COMMISSIONER OF INCOME TAX vs. SHRI HABIB ABDUL LATIF

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TCA/484/2019HC Madras07 December 2020Bench: Hon`ble Mr.Justice T.S.SIVAGNANAM4 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 on August 13, 2020, and was awaiting orders. In light of this subsequent event, the Court directed the Competent Authority to process the application/declaration under the Direct Tax Vivad Se Vishwas Act, 2020, and pass appropriate orders expeditiously. The assessee was granted liberty to restore the appeal if the decision on the declaration was not in their favour. Consequently, the substantial questions of law were left undecided. The appeal was disposed of with this liberty, and no costs were awarded.

What were the facts?

The Revenue, represented by the Commissioner of Income Tax, Non Corporate Circle-10, Chennai, filed an appeal under Section 260A of the Income Tax Act, 1961, against an order dated February 25, 2019, passed by the Income Tax Appellate Tribunal (ITAT), Chennai 'B' Bench. The appeal pertains to assessment year 2014-15. The core of the dispute involves the genuineness of expenses claimed by the assessee, Shri Habib Abdul Latif. The ITAT had allowed the expenditure, which the Revenue is challenging. The High Court admitted the appeal on substantial questions of law.

What were the issues?

1. Whether, on the facts and in the circumstances of the case and in law, the Income Tax Appellate Tribunal was right in allowing the expenditure when the assessee has not proved the genuineness of the expenses before any of the lower authorities? (Question of law and fact, concerning the onus of proof for expenditure). 2. Whether, on the facts and in the circumstances of the case and in law, the Income Tax Appellate Tribunal erred in allowing the appeal of the assessee when the onus was on the assessee to prove beyond doubt that the expenses claimed was genuine? (Question of law and fact, concerning the burden of proof for claimed expenses). Assessee's Contention: The assessee's counsel submitted that the assessee had filed a declaration/undertaking under the Vivad Se Vishwas Scheme on August 13, 2020, and was awaiting orders. The assessee relied on the Direct Tax Vivad Se Vishwas Act, 2020. Revenue's Contention: The Revenue argued that the ITAT erred in allowing the expenditure without the assessee proving its genuineness and that the onus was on the assessee to prove the expenses beyond doubt.

Which sections of the Income-tax Act were involved?

Section 260A,Section 4

AI-generated summary — verify with the full judgment below

TCA.No.484 of 2019 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 07.12.2020 CORAM THE HONOURABLE MR.JUSTICE T.S.SIVAGNANAM and THE HONOURABLE MRS.JUSTICE V.BHAVANI SUBBAROYAN Tax Case Appeal No.484 of 2019

The Commissioner of Income Tax, Non Corporate Circle-10, Chennai. ...Appellant Vs Shri Habib Abdul Latif ...Respondent APPEAL under Section 260A of the Income Tax Act, 1961 against the order dated 25.2.2019 passed by the Income Tax Appellate Tribunal, Madras 'B' Bench, Chennai made in I.T.A.No.3207/Chny/2017 for the assessment year 2014-15. For Appellant: Mr.M.Swaminathan, SSC assisted by Mrs.V.Pushpa, SC For Respondent: Mr.G.Baskar Judgment was delivered by

T.S.SIVAGNANAM

This appeal has been filed by the Revenue under Section 260A of the Income Tax Act, 1961 ('the Act' for brevity) challenging the order 1/4 http://www.judis.nic.in TCA.No.484 of 2019 dated 25.2.2019 made in I.T.A.No.3207/Chny/2017 on the file of the Income Tax Appellate Tribunal, Chennai, 'B' Bench ('the Tribunal' for brevity) for the assessment year 2014-15. 2. The above appeal was admitted on 19.7.2019 on the following substantial questions of law : “i. Whether, on the facs and in the circumstances of the case and in law, the Income Tax Appellate Tribunal was right in allowing the expenditure when the assessee has not proved the genuineness of the expenses before any of the lower authorities ? and ii. Whether, on the facts and in the circumstances of the case and in law, the Income Tax Appellate Tribunal erred in allowing the appeal of the assessee when the onus was on the assessee to prove beyond doubt that the expenses claimed was genuine?” 3. We have heard Mr.M.Swaminathan, learned Senior Standing Counsel assisted by Mrs.V.Pushpa, learned Standing Counsel appearing for the appellant/Revenue and Mr.G.Baskar, learned counsel appearing for the respondent/assessee. 4. The learned counsel on behalf of the respondent/assessee 2/4 http://www.judis.nic.in TCA.No.484 of 2019 submits that the assessee already filed the declaration/undertaking under the Vivad Se Vishwas Scheme on 13.8.2020 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 to be 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 are left open. No costs. 07.12.2020 3/4 http://www.judis.nic.in TCA.No.484 of 2019 T.S.SIVAGNANAM,J AND V.BHAVANI SUBBAROYAN,J RS

To The Income Tax Appellate Tribunal, 'B' Bench, Chennai. TCA.No.484 of 2019 07.12.2020 4/4 http://www.judis.nic.in

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