SHRI S.KUMARAGURUBARAN vs. THE INCOME TAX OFFICER

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TCA/224/2021HC Madras22 March 2021Bench: Hon`ble Mr Justice T. S. SIVAGNANAM4 pages
AI SummaryRemanded

What did the High Court hold?

The High Court noted that the assessee had filed a declaration under the Vivad Se Vishwas Scheme on 21.2.2021 and was awaiting orders. In light of this subsequent event, the Court directed the Competent Authority to process the declaration in accordance with the Direct Tax Vivad Se Vishwas Act, 2020, and pass appropriate orders expeditiously. The assessee was granted liberty to restore the appeal if the decision on the declaration was not in their favour. The Court stated that if such a prayer for restoration was made, the Registry would entertain it without insisting on a condonation of delay application. Consequently, the substantial questions of law raised in the appeal were left open and not decided on merits. The tax case appeal was disposed of with the aforementioned liberty.

What were the facts?

The assessee, Shri S. Kumaragurubaran, filed an appeal before the High Court of Judicature at Madras against an order dated 25.7.2017 passed by the Income Tax Appellate Tribunal, Chennai. The appeal pertains to the assessment year 2007-08 and challenges the levy of capital gains tax on the sale of agricultural land. The assessee contended that the agricultural land was of an exempted category. The procedural history relevant to the appeal is that the assessee filed a declaration/undertaking under the Vivad Se Vishwas Scheme on 21.2.2021 and was awaiting orders. The High Court noted this subsequent event in its decision.

What were the issues?

1. Whether the provisions of Section 2(14) of the Income Tax Act, 1961, were correctly interpreted to sustain the levy of capital gains tax on the sale of an exempted category of agricultural land? (Question of law) 2. Whether the Appellate Tribunal erred in stretching the scope of Section 2(14) of the Act to interpret it in a manner that sustains the levy of capital gains tax on the sale of exempted agricultural land? (Question of law) 3. Whether the Appellate Tribunal was justified in rewriting the principles relating to the levy of capital gains tax on agricultural land, overlooking recent decisions of the High Court? (Question of law) Assessee's contentions: The assessee argued that the agricultural land sold was of an exempted category and that the Tribunal had incorrectly interpreted Section 2(14) of the Act. The assessee also relied on three recent decisions of the High Court concerning the levy of capital gains tax on agricultural land. Revenue's contentions: The judgment does not record any specific contentions made by the Revenue.

Which sections of the Income-tax Act were involved?

Section 2(14),Section 260A

AI-generated summary — verify with the full judgment below

TCA.No.224 of 2021 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 22.3.2021 CORAM THE HONOURABLE MR.JUSTICE T.S.SIVAGNANAM and THE HONOURABLE MS.JUSTICE R.N.MANJULA Tax Case Appeal No.224 of 2021 Shri S.Kumaragurubaran ...Appellant Vs The Income Tax Officer, Non Corporate Ward 15(2), Chennai-34 ...Respondent APPEAL under Section 260A of the Income Tax Act, 1961 against the order dated 25.7.2017 passed by the Income Tax Appellate Tribunal, 'D'/SMC Bench, Chennai made in I.T.A.No.3284/Mds/2016 for the assessment year 2007-08. For Appellant : Mr.A.S.Sriraman For Respondent : Mrs.R.Hemalatha, SSC Judgment was delivered by

T.S.SIVAGNANAM

This appeal has been filed by the assessee under Section 260A of the Income Tax Act, 1961 ('the Act' for brevity) challenging the order dated 25.7.2017 made in I.T.A.No.3284/Mds/2016 on the file of the 1/4 https://www.mhc.tn.gov.in/judis/ TCA.No.224 of 2021 Income Tax Appellate Tribunal, Chennai 'D'/SMC Bench ('the Tribunal' for brevity) for the assessment year 2007-08. 2. The assessee has filed this appeal by raising the following substantial questions of law: “i. Whether the provisions of Section 2(14) of the Act were correctly interpreted in order to sustain the levy of capital gains tax on the sale of exempted category of agricultural land ? ii. Whether the Appellate Tribunal is correct in stretching the scope of the provisions of Section 2(14) of the Act in an attempt to interpret the said provisions with a view to sustain the levy of capital gains tax on the sale of exempted category of agricultural land? And iii. Whether the Appellate Tribunal is justified in rewriting the principles relating to levy of capital gains tax on the sale of agricultural land overlooking the recent three decisions of this Court?” 3. We have heard Mr.A.S.Sriraman, learned counsel appearing for the the appellant/assessee and Mrs.R.Hemalatha, learned Senior Standing Counsel accepting notice for the respondent/Revenue. 2/4 https://www.mhc.tn.gov.in/judis/ TCA.No.224 of 2021 4. The learned counsel for the assessee submits that the assessee already filed the declaration/undertaking under the Vivad Se Vishwas Scheme on 21.2.2021 and is awaiting orders to be passed in Form No.3. 5. In the light of the subsequent event, the Competent Authority shall process the application/declaration in accordance with the Direct Tax Vivad Se Vishwas Act, 2020 (Act 3 of 2020) and pass appropriate orders as expeditiously as possible. The assessee is given liberty to restore this appeal in the event the ultimate decision to be taken 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 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 appropriate Division Bench for orders. 6. The tax case appeal stands disposed of with the aforementioned liberty. Consequently, the substantial questions of law raised are left open. No costs. RS 22.3.2021 3/4 https://www.mhc.tn.gov.in/judis/ TCA.No.224 of 2021 T.S.SIVAGNANAM,J AND R.N.MANJULA,J RS To 1.The Income Tax Appellate Tribunal, 'D'/SMC Bench, Chennai. 2.The Income Tax Officer, Non Corporate Ward 15(2), Chennai-34. TCA.No.224 of 2021 22.3.2021 4/4 https://www.mhc.tn.gov.in/judis/

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