcarpet, Chennai - 600 079. PAN : AADPK9954G ... Respondent Tax Case Appeal filed under Section 260-A of the Income Tax Act, 1961, against the order of the Income Tax Appellate Tribunal, Madras 'A' Bench, Chennai, dated 06.12.2019 passed in I.T.A.No.1799/Chny/2018 relating to the Assessment Year 2013 - 2014. For Appellant : Mr.T.Ravi Kumar For Respondent : No Appearance 1/8 http://www.judis.nic.in T.C.A.No.180 of 2020

JUDGMENT [Order of the Court was made by

T.S.SIVAGNANAM

, J.]

This appeal has been filed by the Revenue under Section 260 A of the Income Tax Act, 1961 ('the Act' for brevity), challenging the order dated 06.12.2019 passed by the Income Tax Appellate Tribunal, Madras 'A' Bench ('the Tribunal' for brevity) in I.T.A.No.1799/Chny/2018 relating to the Assessment Year 2013 - 2014. The appeal was admitted on 23.07.2020 on the following Substantial Questions of Law : “(i). Whether on the facts and in the circumstances of the case, the Tribunal was right in setting aside the well reasoned order passed by the Assessing Officer for re- examination, especially when the assessing officer had duly examined the matter in great depth while framing the assessment order? (ii). Whether on the facts and in the circumstances of the case, the Tribunal was right in remitting the issue back to the file of the Assessing Officer by quoting the decision in the case of Kanhaiyalal and Sons (HUF) in ITA.No.1849/Chny/2014 wherein the onus has been shifted to the revenue with a direction that the Assessing Officer is to 2/8 http://www.judis.nic.in T.C.A.No.180 of 2020 bring on record the role of the Assessee in promoting the Company and the relation of the Assessee if any with that of the promoters and role of inflating of prices etc which exercise had already been done by the AO while framing the assessment?” 2. We have heard Mr.T.Ravi Kumar, learned counsel appearing for the appellant/revenue and there is no representation for the respondent/assessee. 3. 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.

4.

In terms of the said Act, the assessee has been given an option to put an end to the tax disputes, which may be pending at different levels either before the First Appellate Authority or before the Tribunal or before 3/8 http://www.judis.nic.in T.C.A.No.180 of 2020 the High Court or before the Hon'ble Supreme Court of India. Under Section 2(j) “disputed tax” has been defined. In terms of Section 3, where a declarant means a person, who files a declaration under Section 4 on or before the last date files a declaration to the designated authority in accordance with the provisions of Section 4 in respect of tax arrears, then, notwithstanding anything contained in the Income Tax Act or any other law for the time being in force, the amount payable by the declarant shall be determined in terms of Section 3(a-c) thereunder. 5. The First Proviso to Section 3 states that in case, where an Appeal or Writ Petition or Special Leave Petition is filed by the Income Tax authority on any issue before the Appellate Forum, the amount payable shall be one-half of the amount in the table stipulated in Section 3 calculated on such issue, in such a manner as may be prescribed. The second proviso deals with the cases, where the matter is before the Commissioner (Appeals) or before the Dispute Resolution Panel. The third proviso deals with cases, where the issue is pending before the Income Tax Appellate Tribunal. The filing of the declaration is as per Section 4 of the Act and the particulars to be furnished are also mentioned in the Sub Sections of Section 4. Section 5 4/8 http://www.judis.nic.in T.C.A.No.180 of 2020 of the Act deals with the time and manner of the payment and Section 6 deals with Immunity from initiation of proceedings in respect of offence and imposition of penalty in certain cases. Section 9 of the Act deals with cases, where the Act 3 of 2020 will not be applicable. 6. We are informed by the learned counsel for the appellant/revenue that the assessee has already filed the declarations under Section 4 of the Act on 09.06.2020. 7. In the light of the fact that the assessee has already availed the benefit under the Act, no useful purpose would be served in keeping this appeal pending. At the same time, safeguarding the interest of the assessee in the event the order to be passed by the Department under the Act is not in favour of the assessee. Accordingly, the Tax Case Appeal stands disposed of on the ground that the assessee has already filed a declaration and the Department shall process the application at the earliest in accordance with the said Act and communicate the decision to the assessee at the earliest. As observed, the assessee is given liberty to restore this appeal in the event the ultimate decision to be taken on the declarations filed by the assessee under 5/8 http://www.judis.nic.in T.C.A.No.180 of 2020 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 application to be filed for condonation of delay in restoration of the appeal and on such request made by the assessee by filing a Miscellaneous Petition for Restoration, the Registry shall place such petition before the Division Bench for orders. 8. With this observation, the Tax Case Appeal stands disposed of with the aforementioned liberty and Consequently, the Substantial Questions of Law are left open. No costs.

(T.S.S.,J) (V.B.S.,J) 16.12.2020 Ssd Index: Yes / No Internet: Yes / No Speaking Order/Non-Speaking Order To The Income Tax Appellate Tribunal, Madras 'A' Bench, Chennai. 6/8 http://www.judis.nic.in T.C.A.No.180 of 2020 7/8 http://www.judis.nic.in T.C.A.No.180 of 2020 T.S.SIVAGNANAM, J. AND V.BHAVANI SUBBAROYAN, J. Ssd T.C.A.No.180 of 2020 16.12.2020 8/8 http://www.judis.nic.in

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