THE COMMISSIONER OF INCOME T vs. SAROJ MOOTHA

TCA/237/2020HC Madras22 August 2022Bench: Hon`ble Mr Justice R. MAHADEVAN5 pages

AI SummaryWithdrawn

What did the High Court hold?

The High Court noted that during the pendency of the Tax Case Appeal, the assessee had availed the benefits under the Direct Tax Vivad Se Vishwas Act, 2020. The assessee filed the necessary declarations, which were accepted, and the Income Tax Department issued a Form 5 order for full and final settlement of tax arrears on 28.10.2021. In view of this subsequent development, the High Court was of the opinion that nothing further survived for adjudication in the appeal. Consequently, the Tax Case Appeal was disposed of based on the submission made by the learned counsel for the appellant/Revenue. No costs were awarded. The specific questions of law were not decided on merits.

What were the facts?

The Commissioner of Income Tax, Chennai (the Revenue) filed a Tax Case Appeal before the High Court of Judicature at Madras, challenging an order dated 03.09.2019 passed by the Income Tax Appellate Tribunal, Madras “B” Bench. The appeal pertains to the assessment year 2012-13 and concerns an order passed by the Tribunal in I.T.A.No.423/Chny/2019. The High Court admitted the appeal on substantial questions of law. However, during the pendency of the appeal, the assessee, Smt. Saroj Mootha, availed the benefit of the Direct Tax Vivad Se Vishwas Act, 2020, filed declarations, which were accepted, and a Form 5 order for full and final settlement of tax arrears was issued on 28.10.2021.

What were the issues?

The High Court had to decide the following substantial questions of law: 1. Whether the Tribunal was justified in setting aside the Assessing Officer's order for re-examination, despite the Assessing Officer having examined all material evidence while passing the assessment order? 2. Whether the Tribunal was correct in remitting the issue back to the Assessing Officer, citing decisions in Kanhaiyal & Sons (HUF) and Sunil Kumar Lalwani, shifting the onus to the Revenue to prove the assessee's role in promoting the company, their relation with promoters, and price inflation, when the Assessing Officer and SEBI had already conducted such an exercise? 3. Whether the Tribunal's finding was perverse, given that it contradicted the principle that the party asserting a fact bears the initial burden of proof, after which the burden shifts to the Department? Assessee's arguments: Not recorded. Revenue's arguments: The Revenue contended that the Tribunal erred in setting aside the Assessing Officer's order and remitting the issue back to the Assessing Officer, particularly when the Assessing Officer and SEBI had already conducted thorough examinations. The Revenue argued that the Tribunal's decision was perverse and contrary to established principles of burden of proof.

Which sections of the Income-tax Act were involved?

Section 260A

AI-generated summary — verify with the full judgment below

Tax Case Appeal No.237 of 2020 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 22.08.2022 CORAM : THE HON'BLE MR. JUSTICE R. MAHADEVAN AND THE HON'BLE MR. JUSTICE MOHAMMED SHAFFIQ Tax Case Appeal No.237 of 2020 The Commissioner of Income Tax, Chennai ... Appellant Vs. Smt. Saroj Mootha, No.31, Chandrappa Mudali Street, Chennai 600 079. PAN: AKXPM1768Q

... Respondent Tax Case Appeal filed under Section 260A of the Income Tax Act, 1961 against the order of the Income Tax Appellate Tribunal, Madras “B” Bench, Chennai, passed in I.T.A.No.423/Chny/2019, dated 03.09.2019 for the assessment year 2012-13. For Appellant : Mr.T.Ravikumar Standing Counsel For Respondent : No appearance Page 1/5 https://www.mhc.tn.gov.in/judis Tax Case Appeal No.237 of 2020 J U D G M E N T (Judgment was delivered by R. MAHADEVAN,J.) This Tax Case Appeal has been filed by the appellant / Revenue challenging the order dated 03.09.2019 passed by the Income Tax Appellate Tribunal, Madras “B” Bench, Chennai, ('the Tribunal', for brevity) in I.T.A.No.423/Chny/2019 for the assessment year 2012-13. 2. On 26.08.2020, this Tax Case Appeal was admitted by this Court on the following substantial questions of law : "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 had been duly examined by the AO 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 case of Kanhaiyal & Sons (HUF) in ITA.No.1849/Chny/2014 Sunil Kumar Lalwani and that Aashesh Kumar Lalwani Page 2/5 https://www.mhc.tn.gov.in/judis Tax Case Appeal No.237 of 2020 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 Assessing Officer and the SEBI? And 3. Is not the finding of the Tribunal perverse especially when the decision of the Tribunal is contrary to the time tested principle 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 would shift to the Department?” 3.When the matter was taken up for consideration, the learned Standing counsel appearing for the appellant / Revenue submitted that during the pendency of this tax case appeal, the assessee has availed the benefit conferred under the Direct Tax Vivad Se Vishwas Act, 2020 and filed necessary declarations, which were accepted and Form 5 / order for full and final settlement of tax arrears, was also issued by the Income tax department, on 28.10.2021. Page 3/5 https://www.mhc.tn.gov.in/judis Tax Case Appeal No.237 of 2020 4.In view of the subsequent development, this court is of the opinion that nothing survives for adjudication in this appeal. Recording the submission so made by the learned counsel for the appellant/Revenue, the Tax Case Appeal stands disposed of. No costs. [R.M.D.,J.] [M.S.Q.,J.] 22.08.2022

msr

Internet : Yes

Index : Yes / No To 1. Income Tax Appellate Tribunal, Madras “B” Bench, Chennai 2.The Income Tax Officer, Non Corporate Ward -6(3), Chennai.

The Commissioner of Income Tax (Appeals)-5 Chennai-34. Page 4/5 https://www.mhc.tn.gov.in/judis Tax Case Appeal No.237 of 2020 R. MAHADEVAN, J and MOHAMMED SHAFFIQ, J. msr Tax Case Appeal No.237 of 2020

22.08.2022 Page 5/5 https://www.mhc.tn.gov.in/judis

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