PRINCIPAL COMMISSIONER OF IN vs. RPD EARTH MOVERS PVT LTD.,

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TCA/503/2019HC Madras25 January 2021Bench: Hon`ble Mr Justice T. S. SIVAGNANAM6 pages
AI SummaryRemanded

What did the High Court hold?

The High Court noted that the assessee had filed a declaration under the Vivad Se Vishwas Scheme on 01.12.2020 and was awaiting orders. In light of this subsequent event, the Court directed the Competent Authority to process the declaration under the Direct Tax Vivad Se Vishwas Act, 2020, and pass appropriate orders expeditiously. The assessees were granted liberty to restore the appeals if the decision on their declaration was not in their favour. Consequently, the substantial questions of law framed for the appeals were left undecided. The appeals were disposed of with the aforementioned liberty, and no costs were imposed.

What were the facts?

These appeals were filed by the Revenue against the orders of the Income Tax Appellate Tribunal (ITAT) for the assessment year 2011-12. The ITAT had ruled in favour of the assessee, M/s. RPD Earth Movers Pvt Ltd. The Revenue challenged these orders, raising substantial questions of law concerning the initiation of proceedings under Section 153A of the Income Tax Act, 1961, in the absence of incriminating material found during a search, and the validity of accepting an audited tally statement filed with an e-filed return. The appeals were admitted on specific substantial questions of law. However, during the pendency of these appeals, the assessee filed a declaration under the Vivad Se Vishwas Scheme.

What were the issues?

The Tribunal had to decide the following substantial questions of law: 1. Whether, in the absence of incriminating material found during a search under Section 132, proceedings under Section 153A of the Income Tax Act, 1961, can be initiated. 2. Whether the Tribunal was justified in accepting the assessee's contention that an audited tally statement, forming the basis of the search assessment, was filed with the return of income for assessment year 2011-12, considering that the return was e-filed and envisaged an annexureless format. 3. Whether the Tribunal was correct in relying on the dismissal of a Special Leave Petition (SLP) in the case of PCIT Vs. Meeta Gutgutia when the issue of jurisdiction under Section 153A was not before the Supreme Court. 4. Whether the Tribunal was justified in deciding the issue based on an SLP dismissal simpliciter, disregarding the ratio that such dismissals have no binding effect, as laid down in CIT Vs. Geetha Ramakrishna Mills (P) Ltd. and Kunhayammed Vs. State of Kerala. Assessee's Contention: The assessee submitted that they had filed a declaration under the Vivad Se Vishwas Scheme on 01.12.2020 and were awaiting orders. Revenue's Contention: The Revenue argued against the ITAT's findings on the initiation of Section 153A proceedings and the acceptance of the audited tally statement.

Which sections of the Income-tax Act were involved?

Section 260A,Section 153A,Section 132

AI-generated summary — verify with the full judgment below

TCA.Nos.503, 505, 507, 512 to 515 of 2019 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 25.01.2021 CORAM : The Honourable Mr.Justice T.S.SIVAGNANAM and The Honourable Ms.Justice R.N.MANJULA Tax Case Appeal Nos.503, 505, 507 & 512 to 515 of 2019 T.C.A.No.503 of 2019 Principal Commissioner of Income Tax Central 2, No.108, Mahatma Gandhi Road, Chennai - 600 034. ...Appellant Vs M/s.RPD Earth Movers Pvt Ltd., No.1379, "Golden Villa", 1st Block, 6th Street, 18th Main Road, Vallalar Kudiyeruppu, Anna Nagar West, Chennai - 600 040. PAN: AAD CR 6604 B ...Respondent COMMON PRAYER: Appeals under Section 260A of the Income Tax Act, 1961 against the orders dated 03.12.2018 made in ITA.Nos.1606 to 1612/Chny/2018 on the file of the Income Tax Appellate Tribunal, Madras 'B' Bench, for the assessment year 2011-12. 1/6 https://www.mhc.tn.gov.in/judis/ TCA.Nos.503, 505, 507, 512 to 515 of 2019 For Appellant: Mr.T.R.Senthil Kumar (in all cases) Senior Standing Counsel For Respondents: Mr.R.Murali (in all cases) COMMON JUDGMENT (Delivered by

T.S.Sivagnanam,J

) These appeals have been filed by the Revenue under Section 260A of the Income Tax Act, 1961 ('the Act' for brevity) challenging the orders dated 03.12.2018 made in ITA.Nos.1606 to 1612/Chny/2018 on the file of the Income Tax Appellate Tribunal, Madras 'B' Bench, ('the Tribunal' for brevity) for the assessment year 2011-12. 2. The appeals were admitted on 26.07.2019 on the following substantial questions of law: "i. Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the Assessing Officer cannot initiate proceedings under Section 153A of the Income Tax Act where there was no incriminating material found during the course of search operation under Section 132 of the Act? ii. Whether, on the facts and in the 2/6 https://www.mhc.tn.gov.in/judis/ TCA.Nos.503, 505, 507, 512 to 515 of 2019 circumstances of the case, the Tribunal was justified in accepting the stand of the assessee that the audited tally statement, found during search and which formed the basis of search assessment, was filed along with the return of income for the assessment year 2011-12 without appreciating that the said return of income was e-filed and for that assessment year, annexureless return was only envisaged? iii. Whether, on the facts and in the circumstances of the case, the Tribunal was correct in law in placing reliance on SLP dismissal simplicitor in the case of PCIT Vs. Meeta Gutgutia [reported in 96 Taxmann.com 468] when the issue of jurisdiction under Section 153A of the Income Tax Act was not at all before the Hon'ble Supreme Court in the said special leave petition? and iv. Whether, on the facts and circumstances of the case, the Appellate Tribunal was justified in deciding the impugned issue on the basis of SLP (special leave petition) dismissal simplicitor by the Hon'ble Supreme Court in the case of PCIT Vs. Meeta Gutgutia [reported in 96 Taxmann.com 468] without taking cognizance of the well settled 3/6 https://www.mhc.tn.gov.in/judis/ TCA.Nos.503, 505, 507, 512 to 515 of 2019 ratio that SLP dismissal simplicitor has no binding effect as laid down in the cases of CIT Vs. Geetha Ramakrishna Mills (P) Ltd. [reported in 288 ITR 489 (Madras)] and Kunhayammed Vs. State of Kerala [reported in 245 ITR 360 (SC)]?" 3. We have heard Mr.T.R.Senthil Kumar, learned Senior Standing Counsel appearing for the appellant/Revenue and Mr.R.Murali, learned counsel appearing for the respondents/assessees. 4. The learned counsel for the respondents/assessees submit that the assessees have already filed the declaration/undertaking under the Vivad Se Vishwas Scheme on 01.12.2020 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 applications/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 assessees are given liberty to restore these appeals in the event the ultimate decision to be taken on the declaration 4/6 https://www.mhc.tn.gov.in/judis/ TCA.Nos.503, 505, 507, 512 to 515 of 2019 filed by the assessee under Section 4 of the said Act is not in favour of the assessees. 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 appeals and on such request made by the assessees by filing a miscellaneous petition for restoration, the Registry shall place such petition before the appropriate Division Bench for orders. 6. The tax case appeals stand 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.) 25.01.2021 Index: Yes/No Internet:Yes/No Speaking Judgment/Non speaking Judgment hvk To 1. The Income Tax Appellate Tribunal, Madras 'B' Bench. 2. Principal Commissioner of Income Tax Central 2, No.108, Mahatma Gandhi Road, Chennai - 600 034. 5/6 https://www.mhc.tn.gov.in/judis/ TCA.Nos.503, 505, 507, 512 to 515 of 2019 T.S.SIVAGNANAM,J AND R.N.MANJULA,J hvk TCA.Nos.503, 505, 507 & 512 to 515 of 2019 25.01.2021 6/6 https://www.mhc.tn.gov.in/judis/

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