Mr.mukundan Vijayan v. The Income Tax Officer, Corporate Ward 1 (1) Chennai – 34

IN THE HIGH COURT OF JUDICATURE AT MADRAS THE HONOURABLE MR.JUSTICE T.S.SIVAGNANAMandTHE HONOURABLE MRS.JUSTICE V.BHAVANI SUBBAROYAN T.C.A.No.73 of 2018 Mr.Mukundan Vijayan ..AppellantVersus The Income Tax Officer,Corporate Ward 1 (1)Chennai – 34. ..Respondent Prayer:- Tax Case Appeal filed under Section 260-A of the IncomeTax Act, 1961, against the order of the Income Tax AppellateTribunal, Madras 'D' Bench, dated 22.11.2017 made inI.T.A.No.639/MDS/2017 relating to the Assessment Year 2007-08.Appeal the order dated 13.01.2017 made in ITA 143/CIT(A)-1/15-16on the file of the Commissioner of Income Tax (Appeals)-1Chennai for the assessment year 2007-2008. Appeal against the order dated 25.03.2015 made in PANNO.AAOPM6199G on the file of the Income Tax Officer CorporateWard-1(1) Chennai for the assessment year 2007-2008. This appeal has been filed by the assessee under Section 260A of the Income Tax Act, 1961 ('the Act' for brevity), isdirected against the order dated 22.11.2017 passed by the IncomeTax Appellate Tribunal, Chennai, 'D' Bench ('the Tribunal' forbrevity) in I.T.A.No.639/MDS/2017 for the Assessment Year 2007-08. The appeal was admitted on 30.01.2018 on the followingSubstantial Questions of Law:“1. Whether the provisions of Section 2(22)(e) ofthe Income Tax Act, 1961, can be attracted in the https://hcservices.ecourts.gov.in/hcservices/ absence of any amount being transferred from a companyto its shareholder? 2. Whether, in the absence of any actual amountbeing transferred from a company to its shareholder, amere entry in the books of such company can constitutepayment by way of advance or loan within the meaningof Section 2(22)(e) of the Income Tax Act, 1961? 3. Whether an entry made in the books of acompany, in and of itself, can constitute payment ofdividend to a shareholder within the meaning ofSection 2(22)(e) of the Income Tax Act, 1961? 4. Whether an admission by a company that noactual loan was extended to its shareholder ought tonegate a finding that a payment was made within themeaning of Section 2(22)(e) of the Income Tax Act,1961 by the company to such a shareholder?” 2. We have heard Mr.Suhrith Parthasarathy, learned counselappearing for the appellant and Mr.T.Ravikumar, learned SeniorStanding counsel and M/s.R.Hemalatha, learned Senior Standingcounsel for the respondents. 3. It may not be necessary for this Court to decide theSubstantial 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. In terms of the said Act, the assessee has been given anoption to put an end to the tax disputes, which may be pendingat different levels either before the First Appellate Authorityor before the Tribunal or before the High Court or before theHon'ble Supreme Court of India. Under Section 2(j) “disputedtax” has been defined. In terms of Section 3, where a declarantmeans a person, who files a declaration under Section 4 on orbefore the last date files a declaration to the designatedauthority in accordance with the provisions of Section 4 inrespect of tax arrears, then, notwithstanding anythingcontained in the Income Tax Act or any other law for the timebeing in force, the amount payable by the declarant shall bedetermined in terms of Section 3(a-c) thereunder. 4. In terms of the said Act, the assessee has been given anoption to put an end to the tax disputes, which may be pendingat different levels either before the First Appellate Authorityor before the Tribunal or before the High Court or before theHon'ble Supreme Court of India. Under Section 2(j) “disputedtax” has been defined. In terms of Section 3, where a declarantmeans a person, who files a declaration under Section 4 on orbefore the last date files a declaration to the designatedauthority in accordance with the provisions of Section 4 inrespect of tax arrears, then, notwithstanding anythingcontained in the Income Tax Act or any other law for the timebeing in force, the amount payable by the declarant shall bedetermined in terms of Section 3(a-c) thereunder. 5. The First Proviso to Section 3 states that in case, wherean Appeal or Writ Petition or Special Leave Petition is filed bythe Income Tax authority on any issue before the AppellateForum, the amount payable shall be one-half of the amount in thetable stipulated in Section 3 calculated on such issue, in such https://hcservices.ecourts.gov.in/hcservices/ a manner as may be prescribed. The second proviso deals with thecases, where the matter is before the Commissioner (Appeals) orbefore the Dispute Resolution Panel. The third proviso dealswith cases, where the issue is pending before the Income TaxAppellate Tribunal. The filing of the declaration is as perSection 4 of the Act and the particulars to be furnished arealso mentioned in the Sub Sections of Section 4. Section 5 ofthe Act deals with the time and manner of the payment andSection 6 deals with Immunity from initiation of proceedings inrespect of offence and imposition of penalty in certain cases.Section 9 of the Act deals with cases, where the Act 3 of 2020will not be applicable. 6. We are informed by the learned counsel for theappellant/assessee that the assessee has already filed thedeclaration under Section 4 of the Act on 25.09.2020 and hasalso remitted the tax in terms of the computation to be doneunder the said Act and they are awaiting the orders from theDepartment. 7. In the light of the fact that the assessee has alreadyavailed the benefit under the Act, no useful purpose would beserved in keeping this appeal 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 Tax Case Appeal stands disposedof on the ground that the assessee has already filed adeclaration and remitted the tax and the Department shallprocess the application at the earliest in accordance with thesaid Act and communicate the decision to the assessee at theearliest. As observed, the assessee is given liberty to restorethis appeal in the event the ultimate decision to be taken onthe declaration filed by the assessee under Section 4 of thesaid Act is not in favour of the assessee. If such a prayer ismade, the Registry shall entertain the prayer without insistingupon any application to be filed for condonation of delay inrestoration of the appeal and on such request made by theassessee by filing a Miscellaneous Petition for Restoration, theRegistry shall place such petition before the Division Bench fororders. 8. With this observation, the Tax Case Appeal standsdisposed of with the aforementioned liberty. No costs. Sd/- Assistant Registrar //True Copy// Sub Assistant Registrar To 1.The Income Tax Appellate Tribunal, 'D' Bench, Chennai. 'D' Bench, Chennai. 2.The Commissioner of Income Tax(Appeals)-1, Chennai. Chennai. 3.The Income Tax Officer, Corporate Ward-1(1), Chennai. Corporate Ward-1(1), Chennai. +1cc to Mr.T.Ravikumar, Advocate, S.R.No.34004 T.C.A.No.73 of 2018RSV(CO)RV(19/11/2020)