COMMISSIONER OF INCOME TAX vs. SHRI ARUN KUMAR AGARWAL

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TCA/390/2020HC Madras27 November 2020Bench: Hon`ble Mr Justice T. S. SIVAGNANAM6 pages
AI SummaryRemanded

What did the High Court hold?

The High Court noted that the appeal was admitted on substantial questions of law. However, it was informed by the assessee's counsel that the assessee had filed a declaration under the Direct Tax Vivad Se Vishwas Act, 2020, on August 16, 2020. In light of this subsequent development, the Court found no useful purpose in keeping the appeal pending. The Tax Case Appeal was disposed of on the ground that the assessee had availed the benefit under the Vivad Se Vishwas Act. The Court granted liberty to the assessee to restore the appeal if the decision under the Act was not in their favour. The substantial questions of law were left open. The operative direction was to dispose of the appeal with liberty to restore and process the application under the Act at the earliest.

What were the facts?

The Revenue, Commissioner of Income Tax, filed a Tax Case Appeal under Section 260-A of the Income Tax Act, 1961, against an order dated 31.01.2020 passed by the Income Tax Appellate Tribunal (ITAT) in I.T.A.No.2313/Chny/2019. The appeal pertained to Assessment Year 2011-12 and concerned the ITAT's decision to set aside the Assessing Officer's order and remit the issue back to the Assessing Officer for re-examination. The assessee is Shri Arun Kumar Agarwal. The High Court admitted the appeal on substantial questions of law.

What were the issues?

1. Whether the Income Tax Appellate Tribunal was right and justified in setting aside the order passed by the Assessing Officer to reexamine the matter when the Assessing Officer has already duly examined the matter before passing the assessment order? (Question of law) 2. Whether the Income Tax Appellate Tribunal was right and justified in remitting the issue back to the file of the Assessing Officer and shifting the onus to the Revenue with a direction that the Assessing Officer shall bring on record the role of the assessee in promoting the company and the relationship of the assessee, if any with the promoters, role of the assessee in inflating the price of shares, etc.? (Question of mixed law and fact) Assessee's Contentions: The assessee's counsel informed the court that the assessee had filed a declaration under Section 4 of the Direct Tax Vivad Se Vishwas Act, 2020, on 16.08.2020. Revenue's Contentions: The Revenue, through its Senior Standing Counsel, argued the substantial questions of law framed by the High Court.

Which sections of the Income-tax Act were involved?

Section 260-A,Section 4

AI-generated summary — verify with the full judgment below

T.C.A.No.390 of 2020 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 27.11.2020 CORAM THE HONOURABLE MR.JUSTICE T.S.SIVAGNANAM and THE HONOURABLE MR.JUSTICE R.PONGIAPPAN T.C.A.No.390 of 2020 Commissioner of Income Tax Non Corporate Ward 10(1) Chennai .. Appellant Versus Shri Arun Kumar Agarwal No.5B, Manonmani Ammal Road, Kilpauk, Chennai 600 010 PAN:AACPA 4524 D .. 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, Madras 'A' Bench, Chennai made in I.T.A.No.2313/Chny/2019 dated 31.01.2020 relating to the Assessment Year 2011-12. For Appellant : Mr.M.Swaminathan Senior Standing counsel

For Respondent : Mr.P.Hari 1/6 http://www.judis.nic.in T.C.A.No.390 of 2020 JUDGMENT [Order of the Court was made by

T.S.SIVAGNANAM

, J.]

This appeal has been filed by the Revenue under Section 260 A of the Income Tax Act, 1961 ('the Act' for brevity), is directed against the order dated 31.01.2020 passed by the Income Tax Appellate Tribunal, Madras 'A' Bench, Chennai ('the Tribunal' for brevity) in I.T.A.No.2313/Chny/2019 for the Assessment Year 2011-12. This appeal was admitted on 28.10.2020 on the following Substantial Questions of Law: “1.Whether the Income Tax Appellate Tribunal was right and justified in setting aside the order passed by the Assessing Officer to reexamine the matter when the Assessing Officer has already duly examined the matter before passing the assessment order? And 2. Whether the Income Tax Appellate Tribunal was right and justified in remitting the issue back to the file of the Assessing Officer and shifting the onus to the Revenue with a direction that the Assessing Officer shall bring on record the role of the assessee in promoting the company and the relationship of the assessee, if any with the promoters, role of the assessee in inflating the price of shares, etc.,?” 2. We have heard Mr.M.Swaminathan, learned Senior Standing 2/6 http://www.judis.nic.in T.C.A.No.390 of 2020 counsel for the appellant/Revenue and Mr.P.Hari, 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.

4.

In terms of the said Act, the assessee has been given an option to put an end to the tax disputes, which may be pending at different levels either before the First Appellate Authority or before the Tribunal or before the High Court or before the Hon'ble Supreme Court of India. Under Section 2(j) “disputed tax” has been defined. In terms of Section 3, where a declarant means a person, who files a declaration under Section 4 on or before the last date files a declaration to the designated authority in 3/6 http://www.judis.nic.in T.C.A.No.390 of 2020 accordance with the provisions of Section 4 in respect of tax arrears, then, notwithstanding anything contained in the Income Tax Act or any other law for the time being in force, the amount payable by the declarant shall be determined in terms of Section 3(a-c) thereunder. 5. The First Proviso to Section 3 states that in case, where an Appeal or Writ Petition or Special Leave Petition is filed by the Income Tax authority on any issue before the Appellate Forum, the amount payable shall be one-half of the amount in the table stipulated in Section 3 calculated on such issue, in such a manner as may be prescribed. The second proviso deals with the cases, where the matter is before the Commissioner (Appeals) or before the Dispute Resolution Panel. The third proviso deals with cases, where the issue is pending before the Income Tax Appellate Tribunal. The filing of the declaration is as per Section 4 of the Act and the particulars to be furnished are also mentioned in the Sub Sections of Section 4. Section 5 of the Act deals with the time and manner of the payment and Section 6 deals with Immunity from initiation of proceedings in respect of offence and imposition of penalty in certain cases. Section 9 of the Act deals with cases, 4/6 http://www.judis.nic.in T.C.A.No.390 of 2020 where the Act 3 of 2020 will not be applicable. 6. We are informed by the learned counsel for the respondent/assessee that the assessee has already filed the declaration under Section 4 of the Act on 16.08.2020. 7. In the light of the fact that the assessee has already availed the benefit under the Act, no useful purpose would be served in keeping this appeal pending. At the same time, safeguarding the interest of the assessee in the event the order to be passed by the Department under the Act is not in favour of the assessee. Accordingly, the Tax Case Appeal stands disposed of on the ground that the assessee has already filed a declaration and the Department shall process the application at the earliest in accordance with the said Act and communicate the decision to the assessee at the earliest. As observed, the assessee is given liberty to restore this appeal in the event the ultimate decision to be taken on the declaration filed by the assessee under Section 4 of the said Act is not in favour of the assessee. If such a prayer is T.S.SIVAGNANAM, J. AND 5/6 http://www.judis.nic.in T.C.A.No.390 of 2020 R.PONGIAPPAN, J. Kak made, the Registry shall entertain the prayer without insisting upon any application to be filed for condonation of delay in restoration of the appeal and on such request made by the assessee by filing a Miscellaneous Petition for Restoration, the Registry shall place such petition before the Division Bench for orders. 8. With this observation, the Tax Case Appeal stands disposed of with the aforementioned liberty and Consequently, the Substantial Questions of Law are left open. No costs. (T.S.S.,J) (R.P.A.,J) 27.11.2020 Kak Index: Yes / No Internet: Yes / No Speaking Order/Non-Speaking Order To The Income Tax Appellate Tribunal, 'A' Bench, Chennai. T.C.A.No.390 of 2020 6/6 http://www.judis.nic.in

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