J. SHANTHI (LATE) vs. THE ASSISTANT COMMISSIONER

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TCA/445/2021HC Madras02 September 2021Bench: Hon`ble Mr Justice T. S. SIVAGNANAM4 pages
AI SummaryWithdrawn

What did the High Court hold?

The High Court disposed of the Tax Case Appeal in light of the subsequent event of the assessee filing a declaration under the Vivad Se Vishwas Scheme, 2020. The Court directed the Competent Authority to process the declaration expeditiously and pass appropriate orders. The assessee was granted liberty to restore the appeal if the decision on the declaration was not in their favour. In such an event, the Registry was directed to entertain the restoration petition without insisting on a delay condonation application. Consequently, the substantial questions of law raised in the appeal were left undecided. No costs were awarded. The operative direction was to dispose of the appeal with liberty to restore.

What were the facts?

The assessee, Smt. J. Shanthi (late), represented by her legal heir Shri J. Balaji, filed an appeal under Section 260A of the Income Tax Act, 1961, challenging an order dated 13.11.2017 passed by the Income Tax Appellate Tribunal (ITAT), Chennai, 'C' Bench. The appeal pertains to the assessment year 2007-08. The dispute involves the tax treatment of additional compensation received by the assessee for foregoing farming rights over agricultural lands. The assessee had filed a declaration under the Vivad Se Vishwas Scheme on 27.1.2021 and was awaiting orders. The High Court noted this subsequent development in its proceedings.

What were the issues?

1. Whether, on the facts and circumstances of the case, the Appellate Tribunal, having held the lands to be 'agricultural lands', was correct in concluding that the extinguishment of farming rights over these lands tantamount to a 'commercial right'? (Question of law and fact, concerning the nature of rights extinguished). 2. Whether, on the facts and circumstances of the case, the Appellate Tribunal was right in law in holding that the additional compensation received by the Appellant for foregoing their 'farming rights' over agricultural land is to be treated as income under the head 'capital gains'? (Question of law, concerning the head of income under the Act). Assessee's Contention: The assessee submitted that a declaration had been filed under the Vivad Se Vishwas Scheme and orders were awaited. No specific arguments on the merits of the substantial questions of law were recorded as the appeal was disposed of based on the subsequent event. Revenue's Contention: The Revenue was represented, and notice was accepted. No specific arguments on the merits of the substantial questions of law were recorded as the appeal was disposed of based on the subsequent event.

Which sections of the Income-tax Act were involved?

Section 260A,Section 4

AI-generated summary — verify with the full judgment below

TCA.No.445 of 2021 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 02.9.2021 CORAM THE HONOURABLE MR.JUSTICE T.S.SIVAGNANAM and THE HONOURABLE MR.JUSTICE SATHI KUMAR SUKUMARA KURUP Tax Case Appeal No.445 of 2021 Smt.J.Shanthi (Late) represented by Legal Heir Shri J.Balaji ...Appellant Vs The Assistant Commissioner of Income Tax, Circle IX, Chennai. ...Respondent APPEAL under Section 260A of the Income Tax Act, 1961 against the order dated 13.11.2017 passed by the Income Tax Appellate Tribunal, 'C' Bench, Chennai made in I.T.A.No. 1377/Mds/2012 for the assessment year 2007-08. For Appellant : Mr.R.Sivaraman For Respondent : Mr.M.Swaminathan, SSC assisted by Ms.V.Pushpa, JSC Judgment was delivered by

T.S.SIVAGNANAM

This appeal has been filed by the assessee under Section 260A of 1/4 https://www.mhc.tn.gov.in/judis/ TCA.No.445 of 2021 the Income Tax Act, 1961 ('the Act' for brevity) challenging the order dated 13.11.2017 made in I.T.A.No.1377/Mds/2012 on the file of the Income Tax Appellate Tribunal, Chennai, 'C' Bench ('the Tribunal' for brevity) for the assessment year 2007-08. 2. The assessee has filed this appeal by raising the following substantial questions of law: “1. Whether on the facts and circumstances of the case, the Appellate Tribunal having held that the lands belonging to the Appellant are 'agricultural lands', that the extinguishment of farming rights over the said lands tantamount to a 'commercial right'? and 2. Whether on the facts and circumstances of the case, the Appellate Tribunal was right in law in holding that the additional compensation received by the Appellant for foregoing their 'farming rights' over agricultural land is to be treated as income under the head 'capital gains'?” 3. We have heard Mr.R.Sivaraman, learned counsel for the appellant/assessee and Mr.M.Swaminathan, learned Senior Standing Counsel assisted by Ms.V.Pushpa, learned Junior Standing Counsel accepting notice for the respondent/Revenue. 2/4 https://www.mhc.tn.gov.in/judis/ TCA.No.445 of 2021 4. The learned counsel appearing for the assessee submits that the assessee already filed the declaration/undertaking under the Vivad Se Vishwas Scheme on 27.1.2021 and is awaiting orders to be passed in Form No.3. 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. Consequently, the substantial questions of law raised are left open. No costs. 02.9.2021 3/4 https://www.mhc.tn.gov.in/judis/ TCA.No.445 of 2021 T.S.SIVAGNANAM,J AND SATHI KUMAR SUKUMARA KURUP,J mka To 1.The Income Tax Appellate Tribunal, 'C' Bench, Chennai. 2.The Assistant Commissioner of Income Tax, Circle IX, Chennai TCA.No.445 of 2021 02.9.2021 4/4 https://www.mhc.tn.gov.in/judis/

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