SHRI.N.RAGOTHAMAN vs. THE INCOME TAX OFFICER

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TCA/815/2018HC Madras11 November 2021Bench: Hon`ble Mr Justice R. MAHADEVAN6 pages
AI SummaryWithdrawn

What did the High Court hold?

The High Court noted that during the pendency of the Tax Case Appeal, the assessee had successfully availed the benefits of the Direct Tax Vivad Se Vishwas Act, 2020. The assessee had filed the necessary forms, which were accepted by the Income Tax Department, and Form 3 was issued. Both the assessee and the Revenue conceded this development. Consequently, the Court found it unnecessary to decide the substantial questions of law that had arisen in the appeal. The appeal was disposed of based on the submissions made by both parties, recording that the assessee had already obtained relief under the beneficial legislation. The department was directed to process the application under the Act at the earliest and communicate the decision to the assessee.

What were the facts?

The assessee, Shri N Ragothaman, proprietor of Ravi Jewellery, filed a Tax Case Appeal before the High Court of Judicature at Madras, challenging an order dated 03.04.2018 passed by the Income Tax Appellate Tribunal, "D" Bench, Chennai. This order pertained to the assessment year 2012-13. The appeal was admitted on substantial questions of law concerning the filing of revised returns and the interpretation of a sworn statement during a survey. During the pendency of the appeal, the assessee availed the benefit of the Direct Tax Vivad Se Vishwas Act, 2020, by filing the requisite forms, which were accepted by the Income Tax Department, and Form 3 was issued on 19.02.2021. This development was conceded by the Revenue.

What were the issues?

1. Whether the provisions of Section 139(5) of the Income Tax Act, 1961, permit the filing of a revised return of income within the stipulated time for rectifying mistakes, omissions, or wrong statements in the original return filed under Section 139(1)? 2. Whether the Appellate Tribunal was correct in rejecting a valid revised return of income filed within the scope of Section 139(5), given that such a revised return effaces and replaces the original return? 3. Whether the Appellate Tribunal was justified in misinterpreting the sworn statement of the assessee recorded during a survey, leading to the quantification of sales in light of stock deficit, and whether the profit embedded in such sales would stand the test of the principles of real income theory? Assessee's Contentions: The assessee argued that a valid revised return filed under Section 139(5) should be accepted. The assessee also relied on the principles of real income theory concerning the profit embedded in sales. Revenue's Contentions: The judgment records no specific contentions from the Revenue regarding the issues, other than their concession on the impact of the Vivad Se Vishwas Act.

Which sections of the Income-tax Act were involved?

Section 139(5),Section 139(1),Section 260A

AI-generated summary — verify with the full judgment below

Tax Case Appeal No. 815 of 2018 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 11.11.2021 CORAM THE HON'BLE MR. JUSTICE R. MAHADEVAN AND THE HON'BLE MR. JUSTICE MOHAMMED SHAFFIQ Tax Case Appeal No.815 of 2018 Shri N Ragothaman Prop. Ravi Jewellery No.1, Prakasham Road T.Nagar, Chennai – 600 017 PAN: AAFPR6790K .. Appellant Versus The Income Tax Officer Non Corporate Ward – 2(3) Chennai

.. Respondent

Tax Case Appeal filed under Section 260A of the Income Tax Act, 1961 against the order of the Income Tax Appellate Tribunal, “D” Bench, Chennai, dated 03.04.2018 passed in I.T.A.Nos. 220/Chny/2017 For Appellant : Mr.S. Sridhar For Respondent : Mr.J. Narayansamy

Senior Standing Counsel Page 1/6 https://www.mhc.tn.gov.in/judis Tax Case Appeal No. 815 of 2018 J U D G M E N T (Judgment was delivered by R. MAHADEVAN, J.) This Tax Case Appeal has been filed by the appellant/assessee challenging the order dated 03.04.2018 passed by the Income Tax Appellate Tribunal, "D" Bench, Chennai ('the Tribunal' for brevity) in I.T.A.No. 220/Chny/2017 for the assessment year 2012-13. 2.The above appeal was admitted on 16.11.2018 on the following substantial questions of law: “1.Whether the provisions of Section 139(5) of the Act permit the filing of the revised return of income within the stipulated time prescribed in relation thereto for rectifying the mistakes, omissions and wrong statement in the original return of income filed u/s. 139(1) of the Act? 2.Whether the Appellate Tribunal is correct in rejecting the valid revised return of income within the scope of section 139(5) of the Act while the said valid revised return of income effaced/replaced the original return of income? 3.Whether the Appellate Tribunal is justified in misreading the sworn statement of the Appellant recorded at the time of survey for making the entire sales quantified in the Page 2/6 https://www.mhc.tn.gov.in/judis Tax Case Appeal No. 815 of 2018 light of the deficit stock arrived at based on the purchase/stock register while the profit element embedded in such sales would stand the test of the principles of real income theory?” 3. When the matter was taken into consideration, the learned counsel appearing for the appellant/assessee submitted that durting the pendency of this tax case appeal, the assessee has filed the requisite Forms 1 and 2 under Section 4(1) of the Direct Tax Vivad Se Vishwas Act, 2020 which were accepted and Form 3 was issued to the assessee on 19.02.2021 by the Income Tax Department. The learned counsel has also filed a memo dated 21.10.2021 to that effect. 4. The aforesaid submission made by the learned counsel for the appellant/assessee has also been fairly conceded by the learned senior standing counsel appearing for the respondent/Revenue. 5.This court heard the submissions made by the learned counsel on either side, as per which, the assessee has already availed the benefit conferred under the beneficial legislation viz., the Direct Tax Vivad Se Page 3/6 https://www.mhc.tn.gov.in/judis Tax Case Appeal No. 815 of 2018 Vishwas Act, 2020 enacted for resolution of disputed tax and for matter connected therewith or incidental thereto, which came into force with effect from 17.03.2020; and the declarations submitted by the assessee were also accepted and Form 3 was also issued to them by the Income Tax Department. In view of such development, it is unncessary for this court to decide the substantial question of law arisen in this tax case appeal. 6.Therefore, recording the submissions so made by the learned counsel on either side, this appeal stands disposed of, directing the department to process the application at the earliest in accordance with the Act and communicate the decision to the assessee at the earliest. No costs. (R.M.D., J.) (M.S.Q., J.) 11.11.2021 Internet : Yes

Index : Yes/No dhk Page 4/6 https://www.mhc.tn.gov.in/judis Tax Case Appeal No. 815 of 2018 To 1. The Income Tax Appellate Tribunal “D” Bench, Chennai 2. The Income Tax Officer Non Corporate Ward – 2(3) Chennai – 34

Page 5/6 https://www.mhc.tn.gov.in/judis Tax Case Appeal No. 815 of 2018 R. MAHADEVAN,

and MOHAMMED SHAFFIQ, J. dhk Tax Case Appeal No.815 of 2018

11.11.2021 Page 6/6 https://www.mhc.tn.gov.in/judis

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