THE COMMISSIONER OF vs. M/S. TAMILNADU PETROPRODUCTS

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TCA/239/2015HC Madras30 March 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 respondent/assessee submitted that the assessee had availed the Vivad Se Vishwas Scheme and had been issued Form-3 on 05.01.2021. 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. No costs were awarded. The principle that can be cited is that where a taxpayer opts for a tax settlement scheme like Vivad Se Vishwas, pending appeals on tax disputes become infructuous.

What were the facts?

The Revenue, Commissioner of Income Tax, Chennai, filed an appeal under Section 260A of the Income Tax Act, 1961, against an order dated 24.02.2012 passed by the Income Tax Appellate Tribunal, Chennai "C" Bench, in I.T.A.No.458/Mds/2010 for the assessment year 2003-04. The appeal was admitted on substantial questions of law concerning the applicability of Section 41(1) of the Act to a refund granted pursuant to a High Court order. During the pendency of the appeal, the Direct Tax Vivad Se Vishwas Act, 2020, was enacted. The assessee, M/s. Tamil Nadu Petroproducts Ltd., availed the Vivad Se Vishwas Scheme and was issued Form-3 on 05.01.2021.

What were the issues?

1. Whether, on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal was right in holding that cessation of liability under Section 41(1) takes place only when the dispute is ultimately settled, especially when the assessee follows the mercantile system of accounting? (Question of law) 2. Whether the finding of the Tribunal is proper by applying Section 41(1), which speaks about cessation or remission of liability, when the issue relates to a refund granted pursuant to a High Court order on 10.06.2002? (Question of mixed law and fact) 3. Is not the finding of the Tribunal bad by holding that cessation of liability takes place under Section 41(1) when the issue relates to a refund granted by virtue of a Court order? (Question of mixed law and fact) Assessee's contentions: The assessee submitted that they had availed the Vivad Se Vishwas Scheme and had been issued Form-3 on 05.01.2021. Revenue's contentions: The judgment does not record any specific contentions made by the Revenue on the substantial questions of law framed.

Which sections of the Income-tax Act were involved?

Section 260A,Section 41(1)

AI-generated summary — verify with the full judgment below

Tax Case Appeal No.239 of 2015 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 30.03.2021 CORAM THE HON'BLE MR.JUSTICE M. DURAISWAMY AND THE HON'BLE MRS.JUSTICE T.V. THAMILSELVI Tax Case Appeal No.239 of 2015 The Commissioner of Income Tax, Chennai. ... Appellant Vs.

M/s.Tamil Nadu Petroproducts Ltd., No.9, Manali Express Road, Manali, Chennai – 600 068.

... Respondent

Tax Case Appeal filed under Section 260A of the Income Tax Act, 1961 against the order of the Income Tax Appellate Tribunal, Chennai "C" Bench, dated 24.02.2012 passed in I.T.A.No.458/Mds/2010. For Appellant : Mr.T.Ravikumar Senior Standing Counsel For Respondent : Mr.R.Venkata Narayanan for M/s.Subbaraya Aiyar Page 1/5 https://www.mhc.tn.gov.in/judis/ Tax Case Appeal No.239 of 2015 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 24.02.2012 passed by the Income Tax Appellate Tribunal, Chennai "C" Bench, ('the Tribunal' for brevity) in I.T.A.No.458/Mds/2010 for the assessment year 2003-04. The above appeal has been admitted on 21.07.2015 on the following Substantial Questions of Law: "1.Whether on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal was right in holding that the cessation of liability under Section 41(1) takes place that too only when the dispute is ultimately settled, especially when the assessee is following mercantile system of accounting? 2.Whether the finding of the Tribunal is proper by applying Section 41(1) which speaks about cessation or remission of liability while so in the present case the issue relates to refund granted pursuant to High Court order on 10.06.2002? Page 2/5 https://www.mhc.tn.gov.in/judis/ Tax Case Appeal No.239 of 2015 3.Is not the finding of the Tribunal bad by holding that cessation of liability takes place under Section 41(1) when the issue relates to refund granted by virtue of Court order?” 2. We have heard Mr.T.Ravikumar, learned Senior Standing Counsel for the appellant/Revenue and Mr.R.Venkata Narayanan for M/s.Subbaraya Aiyar, 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. Page 3/5 https://www.mhc.tn.gov.in/judis/ Tax Case Appeal No.239 of 2015 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 05.01.2021.

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.] [T.V.T.S., J.] Index : Yes/No 30.03.2021 Internet : Yes

mkn To 1. Income Tax Appellate Tribunal, Chennai "C" Bench 2.The Commissioner of Income Tax, Chennai. Page 4/5 https://www.mhc.tn.gov.in/judis/ Tax Case Appeal No.239 of 2015 M. DURAISWAMY, J. and T.V. THAMILSELVI, J. mkn Tax Case Appeal No.239 of 2015

30.03.2021 Page 5/5 https://www.mhc.tn.gov.in/judis/

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