Principal Commissioner Of Income Tax v. Shri C.Kishanlal

IN THE HIGH COURT OF JUDICATURE AT MADRAS

DATED : 22.12.2020

CORAM

THE HONOURABLE MR.JUSTICE T.S.SIVAGNANAM and THE HONOURABLE MRS.JUSTICE V.BHAVANI SUBBAROYAN T.C.A.No.365 of 2019 Principal Commissioner of Income Tax, Central I, No.108, Mahatma Gandhi Road, Chennai - 600 034.

... Appellant/Respondent

Versus

Shri.C.Kishanlal ... Respondent/Appellant Prayer:- This Tax Case Appeal filed under Section 260 A of the Income Tax Act, 1961 against the order of the Income Tax Appellate Tribunal, ''C'' Bench, Chennai dated 20.12.2018 passed in I.T.A.No.2928/Chny/2017. relating to the Assessment Year 2006-07, against the order of The Commissioner of Income Tax (Appeals)-19, 108, Mahathma Gandhi Road, Nungambakkam, Chennai34, dated 11.10.2017 in ITA No.87/14-15 and against the Assessment order of The Deputy Commissioner of Income-Tax, Central Circle-III(3), Chennai-34 dated 27/3/14 in PAN/GIR No.AAKPK7263K relating to the Assessment Year 2006-2007. For Appellant : Mr.T.R.Senthilkumar Senior Standing counsel For Respondent : Mr.R.Sivaraman

JUDGMENT

[Order of the Court was made by T.S.SIVAGNANAM, J.] This appeal has been filed by the Revenue under Section 260 A of the Income Tax Act, 1961 ('the Act' for brevity), is directed against the order dated 20.12.2018 passed by the Income Tax Appellate Tribunal 'C' Bench, Chennai ('the Tribunal' for brevity) in I.T.A.No.2928/Chny/2017 for the Assessment Year 2006-07. The Revenue has raised the following Substantial Questions of Law for consideration:

"1. Whether on the facts and in the circumstances of the case, the ITAT was right in

law in deleting the additions made towards income from undisclosed sources, by giving findings which are not backed by evidence and such an order is not perverse?

2. Whether on the facts and in the circumstances of the case, the Hon'ble Tribunal was legally justified in deleting the additions made towards income from undisclosed sources, by drawing conclusion, such as, that the assessee had sold gold jewellery in cash in a span of two months for a whopping amount of Rs.3,14,93,768/- to persons whose names or addresses have not been furnished by the assessee, which cannot be drawn by any reasonable person on the materials placed before the ITAT"

2. We have heard T.R.Senthilkumar, learned Senior Standing counsel for the appellant/Revenue and Mr.R.Sivaraman, learned counsel for the respondent/assessee.

3. 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.

4. In terms of the said Act, the assessee has been given an option to put an end to the tax disputes, which may be pending at different levels either before the First Appellate Authority or before the Tribunal or before the High Court or before the Hon'ble Supreme Court of India. Under Section 2(j) "disputed tax" has been defined. In terms of Section 3, where a declarant means a person, who files a declaration under Section 4 on or before the last date files a declaration to the designated authority in accordance with the provisions of Section 4 in respect of tax arrears, then, notwithstanding anything contained in the Income Tax Act or any other law for the time being in force, the amount payable by the declarant shall be determined in terms of Section 3(a-c) thereunder.

5. The First Proviso to Section 3 states that in case, where an Appeal or Writ Petition or Special Leave Petition is filed by the Income Tax authority on any issue before the Appellate Forum, the amount payable shall be one-half of the amount in the table stipulated in Section 3 calculated on such issue, in such

a manner as may be prescribed. The second proviso deals with the cases, where the matter is before the Commissioner (Appeals) or before the Dispute Resolution Panel. The third proviso deals with cases, where the issue is pending before the Income Tax Appellate Tribunal. The filing of the declaration is as per Section 4 of the Act and the particulars to be furnished are also mentioned in the Sub Sections of Section 4. Section 5 of the Act deals with the time and manner of the payment and Section 6 deals with Immunity from initiation of proceedings in respect of offence and imposition of penalty in certain cases. Section 9 of the Act deals with cases, where the Act 3 of 2020 will not be applicable.

6. We are informed by the learned counsel for the respondent/assessee that the assessee has already filed the declaration under Section 4 of the Act.

7. 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 a declaration 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.

8. With this observation, the Tax Case Appeal stands disposed of with the aforementioned liberty and Consequently, the Substantial Questions of Law are left open. No costs. Sd/- Assistant Registrar(CS II) //True Copy// Sub Assistant Registrar

Kak To 1.The Income Tax Appellate Tribunal, 'C' Bench, Chennai.

2.The Commissioner of Income -Tax, (Appeals)-19, 108, Mahatma Gandhi Road, Nungambakkam, Chenani-34.

3.The Deputy Commissioner of Income-Tax, Central Circle-III(3), Chennai-34.

Copy to The Assistant Registrar, AE (Main) Section, High Court, Madras.

+1cc to Mr.T.R.Senthilkumar, Advocate Sr.42455 T.C.A.No.365 of 2019 sr II[co] srg 19/01/2021