Madras High Court Judgments — 2021

The High Court dismissed the appeals filed by the Revenue as withdrawn. This decision was based on the submission by the Revenue's counsel that the appeals were not being pursued due to a low tax effect, falling below the threshold limit of Rs.1 crore as per CBDT Circular No.17/2019. The Court explicitly stated that the substantial questions of law framed were left open. Liberty was granted to the Revenue to seek restoration of the appeals if the tax effect was found to be above the threshold limit, allowing for a hearing and decision on the merits. No costs were imposed.

The High Court did not decide the substantial questions of law framed for consideration. This was due to subsequent developments, specifically the enactment of the Direct Tax Vivad Se Vishwas Act, 2020. The learned counsel for the respondent/assessee submitted that the assessee had availed the Vivad Se Vishwas Scheme and had been issued Form-3 on 16.12.2020. Recording this submission, the Court found that nothing further survived for adjudication in the appeal. Consequently, the Tax Case Appeal was disposed of without deciding the merits of the substantial questions of law. No costs were awarded. The specific findings or reasoning of the Tribunal on the original issues are not detailed as the appeal was disposed of on procedural grounds.

The High Court did not decide the substantial questions of law on their merits. Instead, the Court noted the submission by the Revenue's counsel regarding CBDT Circular No.17/2019, which mandates that appeals shall not be filed or pursued if the tax effect does not exceed Rs.1,00,00,000/-. As the tax effect in these appeals was stated to be less than this monetary limit, the Court dismissed the appeals as withdrawn. The Court explicitly stated that the substantial questions of law were kept open for determination in appropriate cases. Therefore, there was no finding on the merits of the issues raised, and no operative directions were issued concerning the deduction under Section 80IB(10) or the conditions thereof. No issue was expressly left undecided as the appeals were disposed of on a procedural ground.

The High Court allowed the appeal, setting aside the order of the ITAT. The Court found that the ITAT's dismissal of the appeal on a technical ground, such as a defect in the appeal fee or a minor error in the assessee's name, was hyper-technical and violated principles of natural justice, especially when the appeal was dismissed ex-parte and the Tribunal touched upon the merits. The Court relied on its own previous decision in M.Mukesh Kumar vs Income Tax Officer (TCA.No.2 of 2021) which dealt with a similar situation of dismissal on technical grounds without proper rectification opportunity. The High Court directed that the appeal be 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 appellant-assessee had filed a declaration/undertaking under the Vivad Se Vishwas Scheme on 22.02.2021 and was awaiting orders. In light of this subsequent event, the Court directed the Competent Authority to process the application/declaration under 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 their declaration under Section 4 of the Vivad Se Vishwas Act was not in their favour. If restoration was sought, the Registry was instructed to entertain the miscellaneous petition without requiring a condonation of delay application. Consequently, the substantial questions of law framed were left open, and the tax case appeal was disposed of with the aforementioned liberty. No costs were awarded.

The High Court did not decide the substantial questions of law framed for consideration. This was due to the enactment of the Direct Tax Vivad Se Vishwas Act, 2020. The learned counsel for the appellant/assessee informed the Court that the assessee had been issued Form-3 under this Act and sought permission to withdraw the appeal. In view of this submission, the Tax Case Appeal was dismissed as withdrawn. No costs were awarded. The specific findings of the ITAT on the lease rentals and depreciation are not discussed or adjudicated upon by the High Court.

The High Court did not decide the substantial questions of law framed for consideration. This was due to subsequent developments, specifically the enactment of the Direct Tax Vivad Se Vishwas Act, 2020. The learned counsel for the respondent/assessee submitted that the assessee had availed the Vivad Se Vishwas Scheme and had been issued Form-3 on December 16, 2020. Recording this submission, the High Court concluded that nothing further survived for adjudication in the appeal. Therefore, the Tax Case Appeal was disposed of on this basis, without delving into the merits of the ITAT's order or the substantial questions of law. No costs were awarded.

The High Court noted that the assessee had filed a declaration under the Vivad Se Vishwas Scheme on January 30, 2021, 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 assessee was granted liberty to restore the appeal if the decision on their declaration was not in their favour. If such a prayer was made, the Registry was instructed to entertain it without insisting on a delay condonation application. Consequently, the substantial questions of law raised in the appeal were left undecided. No costs were awarded.

The High Court did not decide the substantial questions of law framed for consideration. The court noted that the Direct Tax Vivad Se Vishwas Act, 2020, had been enacted to provide for the resolution of disputed tax. The learned counsel for the appellant (assessee) informed the court that the assessee had filed the requisite forms under Section 4 of the Vivad Se Vishwas Act, and the department had issued Form-3. In view of this submission, the learned counsel for the appellant sought permission to withdraw the appeal. Consequently, the Tax Case Appeal was dismissed as withdrawn. No costs were awarded. The court did not make any findings on the penalty or the gratuity deduction issue.

The High Court dismissed the appeal as withdrawn. The Revenue's counsel submitted that the appeal was not being pursued due to low tax effect, citing CBDT Circular No. 17/2019, which increased the monetary limit for appeals to the High Court to Rs. 1 crore. The tax effect in this case was stated to be below this threshold. Consequently, the appeal was dismissed as withdrawn on account of low tax effect. The substantial question of law framed by the Revenue was left open. Liberty was granted to the Revenue to seek restoration of the appeal if the tax effect was found to be above the threshold limit, to be heard and decided on merits. No costs were awarded.

The High Court decided not to adjudicate the substantial questions of law framed for consideration due to subsequent developments. The Government of India enacted the Direct Tax Vivad Se Vishwas Act, 2020, which provides for the resolution of disputed tax. The learned counsel for the appellant/assessee informed the Court that the assessee had already been issued Form-3 under this Act and sought permission to withdraw the appeal. Consequently, the Tax Case Appeal was dismissed as withdrawn. No costs were awarded. The specific findings of the ITAT on the classification of the loss (capital vs. business) and the reasoning behind it, as well as the ratio decidendi for future cases, were not addressed by the High Court as the appeal was withdrawn.

The High Court dismissed the appeal as withdrawn on account of low tax effect, as per the submissions made by the Revenue based on CBDT Circular No.17/2019. The Court noted that the tax effect was less than the threshold limit for pursuing appeals before the High Court. Consequently, the substantial questions of law framed were left open. The Revenue was granted liberty to seek restoration of the appeal if the tax effect was found to be above the threshold limit, to be heard and decided on merits. No costs were awarded. The specific findings of the Tribunal on the disallowance under Section 14A and its impact on book profit under Section 115JB were not adjudicated by the High Court.

The High Court did not decide the substantial questions of law framed for consideration. This was due to subsequent developments, specifically the enactment of the Direct Tax Vivad Se Vishwas Act, 2020. The learned counsel for the assessee informed the Court that Form-3 had been issued to the assessee under this Act and sought permission to withdraw the appeals. In view of this submission, the High Court dismissed the Tax Case Appeals as withdrawn. No costs were awarded. The operative direction was to dismiss the appeals as withdrawn.

The High Court noted that the appeal was admitted on a substantial question of law concerning the allowability of provision for leave encashment under Section 43B(f). However, the Court found it unnecessary to decide the substantial question of law due to subsequent developments. The assessee had availed the Direct Tax Vivad Se Vishwas Act, 2020, and was issued Form-3 on 02.02.2021. Since the assessee had opted for the Vivad Se Vishwas Scheme, nothing remained for adjudication in the appeal. Therefore, the Tax Case Appeal was disposed of on this basis, without deciding the merits of the substantial question of law. No costs were awarded.

The High Court did not decide the substantial questions of law framed for consideration. This was due to subsequent developments, specifically the enactment of the Direct Tax Vivad Se Vishwas Act, 2020. The Court was informed by the assessee's counsel that the assessee had been issued Form-3 under this Act, indicating a resolution of the disputed tax. Consequently, the assessee sought permission to withdraw the appeal. In view of this submission, the High Court dismissed the Tax Case Appeal as withdrawn. No costs were awarded. The specific findings of the ITAT on the penalty under Section 271AA were not reviewed or adjudicated upon by the High Court.

The High Court found no good grounds to interfere with the ITAT's findings. The Tribunal had rightly considered that the land was classified as agricultural in revenue records, situated beyond eight kilometers from municipal limits, and that agricultural activities were being carried out as per revenue records. The land was purchased and sold as agricultural land, and its larger extent also indicated it was agricultural. The Tribunal correctly noted that the purchaser's intention is immaterial in determining whether the land is agricultural. The Tribunal applied various decisions, including the Division Bench ruling in Mrs. Sakunthala Vedachalam & Another Vs. ACIT, 369 ITR 558 (Mad), to allow the assessee's appeal. Consequently, the appeal filed by the Revenue fails and is dismissed. The substantial questions of law are answered against the Revenue. No costs were awarded.

The High Court noted that the assessee had filed an application under the Vivad Se Vishwas Scheme and that Form No.3 had been issued, albeit with an incorrect appeal number. The assessee had filed a rectification application to correct this error and a memo seeking withdrawal of the appeal to facilitate compliance with the scheme. Consequently, the Court disposed of the tax case appeal with liberty to the assessee to restore it if the decision on their Vivad Se Vishwas declaration was not in their favour. The Court also directed the concerned authority to process the assessee's rectification petition expeditiously. The substantial questions of law were left undecided.

The High Court did not decide the substantial questions of law framed for consideration. This was due to the enactment of the Direct Tax Vivad Se Vishwas Act, 2020. The learned counsel for the respondent-assessee submitted that the assessee had availed the Vivad Se Vishwas Scheme and had been issued Form-3 on December 16, 2020. Recording this submission, the High Court held that nothing further survived for adjudication in the appeal. Therefore, the appeal was disposed of on this basis, without delving into the merits of the substantial questions of law concerning the deletion of penalty under Section 271(1)(c) and the reliance on Supreme Court judgments.

The High Court noted that the assessee had filed a declaration under the Vivad Se Vishwas Scheme, 2020. Consequently, the Court directed the Competent Authority to process the application/declaration under 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 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. The appeal was disposed of with this liberty, and the substantial questions of law were left open, meaning they were not decided on merits.

The High Court did not decide the substantial questions of law framed for consideration. This was due to the enactment of the Direct Tax Vivad Se Vishwas Act, 2020. The assessee informed the Court that they had been issued Form-3 under this Act and requested permission to withdraw the appeals. Consequently, the Tax Case Appeals were dismissed as withdrawn. No costs were awarded. The specific issues regarding the disallowance of guarantee commission and rent payments to directors, and the applicability of Sections 37(1) and 40A(2)(a) of the Income Tax Act, 1961, were not adjudicated upon by the High Court.

The High Court dismissed the appeal filed by the Revenue. The Court held that the argument concerning the non-fulfillment of conditions under sub-Section (7) of Section 80IA was a new point not raised by the Revenue at any earlier stage. The Court noted the historical context, including the Settlement Commission's findings and the previous High Court proceedings concerning the benamidar, Mr. Francis Joseph. The Court also observed that Mr. Francis Joseph had availed the KVSS Scheme, and his tax credit was subsequently adjusted towards the assessee's tax liability. The Tribunal's decision in favour of the assessee was based on the finding that the production of cinema films qualified as manufacturing or processing of goods, as per CBDT circular, and that the Revenue had not demonstrated any transfer of used machinery. The Court found no error in the Tribunal's order. The substantial questions of law were answered against the Revenue.

The High Court held that the reopening of the assessment was invalid and constituted a change of opinion. The Court noted that there was no allegation against the assessee for failing to fully and truly disclose all details during the initial assessment under Section 143(3). The Tribunal was therefore correct in holding that there was no negligence on the part of the assessee. Consequently, the reason for reopening, which was to recalculate expenditure under Section 14A based on a different interpretation of Rule 8D(2), clearly amounted to a change of opinion. The Court distinguished the facts of the case from the P.V.S. Beedies P. Ltd. decision, finding it not applicable. The appeal filed by the Revenue was dismissed, and the substantial questions of law were answered against the Revenue.

The High Court noted that the assessee had filed a declaration under the Vivad Se Vishwas Scheme, 2020, and was awaiting orders. In light of this subsequent event, the Court directed the Competent Authority to process the assessee's application under 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 their declaration was not in their favour. If restoration was sought, the Registry was directed to entertain the miscellaneous petition without insisting on a condonation of delay application. Consequently, the substantial questions of law framed by the Revenue were left open and not decided on merits. The Tax Case Appeal was disposed of with the aforementioned liberty.

The High Court noted that after the ITAT's impugned order, the Revenue filed a miscellaneous petition before the ITAT, highlighting incorrect figures regarding share capital and non-interest-bearing funds. The ITAT, by an order dated 30.08.2019, allowed the miscellaneous petition and remitted the matter back to the Assessing Officer. The ITAT observed that both parties agreed that the interest-bearing fund advanced to the sister concern was Rs. 4.41 crores (Rs. 74.59 crores - Rs. 70.18 crores), and accordingly, the interest disallowance had to be made on this amount. The ITAT remitted the matter to the Assessing Officer to determine the interest. The assessee's counsel informed the High Court that the assessee accepted the ITAT's order dated 30.08.2019 and did not prefer any appeal. Consequently, the High Court held that there was no necessity to answer the substantial questions of law framed for consideration in the appeal. The appeal was disposed of, and the substantial questions of law were left unanswered.

The High Court disposed of the appeal 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 application under 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 their declaration was not in their favour. Consequently, the substantial questions of law framed for the appeal were left undecided. No costs were awarded. The judgment does not provide findings on the merits of the substantial questions of law.

The High Court did not decide the substantial question of law. The Court was informed about the enactment of the Direct Tax Vivad Se Vishwas Act, 2020, and that the assessee had received Form-3 under this Act. Based on the assessee's submission and request to withdraw the appeal in light of this development, the Court dismissed the appeal as withdrawn. Therefore, there is no finding on the merits of the substantial question of law, nor any reasoning or ratio decidendi provided by the High Court on the taxability of the sale of agricultural lands. The operative direction was to dismiss the appeal as withdrawn.

The High Court disposed of the appeal in light of the assessee filing a declaration under the Vivad Se Vishwas Scheme, 2020. The Court directed the Competent Authority to process the application expeditiously. The assessee was granted liberty to restore the appeal if the decision on its declaration under the Vivad Se Vishwas Act was not in its favour. Consequently, the substantial questions of law framed for the appeal were left undecided. No costs were awarded. The operative direction was to dispose of the appeal with liberty to restore, leaving the substantial questions of law open.

The High Court noted that the assessee had filed a declaration under the Vivad Se Vishwas Scheme, 2020, and was awaiting orders. Consequently, the Court directed the Competent Authority to process the application 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 ultimate decision on their declaration was not in their favour. In light of this subsequent event, the appeals were disposed of, and the substantial questions of law were left open. No decision was made on the merits of the substantial questions of law.

The High Court noted that the appellant/assessee had filed a declaration/undertaking under the Vivad Se Vishwas Scheme on 08.01.2021 and was awaiting orders. In light of this subsequent event, the Court directed the Competent Authority to process the application/declaration under 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 their declaration under Section 4 of the said Act was not in their favour. Consequently, the substantial questions of law framed were left open, and the tax case appeal was disposed of with the aforementioned liberty. No costs were awarded.

The High Court did not decide the substantial questions of law framed for consideration. This was due to subsequent developments, specifically the enactment of the Direct Tax Vivad Se Vishwas Act, 2020. The Court was informed by the assessee's counsel that Form-3 had been issued to the assessee under this Act, and the assessee sought permission to withdraw the appeals. Consequently, the Tax Case Appeals were dismissed as withdrawn. No costs were awarded. The specific findings of the Tribunal on the disallowance of guarantee commission and rent payments, and the reasoning behind them, were not addressed by the High Court in this order.

The High Court did not decide the substantial questions of law framed for consideration. This was due to subsequent developments, specifically the enactment of the Direct Tax Vivad Se Vishwas Act, 2020. The assessee informed the Court that they had received Form-3 under this Act and sought permission to withdraw the appeals. Consequently, the Court dismissed the Tax Case Appeals as withdrawn. No costs were awarded. The specific findings of the ITAT on the denial of tax exemption under Section 11 based on Section 13(1)(b) were not adjudicated upon by the High Court.

The High Court noted that it was not necessary to decide the substantial questions of law due to subsequent developments. The Government of India enacted the Direct Tax Vivad Se Vishwas Act, 2020, for the resolution of disputed tax. The learned counsel for the assessee informed the court that the assessee had been issued Form-3 under the Vivad Se Vishwas Act and sought permission to withdraw the appeals. Consequently, the High Court dismissed the Tax Case Appeals as withdrawn. No costs were awarded. The specific findings or reasoning of the ITAT on the disallowance of guarantee commission and rent payments were not addressed by the High Court as the appeals were disposed of on procedural grounds.

The High Court dismissed the appeals as withdrawn. The Revenue's counsel submitted that the appeals were not being pursued due to low tax effect, citing CBDT Circular No.17/2019 which increased the monetary limit for appeals before the High Court to Rs.1 crore. The Court noted that the tax effect in these cases was below this threshold. Consequently, the appeals were dismissed as withdrawn on account of low tax effect. The substantial questions of law framed at the time of admission were expressly left open. Liberty was granted to the Revenue to seek restoration of the appeals if the tax effect was found to be above the threshold limit, to be heard and decided on merits.

The High Court did not decide the substantial question of law framed for consideration. This was due to subsequent developments, specifically the enactment of the Direct Tax Vivad Se Vishwas Act, 2020. The assessee informed the Court that they had been issued Form-3 under this Act on 30.12.2020 and sought permission to withdraw the appeal. Consequently, the Tax Case Appeal was dismissed as withdrawn. No finding was reached on the merits of the addition of Rs.17,00,000/- or the assessee's compliance with Section 68. The operative direction was the dismissal of the appeal as withdrawn.

The High Court did not decide the substantial questions of law. It was informed that the assessee had opted for the Direct Tax Vivad Se Vishwas Act, 2020, and had been issued Form-3. Based on the assessee's submission and request to withdraw the appeal, the High Court dismissed the Tax Case Appeal as withdrawn. The appeal was admitted on substantial questions of law concerning the treatment of capital profits on the sale of fixed assets for book profit computation under Section 115JB. However, due to the subsequent enactment of the Vivad Se Vishwas Act and the assessee's decision to avail its benefits, the merits of the substantial questions of law were not adjudicated upon. The operative direction was to dismiss the appeal as withdrawn.

The High Court did not decide the substantial questions of law framed for consideration. This was due to subsequent developments, specifically the enactment of the Direct Tax Vivad Se Vishwas Act, 2020. The assessee informed the Court that Form – 3 had been issued on 21.01.2021 and sought permission to withdraw the appeal. Consequently, the Tax Case Appeal was dismissed as withdrawn. No finding was reached on the merits of the substantial questions of law, and therefore, no ratio decidendi or operative directions were issued by the High Court on the tax dispute itself. The issue of exemption under Section 54F and the applicability of V.R.Karpagam were left undecided.

The High Court did not decide the substantial questions of law framed for consideration. This was due to subsequent developments, specifically the enactment of the Direct Tax Vivad Se Vishwas Act, 2020. The learned counsel for the appellant/assessee informed the Court that the assessee had been issued Form – 3 under the Vivad Se Vishwas Act on 04.01.2021 and sought permission to withdraw the appeal. Consequently, the High Court dismissed the Tax Case Appeal as withdrawn. No costs were awarded. The specific findings of the ITAT on the penalty and disallowance were not adjudicated upon by the High Court.

The High Court, upon considering the submissions of both parties, dismissed the appeal as withdrawn. The dismissal was based on the Revenue's submission that the tax effect in the case was below the threshold limit prescribed by CBDT Circular No. 17/2019. The Court explicitly stated that the substantial questions of law framed at the time of admission were left open. Liberty was granted to the Revenue to seek 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 held that the assessee failed to discharge the primary onus cast upon them under Section 68 of the Income Tax Act, 1961. This onus requires proving the genuineness of the transaction, the identity of the creditors, and their creditworthiness, including financial capacity. The Court noted that the assessee had not provided confirmation letters, bank account details, or produced any person for verification of the share application money. The remand report was adverse to the assessee, highlighting the lack of details such as PAN numbers. The Court distinguished the present case from those where the assessee had discharged their onus, citing Principal Commissioner of Income Tax, Central I vs. NRA Iron & Steel Pvt. Ltd. and J.J. Development Private Ltd. vs. CIT. The Court found that merely furnishing a list of names and addresses, or a statutory form under the Companies Act, without PAN numbers or proof of creditworthiness, was insufficient. Therefore, the Tribunal erred in confirming the CIT(A)'s order. The substantial questions of law were decided in favour of the Revenue.

The High Court held that the substantial question of law was answered in favour of the assessee. The Court referred to its own prior decision in S.P. Spinning Mills Pvt. Ltd. Vs. ACIT, Salem, which had addressed the issue of carbon credits. In that decision, the Tribunal's view that carbon credit receipts are capital receipts, based on decisions of various High Courts including Karnataka and Andhra Pradesh, was noted. The Court emphasized that the nature of the receipt from the sale of carbon credit is capital in nature. Therefore, it falls outside the purview of gross total income and consequently, the question of deduction under Section 80IA becomes a non-issue. The Court found the Tribunal's approach of pinning the assessee to their Section 80IA claim, while failing to decide the capital receipt issue, to be erroneous. The appeal was dismissed.

The High Court noted that the assessees had filed declarations under the Vivad Se Vishwas Scheme, and orders had been passed in Form No.3 for the respective assessment years. Consequently, the appeals were disposed of with liberty granted to the assessees to restore them if the ultimate decision under the Vivad Se Vishwas Scheme was not in their favour. In light of this subsequent event and the liberty granted, the substantial questions of law framed were expressly left undecided by the High Court. The operative direction was to dispose of the appeals with the aforementioned liberty, without costs.

The High Court allowed the appeals filed by the Revenue. It noted that an identical issue had been considered by a Division Bench of the same Court in the case of CIT Vs. Manish D.Jain [HUF], reported in (2020) 122 Taxmann.com 180, and that the issue had been answered in favour of the Revenue. In light of this precedent, the High Court set aside the impugned orders passed by the ITAT and answered the substantial questions of law in favour of the Revenue. The operative direction is to set aside the ITAT's orders. No issue was expressly left undecided.

The High Court dismissed the appeals filed by the Revenue on the grounds of low tax effect, citing Circular No.17/2019 of the CBDT which increased the monetary limit for pursuing appeals before the High Court to Rs.1 Crore. The Court noted that the tax effect in these cases was below this threshold. Consequently, the substantial questions of law were left open. The Revenue was granted liberty to mention the case for restoration if the tax effect was found to be above the threshold limit. No costs were imposed. The connected Civil Miscellaneous Petition (CMP) was also dismissed. The judgment did not decide the merits of the substantial questions of law.

The High Court dismissed the appeal filed by the Revenue on account of low tax effect, as per CBDT Circular No. 17/2019. The Court noted that the Revenue's Senior Standing Counsel submitted that the appeal was not being pursued because the tax effect was less than the increased monetary threshold of Rs. 1 Crore for High Court appeals. Consequently, the substantial questions of law raised by the Revenue were left open. The Court granted liberty to the Revenue to file a petition to restore 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 disposed of the appeal without deciding the substantial questions of law. The Court noted that the assessee had filed a declaration under the Vivad Se Vishwas Scheme, and an order had been passed on 08.12.2020. The assessee was granted liberty to restore the appeal if the decision under the Vivad Se Vishwas Scheme was not in their favour. If such a prayer was made, the Registry was directed to entertain it without insisting on a condonation of delay petition. Consequently, the substantial questions of law raised in the appeal were left undecided. The operative direction was to dispose of the tax case appeal with the aforementioned liberty.

The High Court acknowledged that under normal circumstances, it would not assist an assessee who had not been diligent. However, it took a different view because the ITAT had remanded one issue to the Assessing Officer (AO) for re-adjudication. Consequently, the Court decided to interfere with the ITAT's order. The High Court set aside the findings of the ITAT in paragraphs 8 and 9 of its order. The matter was remanded to the AO for re-adjudication, to be considered along with the issue pertaining to non-deduction of tax at source, which the ITAT had already remanded. The assessee was given the liberty to place all relevant materials before the AO to substantiate their case. The substantial questions of law raised were left open. The appeal was partly allowed.

The High Court noted that the assessee had filed a declaration under the Vivad Se Vishwas Scheme, and orders were passed on December 23, 2020. In light of this subsequent development, the Court granted the assessee liberty to restore the appeal if the decision on their declaration under the scheme was not in their favour. The Court directed that if such a prayer is made, the Registry should entertain it without requiring a petition for condonation of delay and place it before the appropriate Division Bench. Consequently, the Tax Case Appeal was disposed of with this liberty, and the substantial questions of law were left open. No decision was made on the merits of the penalty levied under Section 271(1)(c).

The High Court disposed of the appeals by granting the assessee liberty to restore them if the outcome of their declaration under the Vivad Se Vishwas Scheme is not in their favour. The Court noted that the assessee had filed declarations under the Vivad Se Vishwas Scheme, and orders were passed on January 28, 2021. Consequently, the substantial questions of law raised in the appeals were left undecided. The operative direction was to allow the assessee to seek restoration of the appeals through miscellaneous petitions without insisting on condonation of delay if the Vivad Se Vishwas Scheme outcome is unfavorable. No costs were awarded. The specific findings on the substantial questions of law were not made.

The High Court held that the Tribunal erred in allowing the appeal and deleting the addition without proper examination of the facts. The Court noted that the assessee failed to reconcile the discrepancies before the Assessing Officer and the CIT(A). The Tribunal, by examining documents produced for the first time and concluding the expenditure was genuine, did not follow the correct procedure. The Court stated that the Tribunal should have either called for a remand report from the Assessing Officer based on the new documents or remanded the matter to the Assessing Officer for fresh consideration. Since the Tribunal did neither and granted relief directly, the High Court disagreed with the Tribunal's procedure. Consequently, the appeal filed by the Revenue was allowed, the impugned order of the ITAT was set aside, and the matter was remanded to the Assessing Officer for fresh consideration. The High Court explicitly stated that it had not rendered any finding on the merits of the matter.

The High Court allowed the appeal, modifying the order of the ITAT. The Court held that the remand should not have been restricted by the ITAT. The observations and restrictions placed by the ITAT in paragraph 11 of its order were vacated. The matter was remitted back to the Assessing Officer for a fresh consideration in accordance with law, with an opportunity for the assessee to present all supporting materials and decisions. Consequently, the substantial questions of law framed at the time of admission were left open. The operative direction was to set aside the restrictive part of the ITAT's order and remand the case to the AO for de novo consideration.