SHRI.N.RAJASEKARAN vs. THE INCOME TAX OFFICER

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TCA/731/2017HC Madras04 February 2021Bench: Hon`ble Mr Justice M.DURAISWAMY6 pages
AI SummaryRemanded

What did the High Court hold?

The High Court noted that the substantial questions of law did not require a decision due to subsequent developments. The enactment of the Direct Tax Vivad Se Vishwas Act, 2020, provided a mechanism for resolving disputed tax. The assessee had availed this benefit by filing Form-1. Consequently, the Court found no useful purpose in keeping the appeal pending. The Tax Case Appeal was disposed of on the ground that the assessee had filed the requisite form. The Department was directed to process the application under the Vivad Se Vishwas Act at the earliest. The assessee was granted liberty to restore the appeal if the decision under the Vivad Se Vishwas Act was not in their favour. The substantial questions of law were left undecided.

What were the facts?

The assessee, N. Rajasekaran, filed an appeal before the High Court of Judicature at Madras against the order of the Income Tax Appellate Tribunal, Chennai, dated May 31, 2017. This order pertained to the assessment year 2009-10. The appeal was admitted on substantial questions of law concerning the validity of reassessment proceedings under Section 147 and the perversity of the Tribunal's findings. During the pendency of the appeal, the Direct Tax Vivad Se Vishwas Act, 2020, was enacted. The assessee informed the court that they had filed Form-1 under Section 4 of this Act on December 28, 2020, to resolve the disputed tax.

What were the issues?

1. Whether the Tribunal was right in law in holding that the reassessment made under Section 147 is valid, given that the pre-conditions stipulated in that section were not fulfilled by the Revenue to justify the reassessment? 2. Whether the Tribunal's order is perverse in law regarding findings of fact not borne out by the record, especially when the Commissioner of Income Tax (Appeals) had addressed all aspects of the addition and jurisdiction under Section 147 read with Section 145(2)? Assessee's Contentions: The assessee argued that the reassessment proceedings under Section 147 were invalid due to the Revenue's failure to meet the statutory pre-conditions. They also contended that the Tribunal's order was perverse as it was based on findings of fact not supported by the record, and that the Commissioner of Income Tax (Appeals) had already dealt with the relevant aspects. Revenue's Contentions: The judgment does not record any specific contentions made by the Revenue.

Which sections of the Income-tax Act were involved?

Section 147,Section 145(2),Section 260A,Section 4

AI-generated summary — verify with the full judgment below

Tax Case No.731 of 2017 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 04.02.2021 CORAM THE HON'BLE MR.JUSTICE M. DURAISWAMY AND THE HON'BLE MRS.JUSTICE T.V. THAMILSELVI Tax Case Appeal No.731 of 2017 N. Rajasekaran

... Appellant v.

The Income Tax Officer, Ward 5, Door No.6T,, North Cotton Road, Tuticorin - 628 001.

... Respondent

Tax Case Appeal filed under Section 260A of the Income Tax Act, 1961 against the order of the Income Tax Appellate Tribunal, “A” (SMC) Bench, Chennai dated 31.05.2017 passed in I.T.A.No.1446/Mds/2016 for the assessment year 2009-10. For Appellant : V.S. Jayakumar For Respondent : Ms.V. Pushpa Standing Counsel Page 1/6 https://www.mhc.tn.gov.in/judis/ Tax Case No.731 of 2017 J U D G M E N T (Judgment was 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 31.05.2017 passed by the Income Tax Appellate Tribunal, “A” (SMC) Bench, Chennai ('the Tribunal' for brevity) in I.T.A.No.1446/Mds/2016 for the assessment year 2009-10. 2. The appeal was admitted on 22.12.2017 on the following Substantial Questions of Law: " (i) Whether the Tribunal was right in law in holding that the reassessment made under section 147 is valid in law, especially when the pre conditions laid down in that section have not been fulfilled by the Revenue to justify the reassessment? and (ii) Whether the Tribunal's order is perverse in law on the finding of facts which are not borne out by record especially when the Commissioner of Income Tax (Appeals) Page 2/6 https://www.mhc.tn.gov.in/judis/ Tax Case No.731 of 2017 has dealt with all aspects relating to the addition made and jurisdiction under section 147 read with section 145(2) of the Income Tax act, 1961i?"

3.

We have heard V.S. Jayakumar, learned counsel for the appellant and Ms.V. Pushpa, learned Standing Counsel for the respondent. 4. 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. 5. We are informed by the learned counsel for the appellant/assessee that the assessee has already filed the requisite Form - 1 on 28.12.2020 under Section 4 of the Act. Page 3/6 https://www.mhc.tn.gov.in/judis/ Tax Case No.731 of 2017 6. . In the light of the fact that the assessee has already availed the benefit under the Act, no useful purpose would be served in keeping this appeal pending. At the same time, safeguarding the interest of the assessee in the event the order to be passed by the Department under the Act is not in favour of the assessee. Accordingly, the Tax Case Appeal stands disposed of on the ground that the assessee has already filed requisite Form - 1 and the Department shall process the application at the earliest in accordance with the said Act and communicate the decision to the assessee at the earliest. As observed, 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 Division Bench for orders.

Page 4/6 https://www.mhc.tn.gov.in/judis/ Tax Case No.731 of 2017 7. With these observations, the Tax Case Appeal stands disposed of with the aforementioned liberty and Consequently, the Substantial Questions of Law are left open. No costs. (M.D.,J.) (T.V.T.S.,J.) 04.02.2021 Index : Yes/No Internet : Yes Rj To 1. The Income Tax Appellate Tribunal, Chennai “A” (SMC) Bench .

2.

The Income Tax Officer, Ward 5, Door No.6T,, North Cotton Road, Tuticorin - 628 001. Page 5/6 https://www.mhc.tn.gov.in/judis/ Tax Case No.731 of 2017 M. DURAISWAMY, J. and T.V. THAMILSELVI, J. Rj Tax Case Appeal No.731 of 2017

04.02.2021 Page 6/6 https://www.mhc.tn.gov.in/judis/

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