M/S.gee Gee Holdings P. Ltd., Old v. The Income Tax Officer, Company Ward – Ii (1), Chennai

IN THE HIGH COURT OF JUDICATURE AT MADRAS THE HON'BLE MR.JUSTICE M. DURAISWAMYANDTHE HON'BLE MRS.JUSTICE R.HEMALATHA M/s.Gee Gee Holdings P. Ltd.,Old No.31, New No.6,Dr.Radhakrishnan Salai 9[th] Street,Mylapore, Chennai – 600 004.... AppellantVs. The Income Tax Officer,Company Ward – II (1),Chennai.... Respondent Appeal filed under Section 260A of the Income Tax Act, 1961against the order of the Income Tax Appellate Tribunal, Madras"B" Bench, dated 12.01.2018 passed in M.P.No.153/Mds/2017(I.T.A.No.775/Chny/2013) for the assessment year 2008-09,preferred against the order passed by the Commissioner of IncomeTax(Appeals)-I, Coimbatore dated 07.01.2013 made in AppealNo.569/10-11 preferred against the order passed by the AssistantCommissioner of Income Tax, Company Circle-II(2), Chennai, dated16.12.2010 for the assessment year 2008-09. The appeal filed by the assessee under Section 260A of theIncome Tax Act, 1961 ('the Act' for brevity) is directed againstthe order dated 12.01.2018 passed by the Income Tax AppellateTribunal "B" Bench, Chennai ('the Tribunal' for brevity) inM.P.No.153/Mds/2017 (I.T.A.No.775/Chny/2013) for the assessmentyear 2008-09. https://hcservices.ecourts.gov.in/hcservices/ 2.The appellant has raised the following SubstantialQuestions of Law in the grounds of appeal: “1)Whether the provisions of Section 254(2) ofthe Income Tax Act, 1961 envisage the power for theIncome Tax Appellate Tribunal to recall their earlierorder despite the power vested therein is limited tocorrecting the mistake apparent from record? 2)Whether the recall of the earlier order dated26.05.2016 in the impugned order dated 12.01.2018 onthe presumption of non-consideration of two issueswhich according to the appellant establishedperversity in view of the absence of specific groundsof appeal in the statutory Form No.36 filed by theRevenue before the Income Tax Appellate Tribunal? 3)Whether the Appellate Tribunal was right inentertaining the issue of assessment of Rs.75,00,000/-despite the absence of ground of appeal forming partof the statutory Form No.36 filed by the Revenue andaccepted by the departmental representative during thecourse of the hearing of the appeal on 01.10.2019 inview of the challenge of the recall order dated12.01.2018 in the present appeal? 4)Whether the Appellate Tribunal was within itsjurisdiction in adjudicating an issue on meritsdespite an endorsement given by the Departmentalrepresentative for not raising a ground on an issue inthe capacity of the appellant before them? 5)Whether the Appellate Tribunal was correct inaccepting the stand of the respondent/the AssessingOfficer in bringing to tax Rs.75,00,000/- being thepart of the arbitration award amount which amount wasarising from the arbitration award dated 08.04.2006proving the sterilisation of source of income whilefortifying the stand of the appellant Company ontreating such sum as capital receipt in view of thechallenge of the recall order dated 12.01.2018 in thepresent appeal? 6)Whether the Appellate Tribunal was right inholding that the income of Rs.75,00,000/- had accruedduring the assessment year under consideration despitethe accepted position of the arbitration award dated08.04.2006 falling within the assessment year 2007-08while overlooking law declared consistently by theSupreme Court on the principles of accrual accountingin view of the challenge of the recall order dated12.01.2018 in the present appeal? 7) Whether the Appellate Tribunal is correct inconfirming the assessment of notional interest as partof the taxable total income pertaining to the belatedreceipt of arbitration award amount in defying theprinciples of real income theory in view of thechallenge of the recall order dated 12.01.2018 in thepresent appeal?” 3.We have heard Mr.M.Kaushik, learned counsel for theappellant/ assessee and Mr.Karthick Ranganathan, learned SeniorStanding Counsel for the respondent/Revenue. 7) Whether the Appellate Tribunal is correct inconfirming the assessment of notional interest as partof the taxable total income pertaining to the belatedreceipt of arbitration award amount in defying theprinciples of real income theory in view of thechallenge of the recall order dated 12.01.2018 in thepresent appeal?” 3.We have heard Mr.M.Kaushik, learned counsel for theappellant/ assessee and Mr.Karthick Ranganathan, learned SeniorStanding Counsel for the respondent/Revenue. 4.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. 5.We are informed by the learned counsel for the appellant/assessee that the assessee had already been issued with Form – 3on 02.03.2021 and the learned counsel for the appellant seekspermission of this Court to withdraw the appeal. 6.In view of the submission made by the learned counsel forthe appellant, the Tax Case Appeal stands dismissed aswithdrawn. No costs. Sd/- Assistant Registrar //True Copy// Sub Assistant Registrar va To 1. Income Tax Appellate Tribunal, Madras "B" Bench 2. The Income Tax Officer, Company Ward – II (1), Chennai. Company Ward – II (1), Chennai. 3. The Deputy Commissioner of Income Tax, Corporate Circle-2(1), Chennai Corporate Circle-2(1), Chennai 4.The Commissioner of Income Tax(Appeals-I) Coimbatore. Coimbatore. 5.The Assistant Commissioner of Income Tax, Company Circle-II(2), Nungambakkam, Chennai 34 Company Circle-II(2), Nungambakkam, Chennai 34 +1cc to Mr.S.Sridhar, Advocate, S.R.No.22350 Tax Case Appeal No.240 of 2021PM(CO)KM(29/04/2021)