MR.VIJAY KUMAR RUNGTA vs. INCOME TAX OFFICER

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TCA/741/2016HC Madras05 February 2021Bench: Hon`ble Mr Justice M.DURAISWAMY6 pages
AI SummaryWithdrawn

What did the High Court hold?

The High Court did not decide the substantial question of law framed for consideration. This was due to the enactment of the Direct Tax Vivad Se Vishwas Act, 2020. The assessee had filed the requisite Form-1 under this Act. Consequently, the Tax Case Appeal was disposed of on the ground that the assessee had availed the benefit under the Vivad Se Vishwas Act. The court directed the Department to process the application at the earliest and communicate the decision to the assessee. The assessee was granted liberty to restore the appeal if the ultimate decision on their declaration under Section 4 of the Vivad Se Vishwas Act was not in their favour. The substantial questions of law were left open. No costs were awarded.

What were the facts?

The assessee, Vijay Kumar Rungta, filed an appeal before the High Court of Judicature at Madras against an order of the Income Tax Appellate Tribunal, Chennai dated April 7, 2016. This order pertained to the assessment year 2007-08. The appeal was admitted on the substantial question of law regarding whether the Tribunal was right in treating an amount as unexplained investment under Section 69 of the Income Tax Act, 1961, when the assessee contended it was a loan and not an investment. Subsequently, the Direct Tax Vivad Se Vishwas Act, 2020, was enacted. The assessee informed the court that they had filed Form-1 under this Act on January 31, 2021.

What were the issues?

1. Whether, on the facts and circumstances of the case, the Income Tax Appellate Tribunal was right in treating the amount as unexplained investment under Section 69 of the Act when no investment was made by the appellant and the amount was only in the nature of loan? Assessee's Contention: The amount in question was in the nature of a loan and not an investment made by the appellant. Therefore, it should not be treated as unexplained investment under Section 69 of the Act. Revenue's Contention: The judgment records no specific contention from the revenue regarding this issue.

Which sections of the Income-tax Act were involved?

Section 260A,Section 69,Section 4

AI-generated summary — verify with the full judgment below

Tax Case No.741 of 2016 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 05.02.2021 CORAM THE HON'BLE MR.JUSTICE M. DURAISWAMY AND THE HON'BLE MRS.JUSTICE T.V. THAMILSELVI Tax Case Appeal No.741 of 2016 Vijay Kumar Rungta

... Appellant v.

Income Tax Officer, Ward 1(3), 15, Gandhiji Road, Erode – 638 001.

... Respondent

Tax Case Appeal filed under Section 260A of the Income Tax Act, 1961 against the order of the Income Tax Appellate Tribunal, "A" Bench, Chennai dated 07.04.2016 passed in I.T.A.No.179/Mds/2016 for the assessment year 2007-08. For Appellant : Ms. G. Janani for M/s. Lakshmi Kumaran For Respondent : Mr.T.R. Senthil Kumar Senior Standing Counsel Asst.by Ms. K.G. Usha Rani Junior Standing Counsel Page 1/6 https://www.mhc.tn.gov.in/judis/ Tax Case No.741 of 2016 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 07.04.2016 passed by the Income Tax Appellate Tribunal, "A" Bench, Chennai ('the Tribunal' for brevity) in I.T.A.No.179/Mds/2016 for the assessment year 2007-08. 2. The appeal was admitted on 29.10.2016 on the following Substantial Questions of Law: " Whether on the facts and circumstances of the case, the Income Tax Appellate Tribunal was right in treating the amount as unexplained investment under section 69 of the Act when no investment was made by the appellant and ;the amount was only in the nature of loan?”

3.

We have heard Ms. G. Janani, learned counsel for the appellant and Mr.T.R. Senthil Kumar, learned Senior Standing Counsel, learned Standing Counsel for the respondent. Page 2/6 https://www.mhc.tn.gov.in/judis/ Tax Case No.741 of 2016 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 31.01.2021 under Section 4 of the Act. 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 Page 3/6 https://www.mhc.tn.gov.in/judis/ Tax Case No.741 of 2016 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.

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.) 05.02.2021 Index : Yes/No Internet : Yes Rj Page 4/6 https://www.mhc.tn.gov.in/judis/ Tax Case No.741 of 2016 To 1. The Income Tax Appellate Tribunal, Chennai "A" Bench .

2.

The Income Tax Officer, Ward 1(3), 15, Gandhiji Road, Erode – 638 001. Page 5/6 https://www.mhc.tn.gov.in/judis/ Tax Case No.741 of 2016 M. DURAISWAMY, J. and T.V. THAMILSELVI, J. Rj Tax Case Appeal No.741 of 2016

05.02.2021 Page 6/6 https://www.mhc.tn.gov.in/judis/

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