COMMISSIONER OF INCOME TAX vs. DR.K.NEDUNCHEZHIAN

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TCA/248/2024HC Madras30 October 2024Bench: Honourable Mr Justice R. SURESH KUMAR4 pages
AI SummaryDismissed

What did the High Court hold?

The High Court dismissed the Tax Case Appeal filed by the Revenue. The dismissal was based on a submission made by the learned Senior Standing Counsel for the appellant Revenue that the tax effect in the instant case was less than the monetary limit imposed by CBDT's Circular No. 9 of 2024 dated September 17, 2024. Consequently, the appeal was disposed of without adjudicating the substantial questions of law raised. The Court explicitly stated that the substantial questions of law were kept open for adjudication at an appropriate stage. No order as to costs was made, and the connected miscellaneous petition was closed.

What were the facts?

The Revenue, represented by the Commissioner of Income Tax, Central Circle-1, Salem, filed a Tax Case Appeal before the Madras High Court challenging an order of the Income Tax Appellate Tribunal (ITAT), Chennai, dated May 25, 2022. The appeal pertains to assessment proceedings concerning Dr. K. Neduchezhian. The core of the dispute involves additions made by the Revenue on account of investments in sand quarrying, which the Revenue alleged were in benami names and belonged to the assessee, based on a confession made by the assessee under Section 132(4) of the Income Tax Act on December 12, 2002. The assessee also furnished affidavits declaring undisclosed income on December 18, 2002.

What were the issues?

The Tribunal was asked to decide three substantial questions of law: 1. Whether the ITAT was correct in deleting additions made on investments in sand quarrying, which the Revenue claimed were benami and belonged to the assessee based on a Section 132(4) confession made on December 12, 2002. 2. Whether the ITAT was correct in not considering the evidentiary value of affidavits voluntarily furnished by the assessee and third parties on December 18, 2002, which were supported by their Section 132(4) statements on December 12, 2002. 3. Whether the ITAT was correct in shifting the onus onto the department without considering the assessee's failure to provide supporting evidence for retracting from their sworn statement under Section 132(4) and the voluntarily filed affidavits. Assessee's Contentions: Not recorded in the judgment. Revenue's Contentions: The Revenue argued that the ITAT erred in deleting the additions, as the investments were in benami names and belonged to the assessee, supported by the assessee's confession under Section 132(4). They also contended that the ITAT failed to consider the evidentiary value of the affidavits and statements, and wrongly shifted the onus to the department.

Which sections of the Income-tax Act were involved?

Section 260A,Section 132(4)

AI-generated summary — verify with the full judgment below

T.C.A.No.248 of 2024 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 30.10.2024 CORAM THE HONOURABLE MR.JUSTICE R.SURESH KUMAR and THE HONOURABLE MR.JUSTICE C.SARAVANAN T.C.A.No.248 of 2024 and C.M.P.No.23110 of 2024 The Commissioner of Income Tax, Central Circle-1, Salem. ... Appellant -Vs- Dr.K.Neduchezhian ... Respondent PRAYER : Tax Case Appeal filed under Section 260 A of the Income Tax Act, 1961, against the order of the Income Tax Appellate Tribunal 'D' Bench, Chennai dated 25.05.2022 in I.T(SS)A No.2/Chny/2018. For Appellant : Mrs.R.Hemalatha Senior Standing Counsel J U D G M E N T (Judgment of the Court was delivered by R.SURESH KUMAR, J.) This Tax Case Appeal has been filed by the Revenue calling in question the correctness of the order passed by the Income Tax Appellate Tribunal, Chennai by raising the following substantial questions of law: 1/4 https://www.mhc.tn.gov.in/judis T.C.A.No.248 of 2024 1. Whether on the facts and in the circumstance of the case the ITAT was right in deleting the additions made on investments made on account sand quarrying which is in benami nature of AOP's and its member who exist only on paper and investment in their names belong to the assessee as confessed by the assessee u/s.132(4) on 12.12.2002? 2. Whether on the facts and in the circumstance of the case the ITAT was right in not considering the evidentiary value and the veracity of the affidavits declaring the undisclosed income voluntarily furnished on 18.12.2002 by the assessee as well as by the third parties which themselves are supported in turn by the statements deposed by them on 12.12.2002 under Section 132(4) of the Income Tax Act? 3. Whether on the facts and in the circumstance of the case the ITAT was right in shifting the onus on the department without deliberating the failure on the part of the assessee by not furnishing any material evidences in support of his retraction against the primary evidences being his sworn statement deposed u/s.132(4) of the Income Tax Act as well as the affidavit voluntarily filed by them? 2. It is brought to our notice by the learned Senior Standing Counsel for 2/4 https://www.mhc.tn.gov.in/judis T.C.A.No.248 of 2024 the appellant Revenue that in the instant case, as per the CBDT's Circular No.9 of 2024 dated 17.09.2024 the tax effect is said to be less than the monetary limit imposed and therefore, the appeal can be disposed of, keeping the substantial questions of law raised in this appeal open for adjudication at a later point of time. 3. Recording the aforesaid submission made by the learned Senior Standing Counsel for the appellant Revenue, this Tax Case Appeal is dismissed for low tax effect, keeping open the substantial questions of law for adjudication at appropriate stage. However, there shall be no order as to costs. Consequently, connected miscellaneous petition is closed. (R.S.K., J.) (C.S.N., J.) 30.10.2024 (2/2) NCC : Yes / No Index : Yes / No Speaking Order : Yes / No vji To The Income Tax Appellate Tribunal 'D' Bench, Chennai. 3/4 https://www.mhc.tn.gov.in/judis T.C.A.No.248 of 2024 R.SURESH KUMAR, J. and C.SARAVANAN, J. vji T.C.A.No.248 of 2024 and C.M.P.No.23110 of 2024 30.10.2024 (2/2) 4/4 https://www.mhc.tn.gov.in/judis

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