R.lakshminarayanamoorthy v. The Commissioner Of Income Tax, Coimbatore

IN THE HIGH COURT OF JUDICATURE AT MADRAS CORAM THE HONOURABLE MR.JUSTICE T.S.SIVAGNANAMandTHE HONOURABLE MRS.JUSTICE V.BHAVANI SUBBAROYAN T.C.A.No.254 of 2018 R.Lakshminarayanamoorthy... Appellant/AppellantVersus The Commissioner of Income Tax,Coimbatore.. Respondent/Respondent Prayer:- Tax Case Appeal filed under Section 260-A of the IncomeTax Act, 1961, against the order of the Income Tax AppellateTribunal, Madras 'A' Bench, Chennai, dated 12.04.2017 made inI.T.A.No.3408/Mds/2016 relating to the Assessment Year 2010-2011. Appeals against the Deputy Assistant Registrar Income TaxAppellate Tribunal, Chennai in ITA.No. 3408 dated 12.04.2017against the Commissioner of Income Tax Appeals I Coimbatoredated 30.09.2016 in Appeal No. 177/15-16/R Assesment Year 2010-2011. For Appellant: Mr.T.N.Seetharaman for Mr.R.KumarFor Respondent: Mr.T.R.Senthilkumar Senior Standing counsel and Mrs.K.G.Usharani J U D G M E N T [Judgment of the Court was made by T.S.SIVAGNANAM, J.] This appeal has been filed by the assessee under Section260 A of the Income Tax Act, 1961 ('the Act' for brevity),challenging the order dated 12.04.2017 passed by the Income TaxAppellate Tribunal, Chennai, 'A' Bench ('the Tribunal' forbrevity) in I.T.A.No.3408/Mds/2016 for the Assessment Year 2010-2011. The appeal was admitted on 19.06.2018 on the followingSubstantial Question of Law: (i) Whether the Appellate Tribunal is right inlaw in holding that the amounts received by theappellant from the company Chroma Print (India) Pvt. https://hcservices.ecourts.gov.in/hcservices/ Ltd., for whose credit limits from the Bank theappellant had mortgaged all his properties ascollateral security and furnished a personalguarantee, are exigible to tax as "deemed divident"within the meaning of section 2(22)(e) of the IncomeTax Act, 1961?" 2. We have heard Mr.T.N.Seetharaman, learned counsel forMr.R.Kumar, learned counsel appearing for the appellant/assesseeand Mr.T.R.Senthilkumar, learned Senior Standing counsel andMrs.K.G.Usharani, learned counsel for the respondent/Revenue. 3. The learned counsel for the appellant / assessee, oninstructions, submitted that the appellant / assessee intends toavail the benefit of Vivad Se Vishwas Scheme ('VVS Scheme' forbrevity) and in this regard, the assessee had filed theapplication / declaration in Form No.I on 07.11.2020. 4. It may not be necessary for this Court to decide theSubstantial Question 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. In terms of the said Act, the assessee has been givenan option to put an end to the tax disputes, which may bepending at different levels either before the First AppellateAuthority or before the Tribunal or before the High Court orbefore the Hon'ble Supreme Court of India. Under Section 2(j)“disputed tax” has been defined. In terms of Section 3, where adeclarant means a person, who files a declaration under Section4 on or before the last date files a declaration to thedesignated authority in accordance with the provisions ofSection 4 in respect of tax arrears, then, notwithstandinganything contained in the Income Tax Act or any other law forthe time being in force, the amount payable by the declarantshall be determined in terms of Section 3(a-c) thereunder. 6. The First Proviso to Section 3 states that in case,where an Appeal or Writ Petition or Special Leave Petition isfiled by the Income Tax authority on any issue before theAppellate Forum, the amount payable shall be one-half of theamount in the table stipulated in Section 3 calculated on suchissue, in such a manner as may be prescribed. The second provisodeals with the cases, where the matter is before theCommissioner (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 thedeclaration is as per Section 4 of the Act and the particularsto be furnished are also mentioned in the Sub Sections ofSection 4. Section 5 of the Act deals with the time and mannerof the payment and Section 6 deals with Immunity from initiationof proceedings in respect of offence and imposition of penaltyin certain cases. Section 9 of the Act deals with cases, wherethe Act 3 of 2020 will not be applicable. 7. As observed, the assessee is given liberty to restorethis appeal in the event the ultimate decision to be taken onthe declaration to be filed by the assessee under Section 4 ofthe said Act is not in favour of the assessee. If such a prayeris made, the Registry shall entertain the prayer withoutinsisting upon any application to be filed for condonation ofdelay in restoration of the appeal and on such request made bythe assessee by filing a Miscellaneous Petition for Restoration,the Registry shall place such petition before the Division Benchfor orders. 8. In the light of the above, We direct the competentauthority to process the application / declaration in accordancewith the Act and pass appropriate orders as expeditiously aspossible preferably within a period of six (6) weeks from thedate on which the declaration is filed in the proper form. 9. With this direction, the Tax Case Appeal standsdisposed of with the aforementioned liberty and Consequently,the Substantial Question of Law is left open. No costs.Sd/-Assistant Registrar //True Copy//Sub Assistant Registrar ssd To 1.The Income Tax Appellate Tribunal, 'A' Bench, Chennai. 'A' Bench, Chennai. 2.The Commissioner of Income Tax, Coimbatore. Coimbatore. 3.The Deputy Assistant Registrar, Income Tax Appellate Tribunal, Chennai. 4.The commissioner of Income Tax – Appeals, I Coimbatore. I Coimbatore. +1cc to Mr.T.R.Senthilkumar, Advocate, S.R.No. 36523 T.C.A.No.254 of 2018 PVS(CO)GN(29/12/2020)