THE COMMISSIONER OF INCOME T vs. M/S. REDINGTON INDIA LTD.,

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TCA/323/2021HC Madras21 June 2021Bench: Hon`ble Mr Justice M.DURAISWAMY5 pages
AI SummaryWithdrawn

What did the High Court hold?

The High Court did not decide the substantial question of law framed for consideration. This was due to subsequent developments, specifically the enactment of the Direct Tax Vivad Se Vishwas Act, 2020. The learned counsel for the respondent/assessee submitted that the assessee had availed the Vivad Se Vishwas Scheme and that the Department had issued Form – 3 on 15.04.2021. Since Form – 3 had been issued to the assessee, the High Court noted that nothing further survived for adjudication in the appeal. Consequently, the Tax Case Appeal was disposed of on this basis, without any decision on the merits of the substantial question of law. No costs were awarded.

What were the facts?

The Revenue, Commissioner of Income Tax, Chennai, filed an appeal under Section 260-A of the Income Tax Act, 1961, against an order dated 18.10.2015 passed by the Income Tax Appellate Tribunal, Madras "D" Bench. The appeal pertained to assessment year 2011-2012 and concerned M/s. Redington India Ltd. The dispute revolved around whether a corporate bank guarantee given by the assessee to its associate enterprise was an internal transaction. The High Court was to decide a substantial question of law framed by the Revenue. However, subsequent developments rendered a decision on merits unnecessary.

What were the issues?

1. Whether the Tribunal was right in holding that the Corporate Bank guarantee given by the Assessee to its Associate Enterprise is not an internal transaction, when the fact remains that as per the amended provision of Finance Act, 2012, introduced with retrospective effect from 01.04.2002, the term “Guarantee” had been included under the purview of international transaction as per Explanation (c) to Section 92B? Assessee's Contention: The assessee's counsel submitted that the respondent/assessee had availed the Vivad Se Vishwas Scheme, and the Department had issued Form – 3 on 15.04.2021. Revenue's Contention: The Revenue argued that the Tribunal was wrong in holding the bank guarantee as not an internal transaction, citing the retrospective amendment to Section 92B of the Income Tax Act, 1961, which included guarantees within the definition of international transactions.

Which sections of the Income-tax Act were involved?

Section 260-A,Section 92B

AI-generated summary — verify with the full judgment below

Tax Case Appeal No.323 of 2021 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 21.06.2021 CORAM THE HON'BLE MR.JUSTICE M. DURAISWAMY AND THE HON'BLE MRS.JUSTICE R. HEMALATHA Tax Case Appeal No.323 of 2021 The Commissioner of Income Tax, Chennai.

... Appellant Vs.

M/s.Redington India Ltd., 95, Mount Road, SPL Guindy House Guindy, Chennai – 600 032. PAN:AABCR03479 ... Respondent

Tax Case Appeal filed under Section 260-A of the Income Tax Act, 1961 against the order of the Income Tax Appellate Tribunal, Madras "D" Bench, dated 18.10.2015 passed in I.T.A.No.1145/Mds/2016. For Appellant : Mr. T. Ravikumar Senior Standing Counsel For Respondent : Mr.R. Venkatanarayanan Page 1/5 http://www.judis.nic.in Tax Case Appeal No.323 of 2021 J U D G M E N T (Delivered by M.DURAISWAMY, J.) This appeal filed by the Revenue under Section 260-A of the Income Tax Act, 1961 ('the Act' for brevity), is directed against the order dated 18.10.2015 passed by the Income Tax Appellate Tribunal, Madras "D" Bench, ('the Tribunal' for brevity) in I.T.A.No.1145/Mds/2016 for the assessment year 2011-2012. 2. The appellant has raised the following Substantial Question of Law in the above appeal: “ Whether the Tribunal was right in holding that the Corporate Bank guarantee given by the Assessee to its Associate Enterprise is not an internal transaction when the fact remains that as per the amended provision of Finance Act, 2012 introduced with retrospectives effect from 01.04.2002 the term “Guarantee” had been included under the purview of international transaction as per Explanation (c ) to Section 92B?” Page 2/5 http://www.judis.nic.in Tax Case Appeal No.323 of 2021 3. We have heard Mr.T.Ravikumar, learned Senior Standing Counsel for the appellant/Revenue and Mr.R.Venkatanarayanan, learned counsel for the respondent/assessee. 4. It may not be necessary for this Court to decide the Substantial Question 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. 5. The learned counsel for the respondent/assessee submitted that the respondent/assessee had availed Vivad Se Vishwas Scheme and that the Department had also issued Form – 3 on 15.04.2021. Page 3/5 http://www.judis.nic.in Tax Case Appeal No.323 of 2021 6. Since the assessee has 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.]

21.06.2021

Index : Yes/No Internet : Yes gv

To 1. Income Tax Appellate Tribunal, Madras "D" Bench. 2. The Commissioner of Income Tax, Chennai. Page 4/5 http://www.judis.nic.in Tax Case Appeal No.323 of 2021 M. DURAISWAMY, J. and R. HEMALATHA., J. gv Tax Case Appeal No.323 of 2021

21.06.2021 Page 5/5 http://www.judis.nic.in

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