A.SAVARIMUTHU vs. THE INCOME TAX OFFICER

PDF · subscribers
TCA/366/2020HC Madras11 November 2021Bench: Hon`ble Mr Justice R. MAHADEVAN5 pages
AI SummaryWithdrawn

What did the High Court hold?

The High Court noted that the assessee had availed the benefit conferred under the Direct Tax Vivad Se Vishwas Act, 2020, a beneficial legislation for the resolution of disputed tax matters. The assessee's declarations under this Act were accepted, and Form 3 was issued by the Income Tax Department. In light of this development, the Court deemed it unnecessary to decide the substantial questions of law that had arisen in the Tax Case Appeal. The appeal was disposed of based on the submissions made by both the assessee and the Revenue, with a direction to the department to process the application under the Vivad Se Vishwas Act in accordance with its provisions and communicate the decision to the assessee at the earliest. No costs were awarded. The operative direction was to process the Vivad Se Vishwas application.

What were the facts?

The assessee, A. Savarimuthu, filed a Tax Case Appeal before the High Court of Judicature at Madras, challenging an order dated 22.02.2018 passed by the Income Tax Appellate Tribunal, 'C' Bench, Chennai. The appeal pertained to Assessment Year 2013-14. The substantial questions of law admitted by the court concerned the denial of exemption under Section 54F of the Income Tax Act, 1961, in respect of investment in a property yielding rental income from shops, and whether the Tribunal correctly classified the property as commercial based on property tax assessment and electricity connection, rather than the Income Tax Act assessment. During the pendency of the appeal, the assessee filed Forms 1 and 2 under the Direct Tax Vivad Se Vishwas Act, 2020, which were accepted, and Form 3 was issued on 21.04.2021.

What were the issues?

The High Court had to decide three substantial questions of law: 1. Whether the Tribunal was correct in denying exemption under Section 54F of the Income Tax Act, 1961, for investment in a property that generated rental income from shops, assessed under the head “Income from House Property” under Section 22. 2. Whether the Tribunal was correct in classifying the subject property as commercial, relying on property tax assessment and electricity connection, instead of considering the assessment under the Income Tax Act. 3. Whether, in the absence of a definition for “residential property,” the Tribunal should have upheld the appellant's entitlement to exemption under Section 54F, referencing a Board's circular dated 28.06.1973. The assessee argued that they had availed the benefit of the Direct Tax Vivad Se Vishwas Act, 2020, by filing the requisite forms, which were accepted, rendering the appeal's substantial questions of law unnecessary to decide. The Revenue conceded this submission.

Which sections of the Income-tax Act were involved?

Section 54F,Section 22

AI-generated summary — verify with the full judgment below

Tax Case Appeal No.366 of 2020 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 11.11.2021 CORAM : THE HON'BLE MR. JUSTICE R. MAHADEVAN AND THE HON'BLE MR. JUSTICE MOHAMMED SHAFFIQ Tax Case Appeal No.366 of 2020 and CMP.No.11526 of 2020 A. Savarimuthu

... Appellant Vs.

The Income Tax Officer, Non-Corporate Ward 12(1), Chennai.

... Respondent

Tax Case Appeal filed under Section 260A of the Income Tax Act, 1961 against the order of the Income Tax Appellate Tribunal, 'C' Bench Chennai, dated 22.02.2018 passed in I.T.A.No.1531/Mds/2017. For Appellant : Mr. N. Quadir Hoseyn For Respondent : Mrs. V. Pushpa,

Standing Counsel

Page 1/5 https://www.mhc.tn.gov.in/judis Tax Case Appeal No.366 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 / assessee challenging the order dated 22.02.2018 passed by the Income Tax Appellate Tribunal, Bench 'C', Chennai ('the Tribunal', for brevity) in I.T.A.No.1531/Mds/2017 for the Assessment Year 2013-14. 2.The above appeal was admitted on 15.10.2010 on the following substantial questions of law: “1.Whether on the facts and in the circumstances of the case the Tribunal was right in denying exemption under Section 54F in respect of investment in a property yielding rental income from shops assessed under the head “Income from House Property” u/s.22? 2.Whether on the facts and in the circumstances of the case the Tribunal was right in holding, relying on property tax assessment and electricity connection under the head “Commercial” that the subject property was commercial instead of relying on assessment under the Income Tax Act? Page 2/5 https://www.mhc.tn.gov.in/judis Tax Case Appeal No.366 of 2020 3.Whether on the facts and in the circumstances of the case, in the absence of definition as to the term “residential property”, the tribunal ought to have upheld the appellant entitlement for exemption under section 54F in view of Board's circular dated 28.06.1973.” 3.When the matter was taken up for consideration, the learned counsel appearing for the appellant / assessee submitted that during the pendency of this tax case appeal, the assessee has filed the requisite Forms 1 and 2 under Section 4 (1) of the Direct Tax Vivad Se Vishwas Act, 2020, which were accepted and Form 3 was issued to the assessee on 21.04.2021 by the Income Tax Department. The learned counsel has also filed a memo dated 11.11.2021 to that effect. 4.The aforesaid submission made by the learned counsel for the appellant / assessee has also been fairly conceded by the learned standing counsel appearing for the respondent / Revenue. 5.This court heard the submissions made by the learned counsel on either side, as per which, the assessee has already availed the benefit Page 3/5 https://www.mhc.tn.gov.in/judis Tax Case Appeal No.366 of 2020 conferred under the beneficial legislation viz., the Direct Tax Vivad Se Vishwas Act, 2020, enacted for resolution of disputed tax and for matter connected therewith or incidental thereto, which came into force with effect from 17.03.2020; and the declarations submitted by the assessee were also accepted and Form 3 was also issued to them by the Income Tax Department. In view of such development, it is unnecessary for this court to decide the substantial questions of law arisen in this tax case appeal.

6.Therefore, recording the submissions so made by the learned counsel on either side, this appeal stands disposed of, directing the department to process the application in accordance with the Act and communicate the decision to the assessee at the earliest. No costs. Consequently, connected miscellaneous petition is closed. (R.M.D., J.) (M.S.Q., J.) 11.11.2021 msr

Internet : Yes

Index : Yes / No To 1.Income Tax Appellate Tribunal, Chennai "C" Bench, 2.The Income Tax Officer, Non-Corporate Ward 12(1), Chennai. Page 4/5 https://www.mhc.tn.gov.in/judis Tax Case Appeal No.366 of 2020 R. MAHADEVAN, J. and MOHAMMED SHAFFIQ, J. msr Tax Case Appeal No.366 of 2020

11.11.2021 Page 5/5 https://www.mhc.tn.gov.in/judis

More judgments on Section 54F

All 2,628 judgments and leading authorities on Section 54F →

Recent GST High Court judgments

Search GST case law →