SHRI DURGA DAS VYAS NAROTTAM vs. COMMISSIONERT OF INCOME TAX 8

TCA Nos.640, 644, 649 to 652 of 2019 and 424 and 425 of 2020 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 07.03.2022 CORAM THE HONOURABLE MR. JUSTICE R. MAHADEVAN AND THE HONOURABLE MR. JUSTICE J.SATHYA NARAYANA PRASAD Tax Case Appeal Nos.640, 644 and 649 to 652 of 2019 & 424 and 425 of 2020 and CMP.Nos.18735, 18790, 18810, 18869 and 18980 of 2019 & 13377 of 2020 TCA Nos. 640, 644 and 649 to 652 of 2019 Shri Durga Das Vyas Narottam Agencies 13, Errabalu Street Chennai – 600 001 .. Appellant in all Cases Versus Commissioner of Income Tax 8 Chennai .. Respondent in all Cases TCA Nos. 424 & 425 of 2020 Shri D Srinivasa Vyas 13, Errabalu Street Chennai – 600 001 .. Appellant in both Cases Versus Commissioner of Income Tax 8 Chennai .. Respondent in both Cases 1/7 https://www.mhc.tn.gov.in/judis TCA Nos.640, 644, 649 to 652 of 2019 and 424 and 425 of 2020 common prayer: Tax Case Appeals filed under Section 260A of the Income Tax Act, 1961 against the common order dated 23.03.2017 passed by the Income Tax Appellate Tribunal, Madras “D” Bench, in respective I.T.A.Nos.869, 868, 871, 867, 872 and 870/Mds/2014 & 874 and 873/Mds/2014. For Appellant : Mr.N.V.Balaji (in all cases) For Respondent : Mr. M.Swaminathan Senior Standing Counsel (in all cases) COMMON JUDGMENT (Judgment of the court was delivered by R. MAHADEVAN, J.) Since the issues involved in all these appeals are inter-connected and inter-twined, they were clubbed together and are disposed of by this common judgment. 2.These tax case appeals have been filed by the appellants / assessees, calling in question the correctness of the common order dated 23.03.2017 passed by the Income Tax Appellate Tribunal, 'D' Bench, Chennai, in I.T.A.Nos.867 to 872/Mds/2014 for the assessment years 1998-1999 to 2003-04 and in I.T.A.Nos.873 & 874/Mds/2014, for the assessment years 2001-02 & 2002-03 by raising the following substantial questions of law:- 2/7 https://www.mhc.tn.gov.in/judis TCA Nos.640, 644, 649 to 652 of 2019 and 424 and 425 of 2020 “(i) Whether under the facts and circumstances of case, is the order of the assessing officer levying penalty not time barred? (ii) Whether under the facts and circumstances of the case, the Income Tax Appellate Tribunal was right in remitting the matter back to the assessing officer to examine the issue of levy of penalty and examine afresh in accordance with law? (iii) Whether under the facts and circumstances of the case, the assessing officer was right in levying penalty under Section 271(1)(C), even after giving a finding that the appellant did not render any service in respect of receipt of purported commission?” Brief Facts

: 3.1. The assessees are engaged in the commission agency business and offered receipts from M/s.Siemens Limited and few others as commission receipts and claimed deduction in respect of payments made by them to third parties as commission. While so, the premises of the appellants were inspected by the Enforcement Wing Officers on 29.12.2003, during the course of which, it was revealed that no services were rendered by the appellants for the receipts and the claim of sub commission to the third parties was bogus. Pursuant to the same, the assessing officer reopened the assessments and completed the same under section 143(3) r/w section 147 of the Income Tax Act, 1961, for the assessment years in question. Since M/s.Siemens Limited had surrendered the claim for 3/7 https://www.mhc.tn.gov.in/judis TCA Nos.640, 644, 649 to 652 of 2019 and 424 and 425 of 2020 expenditure for payments made to the appellants and offered the same to tax in its application before the settlement commission, Mumbai, the assessing officer assessed the receipts on protective basis. On admitting the case of M/s.Siemens by the settlement commission, the appellants filed petitions under section 154 to rectify the assessments for the disputed assessment years and the same were rejected by the assessing officer and passed the assessment orders on 06.03.2006. Challenging the same, the assessees went on appeals before the CIT (Appeals), who ordered the said applications in favour of the assessees. Aggrieved against the said order, the Revenue preferred appeals before the ITAT, Chennai. Upon hearing both sides, the Tribunal quashed the order of the CIT (Appeals) and restored the revised assessment orders. As against the order of the Tribunal, the assessees went on further appeal before this court in TCA Nos.167 to 174/2012, which ended in dismissal on 08.03.2016. The said order was put to challenge by the appellants before the Hon'ble Supreme Court. However, the appellants withdrew the said appeals with liberty to file Review petition before this court. Accordingly, the appellants filed review petitions before this court and the same are pending. 3.2. In the mean while, pursuant to the order of the Tribunal, the assessing officer initiated penalty proceedings against the appellants under 4/7 https://www.mhc.tn.gov.in/judis TCA Nos.640, 644, 649 to 652 of 2019 and 424 and 425 of 2020 Section 271(1)(c) of the Act and passed orders on 29.06.2012, against which, the appellants filed appeals before the CIT (Appeals), who dismissed the same by confirming the penalty levied by the assessing officer, Challenging the same, the appellants went on further appeals in ITA Nos.867 to 872/Mds/2014 & 873 and 874/Mds/2014 before the ITAT, Chennai. By order dated 23.03.2017, which are impugned in these tax case appeals, the Tribunal allowed the appeals by remanding the issue to the file of the Assessing Officer and directing him to decide the levy of penalty afresh in accordance with law, after giving adequate opportunity of hearing to the appellants. Aggrieved by the same, the appellants / assessees preferred the present appeals before this court. 4.Today, when the matters were taken up for consideration, the learned senior standing counsel appearing for the respondent submitted that as directed by the ITAT in the orders impugned herein, the assessing officer examined the penalty issue afresh and confirmed the same as also affirmed by the CIT(A); and the appellants are now, before the ITAT by filing the second round of appeals in ITA Nos.2691 to 2698/Chny/2018. Stating so, the learned senior standing counsel submitted that nothing survives for adjudication in these tax case appeals. 5/7 https://www.mhc.tn.gov.in/judis TCA Nos.640, 644, 649 to 652 of 2019 and 424 and 425 of 2020 5.The aforesaid submissions made on the side of the respondent have been fairly conceded by the learned counsel for the appellant. The learned counsel further submitted that the appellant in TCA Nos.640, 644 and 649 to 652 of 2019 by name, Shri Durga Das Vyas is no more. 6.In view of the above stated subsequent development, these tax case appeals are dismissed as having become infructuous, leaving the substantial questions of law open for consideration in appropriate cases. The appellants / Legal heir(s) of the deceased appellant are at liberty to file appropriate applications and raise all the contentions including limitation issue in the proceedings pending before the ITAT, Chennai. No costs. Consequently, connected miscellaneous petitions are closed. [R.M.D, J.] [J.S.N.P, J.] 07.03.2022 Internet : Yes

Index : Yes / No dhk To 1. Commissioner of Income Tax 8 Chennai 2. The Income Tax Appellate Tribunal, Madras “D” Bench. 3. The Commissioner of Income-tax (Appeals), Chennai. 6/7 https://www.mhc.tn.gov.in/judis TCA Nos.640, 644, 649 to 652 of 2019 and 424 and 425 of 2020 R. MAHADEVAN, J. and J.SATHYA NARAYANA PRASAD, J. dhk T.C.A. Nos.640, 644 and 649 to 652 of 2019 & 424 and 425 of 2020 07.03.2022 7/7 https://www.mhc.tn.gov.in/judis