Madras High Court Judgments — 2021

The High Court noted that the assessee had filed a declaration under the Vivad Se Vishwas Scheme. Consequently, the Court directed the Competent Authority to process the application/declaration in accordance with the Direct Tax Vivad Se Vishwas Act, 2020, and pass appropriate orders expeditiously. The assessee was granted liberty to restore the appeal if the decision on the declaration was not in their favour. In such an event, the Registry was directed to entertain the restoration petition without requiring a condonation of delay application. The substantial questions of law were left open, and the tax case appeal was disposed of with the aforementioned liberty.

The High Court disposed of the appeals in light of the subsequent event of the assessee filing a declaration under the Vivad Se Vishwas Scheme. 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 assessee was granted liberty to restore the appeals if the decision on their declaration was not in their favour. In such an event, the Registry was directed to entertain the restoration petition without insisting on a condonation of delay application. Consequently, the substantial questions of law framed were left open and not decided on merits.

The High Court dismissed the appeal filed by the Revenue. The dismissal was based on the submission made by the Revenue that the appeal was not being pursued due to a low tax effect, falling below the threshold limit stipulated in CBDT Circular No. 17/2019. Consequently, the substantial question of law framed for the appeal was left undecided. The Court granted liberty to the Revenue to file a petition for restoration of the appeal if the tax effect was found to be above the threshold limit, allowing it to be heard and decided on merits. No costs were awarded.

The High Court noted that the assessee had filed a declaration under the Vivad Se Vishwas Act, 2020. Consequently, the Court directed the Competent Authority to process the application/declaration and pass appropriate orders expeditiously. The appeal was disposed of with liberty granted to the assessee to restore it in the event the decision on the Vivad Se Vishwas declaration was not in its favour. If restoration was sought, the Registry was to entertain the miscellaneous petition without insisting on a condonation of delay application. As a result, the substantial questions of law framed were left open and not decided on merits. No costs were awarded.

The High Court dismissed the appeal filed by the Revenue on account of low tax effect, as per CBDT Circular No. 17/2019, which increased the monetary limit for filing appeals before the High Court to Rs. 1 Crore. The Court noted that the tax effect in this case was below the threshold limit. Consequently, the substantial questions of law framed by the Revenue were left open. The Revenue was granted liberty to file a petition to restore the appeal if the tax effect is found to be above the threshold limit fixed in the circular. The appeal was dismissed without deciding on the merits of the substantial questions of law. No costs were awarded.

The High Court allowed the appeal, answering the substantial question of law in favour of the assessee. The Court relied on its own previous decision in the case of Commissioner of Income Tax, Chennai vs M/s.Celebrity Fashion Ltd. (T.C.A.No.26 of 2018 dated 21.09.2020). This decision, in turn, followed the High Court's ruling in CIT Vs. Chettinad Logistics Pvt. Ltd. The principle established is that Section 14A of the Act, read with Rule 8D, has no applicability if there is no exempt income earned or received during the previous year, even if the disallowance is linked to expenditure incurred on investments that could potentially fetch exempt income. The Court noted that the Revenue's appeals against the Chettinad Logistics Pvt. Ltd. decision to the Supreme Court were dismissed on grounds of delay and merits. Therefore, the impugned order of the Tribunal was set aside.

The High Court disposed of the appeal without deciding the substantial questions of law. This was due to a subsequent event where the assessee filed a declaration under the Vivad Se Vishwas Act, 2020. The Court directed the Competent Authority to process the declaration and pass appropriate orders expeditiously. The assessee was granted liberty to restore the appeal if the decision under the Vivad Se Vishwas Act was not in their favour. Consequently, the substantial questions of law were left open and not adjudicated upon. No costs were awarded.

The High Court noted that the assessee had filed a declaration under the Vivad Se Vishwas Scheme on 30.12.2020 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 Tax Case Appeal was disposed of with liberty granted to the assessee to restore the appeal if the decision on their declaration under the Vivad Se Vishwas Act was not in their favour. Consequently, the substantial questions of law framed by the Revenue were left open and not decided on merits. No costs were awarded.

The High Court allowed the appeal, setting aside the impugned order of the ITAT. The Court found the case squarely applicable to a previous decision in M.Mukesh Kumar vs Income Tax Officer (T.C.A.No.2 of 2021), where an appeal was dismissed on a hyper-technical ground. The High Court noted that the ITAT dismissed the appeal on the ground of non-rectification of defects and also touched upon the merits, which should not have been done. The fact that none appeared for the assessee was also a reason for interference. The Court held that the defect, being insignificant or inadvertent, ought to have been permitted to be rectified under Rule 12 of the Income Tax (Appellate Tribunal) Rules, 1963. The appeal was restored to the file of the ITAT to be heard and decided on merits. The substantial questions of law were left open. No costs were awarded.

The High Court noted that the assessee had availed the Vivad Se Vishwas Scheme, and therefore, there might not be a necessity to answer the substantial questions of law. However, the Court referred to an identical case, Commissioner of Income Tax vs Manish D.Jain (HUF), where similar questions were answered in favour of the Revenue. The Court highlighted that the AO and CIT(A) had conducted detailed inquiries into the purchase of shares, finding them to be sham transactions with artificially hiked selling rates. The AO had sent notices under Section 133(6) to the seller, which returned unserved with the remark 'not known'. The Court found no material necessitating the remand by the Tribunal and held that the Tribunal had failed to exercise its jurisdiction properly. The Court concluded that the order passed by the Tribunal called for interference. Consequently, the appeal was allowed, the Tribunal's order was set aside, and the substantial questions of law were answered in favour of the Revenue. The order of the CIT(A) was restored. However, due to the assessee availing the Vivad Se Vishwas scheme, the appeal was disposed of with liberty to the assessee to restore it if the scheme's outcome is not in their favour, leaving the substantial questions of law open.

The High Court dismissed the appeal filed by the Revenue. The dismissal was based on the submission made by the learned Standing Counsel for the Revenue that the appeal was not being pursued due to a low tax effect, falling below the threshold limit stipulated in CBDT Circular No. 17/2019, which increased the monetary limit for appeals before the High Court to Rs. 1 Crore. Consequently, the substantial questions of law raised by the Revenue were left open. The Court granted liberty to the Revenue to file a petition for restoration of the appeal if the tax effect was found to be above the threshold limit, allowing it to be heard and decided on merits. No decision was made on the merits of the substantial questions of law.

The High Court noted that the assessee had filed a declaration under the Vivad Se Vishwas Scheme, 2020, on July 17, 2020, and was awaiting orders. Consequently, 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 assessee was granted liberty to restore the appeals if the decision on their declaration was not in their favour. In such an event, the Registry was directed to entertain restoration petitions without insisting on condonation of delay. The substantial questions of law were left open, and the appeals were disposed of with the aforementioned liberty.

The High Court noted that the assessee had filed a declaration under the Vivad Se Vishwas Act, 2020. In light of this subsequent event, the Court directed the Competent Authority to process the declaration and pass appropriate orders expeditiously. The appeal was disposed of with liberty granted to the assessee to restore the appeal if the decision on their declaration under the Vivad Se Vishwas Act was not in their favour. Consequently, the substantial questions of law framed for the appeal were left undecided. The operative direction was to process the Vivad Se Vishwas application and allow restoration of the appeal if needed. No costs were awarded.

The High Court held that the dismissal of the appeal by the ITAT on the ground of a defective cause title, due to a minor typographical error in the assessee's initial ('I' instead of 'M'), was hyper-technical and unjustified. The Court noted that the ITAT itself had correctly recorded the initial in its impugned order, suggesting the error was insignificant. The Court also considered that the defect memo was not returned to the assessee and that Rule 12 of the ITAT Rules provides for rectification procedures. The Court expressed a need for the ITAT to evolve a procedure for returning defective papers for rectification. Consequently, the High Court allowed the appeal, set aside the ITAT's order, and remanded the appeal to the ITAT for a decision on merits. The Court directed that the assessee's name be correctly recorded as 'M. Mukesh Kumar' and permitted the assessee to carry out corrections. The substantial questions of law were left undecided.

The High Court, following its own earlier decision in CIT Vs. A.A.Antony & others (TCA. Nos.432, 433 and 436 of 2020 dated 18.12.2020), held that the appeals need not have been rejected by the CIT(A) on the ground that they were not e-filed within the period of limitation. The Court noted that the CBDT circular was a one-time measure and that the substantive right of appeal should not be denied on a technical ground. The Court found that the ITAT had not committed any error in exercising its discretion in favour of the assessee. The Court acknowledged that some appeals had delays of over 400 or 900 days but reiterated that, considering the fact situation prevailing at the relevant time and as noted by the CBDT, it did not wish to take a different view. The Court concluded that the order passed by the Tribunal did not call for interference. The substantial questions of law were answered against the Revenue.