SHRI S.ELANGO vs. THE DEPUTY COMMISSIONER OF

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TCA/463/2017HC Madras30 April 2021Bench: Hon`ble Mr Justice M.DURAISWAMY5 pages
AI SummaryWithdrawn

What did the High Court hold?

The High Court did not decide the substantial questions of law framed for consideration. This was due to subsequent developments, specifically the enactment of the Direct Tax Vivad Se Vishwas Act, 2020. The Court was informed by the assessee's counsel that the assessee had been issued Form-3 under this Act and sought permission to withdraw the appeal. Consequently, the High Court dismissed the Tax Case Appeal as withdrawn. No finding was reached on the merits of the penalty levied under Section 271(1)(c) or the interpretation of the relevant provisions of the Income Tax Act.

What were the facts?

The assessee, Shri S. Elango, filed an appeal under Section 260A of the Income Tax Act, 1961, against the order of the Income Tax Appellate Tribunal (ITAT) dated 23.11.2016. The appeal pertained to assessment year 2006-07 and challenged the levy of penalty under Section 271(1)(c) of the Act. The ITAT had sustained the penalty. The High Court was informed that the assessee had been issued Form-3 under the Direct Tax Vivad Se Vishwas Act, 2020, and sought permission to withdraw the appeal.

What were the issues?

1. Whether the Appellate Tribunal is correct in law in sustaining the levy of penalty under Section 271(1)(c) of the Act despite the surrender of additional income in the course of a search, as reflected in the sworn statement under Section 132(4) of the Act? 2. Whether the Appellate Tribunal is correct in law in sustaining the levy of penalty under Section 271(1)(c) of the Act based on its interpretation of proviso (2) to explanation (5) below Section 271(1)(c) of the Act, which the appellant contends defeats the purposive legislation? Assessee's Contention: The assessee argued that the penalty under Section 271(1)(c) should not have been sustained, particularly in light of the surrender of income during a search and the subsequent provisions of the Direct Tax Vivad Se Vishwas Act, 2020. The assessee also contended that the Tribunal's interpretation of the proviso to explanation (5) to Section 271(1)(c) was incorrect and defeated the legislative intent. Revenue's Contention: The judgment does not record specific arguments from the Revenue regarding the substantial questions of law.

Which sections of the Income-tax Act were involved?

Section 260A,Section 271(1)(c),Section 132(4)

AI-generated summary — verify with the full judgment below

Tax Case Appeal No.463 of 2017 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 30.04.2021 CORAM THE HON'BLE MR.JUSTICE M. DURAISWAMY AND THE HON'BLE MRS.JUSTICE R. HEMALATHA Tax Case Appeal No.463 of 2017 Shri S.Elango Sea Castle, No.46/20, North Crescent Road, T.Nagar, Chennai – 600 017.

... Appellant Vs.

The Deputy Commissioner of Income Tax, Central Circle-III (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, Madras "D" Bench, dated 23.11.2016 passed in I.T.A.No.2128/Mds/2013. For Appellant : Mr.M.Kaushik for Mr.S.Sridhar For Respondent : Mr.T.R.Senthil Kumar

Senior Standing Counsel and Mrs.K.G.Usha Rani Standing Counsel Page 1/5 https://www.mhc.tn.gov.in/judis/ Tax Case Appeal No.463 of 2017 J U D G M E N T (Delivered by M.DURAISWAMY, J.) This appeal filed by the assessee under Section 260A of the Income Tax Act, 1961 ('the Act' for brevity), is directed against the order dated 23.11.2016 passed by the Income Tax Appellate Tribunal, Madras "D" Bench, ('the Tribunal' for brevity) in I.T.A.No.2128/Mds/2013 for the assessment year 2006-07. The appellant/assessee has raised the following Substantial Questions of Law in the above appeal: "1.Whether the Appellate Tribunal is correct in law in sustaining the levy of penalty u/s.271(1)(c) of the Act despite the surrender of additional income on which the penalty was imposed in the course of the search as reflected in the recording of sworn statement u/s.132(4) of the Act? 2.Whether the Appellate Tribunal is correct in law in sustaining the levy of penalty u/s.271(1)(c) of the Act on the interpretation of proviso (2) to explanation (5) below the section 271(1)(c) of the Act which according to the appellant would defeat the purposive legislation?” Page 2/5 https://www.mhc.tn.gov.in/judis/ Tax Case Appeal No.463 of 2017 2. We have heard Mr.M.Kaushik for Mr.S.Sridhar, learned counsel for the appellant/assessee and Mr.T.R.Senthil Kumar, learned Senior Standing Counsel and Mrs.K.G.Usha Rani, learned Standing Counsel for the respondent/Revenue. 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. We are informed by the learned counsel for the appellant/ assessee that the assessee had already been issued with Form-3 on 11.02.2021 and the learned counsel for the appellant seeks permission of this Court to withdraw the appeal. Page 3/5 https://www.mhc.tn.gov.in/judis/ Tax Case Appeal No.463 of 2017 5. In view of the submission made by the learned counsel for the appellant, the Tax Case Appeal stands dismissed as withdrawn. No costs. [M.D., J.] [R.H., J.] 30.04.2021

Index : Yes/No

Internet : Yes

mkn To 1. Income Tax Appellate Tribunal, Madras "D" Bench 2.The Deputy Commissioner of Income Tax, Central Circle-III (1), Chennai. Page 4/5 https://www.mhc.tn.gov.in/judis/ Tax Case Appeal No.463 of 2017 M. DURAISWAMY, J. and R. HEMALATHA, J. mkn Tax Case Appeal No.463 of 2017

30.04.2021 Page 5/5 https://www.mhc.tn.gov.in/judis/

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