Commissioner Of Income Tax Iii, Chennai v. M/S.samalpatti Power Co (P) Ltd., Sreyas Virat

IN THE HIGH COURT OF JUDICATURE AT MADRASDATED : 31.03.2021 CORAMTHE HON'BLE MR. JUSTICE M. DURAISWAMYANDTHE HON'BLE MRS. JUSTICE T.V. THAMILSELVITax Case Appeal Nos.198 and 199 of 2013 Commissioner of Income Tax III,Chennai. ...Appellant in both appealsVs. M/s.Samalpatti Power Co (P) Ltd.,Sreyas Virat, No.14, III Cross Street,R A Puram, Chennai – 600 028. ... Respondentin both appeals Tax Case Appeals in T.C.A. Nos.198 and 199 of 2013 filedunder Section 260A of the Income Tax Act, 1961 against the orderof the Income Tax Appellate Tribunal, Madras “A” Bench, dated30.07.2012, passed in I.T.A.Nos.382/Mds/2011 and 383/Mds/2011respectively for the Assessment year 2006-07 and 2007-08 againstthe order of the Commissioner of Income Tax(Appeals)-V, Chennaimade in ITA.No.443 and 442 of 2008-09 and 450/2009-10, dated25/11/2010 against the assessment order of the AssistantCommissioner of Income Tax Company Circle VI(I), Chennai, dated31/12/2009 made in PAN. for the Assessment year2007-08 against the Assessment order of the AssisantCommissioner of Income Tax, Company Circle VI(I), Chennai, madein PAN : , dated 30/12/2008 for the Assessment order2006-07. The above appeals filed by the Department under Section260A of the Income Tax Act, 1961 ('the Act' for brevity), aredirected against the order dated 30.07.2012 passed by the IncomeTax Appellate Tribunal, Madras “A” Bench, Chennai ('theTribunal' for brevity) in I.T.A.Nos.382/Mds/2011 and https://hcservices.ecourts.gov.in/hcservices/ 383/Mds/2011 for the Assessment Years 2006-07 and 2007-08respectively. The above appeals were admitted on 16.09.2013 onthe following substantial questions of law : “1.Whether under the facts and circumstances ofthe case, the Income Tax Appellate Tribunal wascorrect in entertaining the claim for deduction ofprovision for rebate and other receivables amountingto Rs.15,59,85,460/- though the assessee did not raisethat issue before the assessing officer and theCommissioner of Income Tax (Appeals) and the claim nothaving been made through a valid return of income? 2.Whether under the facts and circumstances ofthe case, the Income Tax Appellate Tribunal was rightin holding that the provision for rebate and otherreceivables debited by the assessee to its profit andloss account is only a provision and not written offand therefore is not allowable as deduction incomputing income under normal provisions of the IncomeTax Act? 3.Whether under the facts and circumstances ofthe case, the Income Tax Appellate Tribunal was rightin remitting the issue back to the assessing officerwith regard to the claim for deduction of provisionfor rebate though the Tamil Nadu Electricity Board(TNEB) is liable to pay under the contractualobligations and that the assessee had not issued anycredit note even though TNEB did not pay the same? 4.Whether under the facts and circumstances ofthe case, the Income Tax Appellate Tribunal was rightin remitting the issue back to the assessing officerwith regard to the claim for deduction of provisionfor auxiliary consumption and dividend distributiontax holding that the same are credited on actual basisand not on adhoc basis? 5.Whether under the facts and circumstances ofthe case, the Tribunal was right in deleting interestunder Section 234B ad 234C are not to be levied on theadditional tax payable on account of retrospectiveamendment to Section 115 JB, in the absence of anyprovision for exclusion of levy of interest in suchcircumstances?” 2. We have heard Mr.J.Narayanaswamy, learned Senior StandingCounsel for the appellant/ Revenue and Ms.Sri NiranjaniSrinivasan, learned Counsel for the respondent/assessee. 3. It may not be necessary for this Court to decide the 5.Whether under the facts and circumstances ofthe case, the Tribunal was right in deleting interestunder Section 234B ad 234C are not to be levied on theadditional tax payable on account of retrospectiveamendment to Section 115 JB, in the absence of anyprovision for exclusion of levy of interest in suchcircumstances?” 2. We have heard Mr.J.Narayanaswamy, learned Senior StandingCounsel for the appellant/ Revenue and Ms.Sri NiranjaniSrinivasan, 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 accountof certain subsequent developments. The Government of Indiaenacted the Direct Tax Vivad Se Vishwas Act, 2020 (Act 3 of2020) to provide for resolution of disputed tax and for mattersconnected therewith or incidental thereto. The Act of theParliament received the assent of the President on 17[th] March2020 and published in the Gazette of India on 17[th] March 2020. 4. We are informed by the learned counsel for therespondent/assessee that the assessee has already filed therequisite Forms 1 & 2 on 29.01.2021 under Section 4 of the Act. 5. In the light of the fact that the assessee has alreadyavailed the benefit under the Act, no useful purpose would beserved in keeping these appeals pending. At the same time,safeguarding the interest of the assessee in the event the orderto be passed by the Department under the Act is not in favour ofthe assessee. Accordingly, the above Tax Case Appeals standdisposed of on the ground that the assessee has already filedthe requisite Forms 1 & 2 and the Department shall process theapplication at the earliest in accordance with the said Act andcommunicate the decision to the assessee at the earliest. Asobserved, the assessee is given liberty to restore the aboveappeals in the event the ultimate decision to be taken on thedeclaration filed by the assessee under Section 4 of the saidAct is not in favour of the assessee. If such a prayer is made,the Registry shall entertain the prayer without insisting uponany application to be filed for condonation of delay inrestoration of the appeals and on such request made by theassessee by filing a Miscellaneous Petition for Restoration, theRegistry shall place such petition before the Division Bench fororders. 6. With this observation, the above Tax Case Appeals standdisposed of with the aforementioned liberty and consequently,the substantial questions of law are left open. No costs. Sd/- Assistant Registrar(CS VII) //True Copy// Sub Assistant Registrar To 1.The Income Tax Appellate Tribunal, Madras “A” Bench 2.The Commissioner of Income Tax III,Chennai. 3.The Assistant Commissioner of Income Tax,Company Circle VI(I), Chennai -34. 4.The Commissioner of Income Tax(Appeals)-V,Chennai. +1cc to Mr.N.Muthukumar, Advocate SR.NO..20869 AKM/28.04.21/4P- 6C/ Tax Case Appeal Nos.198 & 199 of 201331.03.2021