PRINCIPAL COMMISSIONER OF IN vs. SRI MOHAN KUMAR AGARWAL

TCA/4/2021HC Madras08 January 2021Bench: Hon`ble Mr Justice T. S. SIVAGNANAM6 pages

AI SummaryWithdrawn

What did the High Court hold?

The High Court noted that the assessee had filed a declaration under the Vivad Se Vishwas Scheme, 2020. Consequently, the Court directed the Competent Authority to process the declaration and pass appropriate orders expeditiously. The Tax Case Appeal was disposed of with liberty granted to the assessee to restore the appeal if the decision on their declaration under the Vivad Se Vishwas Act is not in their favour. In such an event, the Registry was directed to entertain the restoration petition without insisting on a condonation of delay application. The substantial questions of law were left open, and no costs were imposed. The judgment did not decide the merits of the substantial questions of law.

What were the facts?

The Revenue, represented by the Principal Commissioner of Income Tax, filed an appeal before the High Court of Judicature at Madras challenging an order dated 16.12.2019 passed by the Income Tax Appellate Tribunal (ITAT), Madras 'D' Bench. The appeal pertains to the assessment year 2014-15. The ITAT's order had set aside the Assessing Officer's order and remitted the issue back to the Assessing Officer for re-examination. The assessee, M/s. Sri Mohan Kumar Agarwal, was represented by counsel. During the proceedings, the assessee's counsel informed the court that the assessee had filed a declaration under the Vivad Se Vishwas Scheme and was awaiting orders.

What were the issues?

The substantial questions of law before the High Court were: 1. Whether the ITAT was justified in setting aside the Assessing Officer's order for re-examination when the Assessing Officer had already duly examined the matter. 2. Whether the ITAT was justified in not dismissing the assessee's appeal, unlike other benches of the ITAT in similar cases (Smt. Rekha Jain and Harish Kumar HUF). 3. Whether the ITAT was justified in remitting the issue back to the Assessing Officer, shifting the onus to the Revenue to bring on record the assessee's role in promoting the company, relationship with promoters, and role in inflating share prices. The Revenue argued that the ITAT erred in setting aside the Assessing Officer's order and remitting the matter. The Revenue also contended that the ITAT should have followed precedents from other benches in similar cases. The Assessee's counsel stated that the assessee had opted for the Vivad Se Vishwas Scheme.

Which sections of the Income-tax Act were involved?

Section 260A

AI-generated summary — verify with the full judgment below

TCA.No.4 of 2021 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 08.01.2021 CORAM : The Honourable Mr.Justice T.S.SIVAGNANAM and The Honourable Ms.Justice R.N.MANJULA Tax Case Appeal No.4 of 2021 Principal Commissioner of Income Tax, Non-Corporate Ward-9(2), Nungambakkam, Chennai - 600 034. ...Appellant Vs M/s.Sri Mohan Kumar Agarwal, No.3, Menod Street, Purasawalkam, Chennai - 600 007. PAN: ACYPA6971A ...Respondent APPEAL under Section 260A of the Income Tax Act, 1961 against the order dated 16.12.2019 made in ITA.No.1666/CHNY/2018 on the file of the Income Tax Appellate Tribunal, Madras 'D' Bench for the assessment year 2014-15. For Appellant: Mr.R.Karthik Ranganathan Senior Standing Counsel For Respondent: Mr.Ashok Pathy for M/s.Pass Associates 1/6 https://www.mhc.tn.gov.in/judis/ TCA.No.4 of 2021 JUDGMENT (Delivered by

T.S.Sivagnanam,J

) This appeal has been filed by the Revenue under Section 260A of the Income Tax Act, 1961 ('the Act' for brevity) challenging the order dated 16.12.2019 made in ITA.No.1666/CHNY/2018 on the file of the Income Tax Appellate Tribunal, Madras 'D' Bench ('the Tribunal' for brevity) for the assessment year 2014-15. 2. The assessee has raised the following substantial questions of law for consideration: “1. Whether on the facts and circumstances of the case and in law, the Hon'ble Tribunal was right and justified in setting aside the order passed by the Assessing Officer to re-examine the matter when the Assessing Officer has already duly examined the matter before passing the assessment order? 2. Whether on the facts and circumstances of the case and in law, the Hon'ble ITAT was right and justified in not dismissing the appeal of the assessee as done by the ITAT "A" Bench, Chennai in ITA.No.827/Chny/2019 dt. 11.06.2019 in the 2/6 https://www.mhc.tn.gov.in/judis/ TCA.No.4 of 2021 case of Smt.Rekha Jain, and by ITAT"C" Bench, Chennai in ITA.No.3009/Chny/2018 in the case of Harish Kumar HUF, when the facts and circumstances of those cases are exactly similar to the present case? 3. Whether on the facts and circumstances of the case and in law, the Hon'ble ITAT was right and justified in remitting the issue back to the file of 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 prices of shares etc.?" 3. We have heard Mr.Karthik Ranganathan, learned Senior Standing Counsel appearing for the appellant/Revenue. Mr.Ashok Pathy for M/s.Pass Associates takes notice on behalf of the respondent. 4. The learned counsel for the respondent/assessee submits that the assessee has already filed the declaration/undertaking under the Vivad Se Vishwas Scheme and is awaiting orders to be passed in Form No.3. 3/6 https://www.mhc.tn.gov.in/judis/ TCA.No.4 of 2021 5. In the light of the subsequent event, the Competent Authority shall process the application/declaration in accordance with the Direct Tax Vivad Se Vishwas Act, 2020 (Act 3 of 2020) and pass appropriate orders as expeditiously as possible. 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 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 appropriate Division Bench for orders. 6. The tax case appeal stands disposed of with the aforementioned liberty and consequently, the substantial questions of law framed are left open. No costs. (T.S.S.,J.) (R.N.M.,J.) 08.01.2021 Index: Yes/No Internet:Yes/No Speaking Judgment/Non speaking Judgment hvk 4/6 https://www.mhc.tn.gov.in/judis/ TCA.No.4 of 2021 To 1. The Income Tax Appellate Tribunal, Madras 'D' Bench. 2. Principal Commissioner of Income Tax, Non-Corporate Ward-9(2), Nungambakkam, Chennai - 600 034. 5/6 https://www.mhc.tn.gov.in/judis/ TCA.No.4 of 2021 T.S.SIVAGNANAM,J AND R.N.MANJULA,J hvk TCA.No.4 of 2021 08.01.2021 6/6 https://www.mhc.tn.gov.in/judis/

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