PRINCIPAL COMMISSIONER OF IN vs. M/S.HOTEL SARAVANA BHAVAN

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TCA/206/2020HC Madras17 April 2021Bench: Hon`ble Mr Justice M.DURAISWAMY5 pages
AI SummaryWithdrawn

What did the High Court hold?

The High Court noted that the Direct Tax Vivad Se Vishwas Act, 2020, was enacted to provide for the resolution of disputed tax. The learned counsel for the assessee submitted that the assessee had availed this scheme and had been issued Form-3 on 30.03.2021. Since the assessee had been issued Form-3, the High Court held that nothing further survived for adjudication in the appeal. Consequently, the Tax Case Appeal was disposed of on this basis, without deciding the substantial questions of law.

What were the facts?

The Revenue, Principal Commissioner of Income Tax, Central – 1, filed an appeal under Section 260A of the Income Tax Act, 1961, against the order of the Income Tax Appellate Tribunal, Chennai "A" Bench, dated 22.11.2019. The appeal pertained to assessment year 2014-15 and challenged the Tribunal's direction to levy penalty under Section 271AAB of the Act at 10% of undisclosed income. The High Court admitted the appeal on substantial questions of law. During the proceedings, the assessee, M/s. Hotel Saravana Bhavan, submitted that they had availed the Direct Tax Vivad Se Vishwas Act, 2020, and had been issued Form-3 on 30.03.2021.

What were the issues?

1. Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was correct in law in directing the Assessing Officer to levy the penalty under Section 271AAB of the IT Act at 10% of the undisclosed income? 2. Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was correct in law in not appreciating that the assessee did not file the return of income before the specified due date, and therefore, the assessee's case falls squarely under sub-clause (c) of sub-section (1) of Section 271AAB of the I.T. Act? Assessee's contention: The assessee had availed the Vivad Se Vishwas Scheme and was issued Form-3 on 30.03.2021. Revenue's contention: The assessee did not file the return of income before the specified due date, thus falling under Section 271AAB(1)(c). The Tribunal erred in directing penalty at 10% of undisclosed income.

Which sections of the Income-tax Act were involved?

Section 260A,Section 271AAB

AI-generated summary — verify with the full judgment below

Tax Case Appeal No.206 of 2020 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 17.04.2021 CORAM THE HON'BLE MR.JUSTICE M. DURAISWAMY AND THE HON'BLE MRS.JUSTICE R. HEMALATHA Tax Case Appeal No.206 of 2020 Principal Commissioner of Income Tax, Central – 1, No.108, Nungambakkam High Road, Chennai – 600 034. ... Appellant Vs. M/s.Hotel Saravana Bhavan, C/o.T.N.Seetharaman, Advocate, No.384, (Old No.196), Lloyds Road, Chennai – 600 086.

... Respondent

Tax Case Appeal filed under Section 260A of the Income Tax Act, 1961 against the order of the Income Tax Appellate Tribunal, Chennai "A" Bench, dated 22.11.2019 passed in I.T.A.No.474/Chny/2019. For Appellant : Mr.T.R.Senthil Kumar Senior Standing Counsel and Mrs.K.G.Usha Rani Standing Counsel For Respondent : Mr.R.Kumar Page 1/5 http://www.judis.nic.in Tax Case Appeal No.206 of 2020 J U D G M E N T (Delivered by M.DURAISWAMY, J.) This appeal filed by the Revenue under Section 260A of the Income Tax Act, 1961 ('the Act' for brevity), is directed against the order dated 22.11.2019 passed by the Income Tax Appellate Tribunal, Chennai "A" Bench, ('the Tribunal' for brevity) in I.T.A.No.474/Chny/2019 for the assessment year 2014-15. The above appeal has been admitted on 13.08.2020 on the following Substantial Questions of Law: "1.Whether on the facts and in the circumstances of the case, the Appellate Tribunal was correct in law in directing the Assessing Officer to levy the penalty under Section 271AAB of the IT Act at 10% of the undisclosed income? 2.Whether on the facts and in the circumstances of the case, the Appellate Tribunal was correct in law in not appreciating the fact that the assessee did not file the return of income before the specified due date and therefore the assessee's case falls squarely under sub clause (c) of sub section (1) of Section 271AAB of the I.T. Act?” Page 2/5 http://www.judis.nic.in Tax Case Appeal No.206 of 2020 2. We have heard Mr.T.R.Senthil Kumar, learned Senior Standing Counsel and Mrs.K.G.Usha Rani, learned Standing Counsel for the appellant/Revenue and Mr.R.Kumar, learned counsel 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.Learned counsel for the respondent/assessee submitted that the assessee had availed the Vivad Se Vishwas Scheme and that the respondent/assessee had already been issued with Form–3 on Page 3/5 http://www.judis.nic.in Tax Case Appeal No.206 of 2020 30.03.2021.

5.Since the respondent/assessee had been issued with Form-3, nothing survives for adjudication in the above appeal. Recording the submission made by the learned counsel for the respondent/assessee, the Tax Case Appeal stands disposed of. No costs. [M.D., J.] [R.H., J.] 17.04.2021

Index : Yes/No

Internet : Yes

mkn To 1. Income Tax Appellate Tribunal, Chennai "A" Bench 2.The Principal Commissioner of Income Tax, Central – 1, No.108, Nungambakkam High Road, Chennai – 600 034. Page 4/5 http://www.judis.nic.in Tax Case Appeal No.206 of 2020 M. DURAISWAMY, J. and R. HEMALATHA, J. mkn Tax Case Appeal No.206 of 2020

17.04.2021 Page 5/5 http://www.judis.nic.in

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