THE COMMISSIONER OF INCOME T vs. M. SAMPATH RAJ JAIN

TCA/184/2021HC Madras23 March 2021Bench: Hon`ble Mr Justice T. S. SIVAGNANAM6 pages

AI SummaryWithdrawn

What did the High Court hold?

The High Court noted that the assessees had filed declarations under the Vivad Se Vishwas Scheme and that orders had been passed in Form No. 3. In light of this subsequent event, the Court granted liberty to the assessees to restore these appeals if the ultimate decision on their declarations under the Vivad Se Vishwas Act was not in their favour. If such a prayer was made, the Registry was directed to entertain it without insisting on a condonation of delay application. The appeals were disposed of with this liberty, and consequently, the substantial questions of law framed were left open. No costs were awarded.

What were the facts?

These are three Tax Case Appeals filed by the Revenue against a common order dated 13.06.2019 passed by the Income Tax Appellate Tribunal (ITAT), Madras 'A' Bench. The appeals pertain to the assessment year 2009-10. The ITAT had set aside the orders passed by the Assessing Officer (AO) and remitted the issues back to the AO for re-examination. The Revenue is challenging the ITAT's decision to set aside the AO's order and remit the matter, arguing that the AO had already examined all materials and that the ITAT's reasoning was perverse. The assessees, however, had filed declarations under the Vivad Se Vishwas Scheme, and orders had been passed in Form No. 3.

What were the issues?

The Tribunal had to decide the following substantial questions of law: 1. Whether the Tribunal was justified in setting aside the AO's order for re-examination when all materials were already examined. 2. Whether the Tribunal was correct in remitting the issue to the AO, shifting the onus to the Revenue to prove the assessee's role in promoting a company, inflating prices, etc., after the AO and SEBI had already conducted such exercises. 3. Whether the Tribunal's reasoning and finding were perverse, contrary to the principle that the party asserting a fact bears the initial burden of proof. 4. Whether the Tribunal was right in remanding the matter when all available materials were before it, and no fresh material warranted remand. The Revenue contended that the ITAT's order was perverse and contrary to established principles of burden of proof. The assessees' counsel submitted that declarations under the Vivad Se Vishwas Scheme had been filed and orders passed.

Which sections of the Income-tax Act were involved?

Section 260A

AI-generated summary — verify with the full judgment below

TCA.Nos.184 to 186 of 2021 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 23.03.2021 CORAM : The Honourable Mr.Justice T.S.SIVAGNANAM and The Honourable Ms.Justice R.N.MANJULA Tax Case Appeal Nos.184 to 186 of 2021 The Commissioner of Income Tax, Chennai. ...Appellant in all appeals Vs Shri M.Sampath Raj Jain ...Respondent in TCA.No.184/2021 Shri Pradeep Kumar ...Respondent in TCA.No.185/2021 Smt.Sharmila ...Respondent in TCA.No.186/2021 COMMON PRAYER: Appeals under Section 260A of the Income Tax Act, 1961 against the common order dated 13.06.2019 made in ITA.Nos.1245/Chny/2017, 1405/Chny/2017 and 1246/Chny/2017 for the assessment year 2009-10 on the file of the Income Tax Appellate Tribunal, Madras 'A' Bench, Chennai. For Appellant: Mr.T.Ravikumar, SSC For Respondents: Mr.Anand 1/6 https://www.mhc.tn.gov.in/judis/ TCA.Nos.184 to 186 of 2021 COMMON JUDGMENT (Delivered by

T.S.Sivagnanam,J

) These appeals have been filed by the Revenue under Section 260A of the Income Tax Act, 1961 ('the Act' for brevity) challenging the common order dated 13.06.2019 made in ITA.Nos.1245/Chny/2017, 1405/Chny/2017 and 1246/Chny/2017 for the assessment year 2009-10 on the file of the Income Tax Appellate Tribunal, Madras 'A' Bench, Chennai ('the Tribunal' for brevity). 2. The Revenue in all these appeals has raised the following substantial questions of law for consideration: "1. 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 all the material placed before the Assessing Officer had been duly examined while passing the assessment order? 2. 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 2/6 https://www.mhc.tn.gov.in/judis/ TCA.Nos.184 to 186 of 2021 case of Sunil Kumar Lalwani and that Aashesh Kumar Lalwani wherein the onus has been shifted to the revenue with a direction that the Assessing Officer is to 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 and the SEBI? 3. Is not the reasoning and finding of the Tribunal perverse especially when the decision of the Tribunal is contrary to the time tested Principal that the person who asserts a fact has to discharge the initial burden cast upon him to show that the said facts are true and only thereafter the burden shifts to the department?" 4. Whether the Tribunal was right in remanding the matter back to the file of AO when all the material that was available before AO, CIT(A) was available before it and there was no fresh material warranting remand?" 3. We have heard Mr.T.Ravikumar, learned Senior Standing Counsel for the appellant and Mr.Anand, learned counsel for the respondent. 3/6 https://www.mhc.tn.gov.in/judis/ TCA.Nos.184 to 186 of 2021 4. The learned counsel for the assessees submit that the assessees already filed the declaration/undertaking under the Vivad Se Vishwas Scheme and orders were passed 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 taken on the declaration filed by the assessees under Section 4 of the said Act is not in favour of the assessees. 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 appeals and on such request made by the assessees by filing a miscellaneous petition for restoration, the Registry shall place such petition 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 framed are left open. No costs. (T.S.S.,J.) (R.N.M.,J.) 23.03.2021 Index:Yes/No Internet:Yes/No hvk 4/6 https://www.mhc.tn.gov.in/judis/ TCA.Nos.184 to 186 of 2021 To 1. The Income Tax Appellate Tribunal, Madras 'A' Bench, Chennai. 2. The Commissioner of Income Tax, Chennai. 5/6 https://www.mhc.tn.gov.in/judis/ TCA.Nos.184 to 186 of 2021 T.S.SIVAGNANAM,J AND R.N.MANJULA,J hvk TCA.Nos.184 to 186 of 2021 23.03.2021 6/6 https://www.mhc.tn.gov.in/judis/

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