S.manoharan v. The Assistant Commissioner Of Income Tax, Central Circle – Ii, Madurai

IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 22.12.2020 CORAM THE HONOURABLE MR.JUSTICE T.S.SIVAGNANAMand THE HONOURABLE MRS.JUSTICE V.BHAVANI SUBBAROYAN T.C.A.Nos.403 to 408 of 2015 S.Manoharan .. Appellant in all TCAsVersus The Assistant Commissioner of Income Tax,Central Circle – II,Madurai. .. Respondent in all TCAs Prayer in T.C.A.No.403 of 2015:- Tax Case Appeal filed underSection 260A of the Income Tax Act, 1961, against the commonorder of the Income Tax Appellate Tribunal, 'A' Bench, Chennai,in I.T.A.No.337/Mds/2014 dated 28.08.2014 and is filed tochallenge the action of the Income Tax Appellate Tribunal indismissing the appeal mainly relating to the grounds raised tochallenge the sustenance of the penalty imposed u/s 271(1)(c) ofthe Act after the confirmation of the addition (s) in thecomputation of taxable total income forming part of theassessment framed u/s 143(3) r/w Section 153(A) of the Actrelating to the Assessment Year 2002-03, Appeal filed againstthe order of the Commissioner of Income Tax (Appeals)-I,Madurai, made in ITA.No.28/2012-13 order dated 07.01.2014 andpreferred against the order of the Assistant Commissioner ofIncome Tax, Central Circle -II, Madurai made inPAN.No.AITPM1981H/Cen.Cir.II/Mdu, order dated 11.06.2012 for theAssessment year 2002-03. Prayer in T.C.A.No.404 of 2015:- Tax Case Appeal filed underSection 260A of the Income Tax Act, 1961, against the commonorder of the Income Tax Appellate Tribunal, 'A' Bench, Chennai,in I.T.A.No.338/Mds/2014 dated 28.08.2014 and is filed tochallenge the action of the Income Tax Appellate Tribunal indismissing the appeal mainly relating to the grounds raised tochallenge the sustenance of the penalty imposed u/s 271(1)(c) ofthe Act after the confirmation of the addition (s) in thecomputation of taxable total income forming part of theassessment framed u/s 143(3) r/w Section 153(A) of the Actrelating to the Assessment Year 2004-05, Appeal filed againstthe order of the Commissioner of Income Tax (Appeals)-I, Madurai, made in ITA.No.23/2012-13 order dated 07.01.2014 andpreferred against the order of the Assistant Commissioner ofIncome Tax, Central Circle -II, Madurai made inPAN.No.AITPM1981H/Cen.Cir.II/Mdu, order dated 11.06.2012 for theAssessment year 2004-05. Prayer in T.C.A.No.405 of 2015:- Tax Case Appeal filed underSection 260A of the Income Tax Act, 1961, against the commonorder of the Income Tax Appellate Tribunal, 'A' Bench, Chennai,in I.T.A.No.339/Mds/2014 dated 28.08.2014 and is filed tochallenge the action of the Income Tax Appellate Tribunal indismissing the appeal mainly relating to the grounds raised tochallenge the sustenance of the penalty imposed u/s 271(1)(c) ofthe Act after the confirmation of the addition (s) in thecomputation of taxable total income forming part of theassessment framed u/s 143(3) r/w Section 153(A) of the Actrelating to the Assessment Year 2005-06, Appeal filed againstthe order of the Commissioner of Income Tax (Appeals)-I,Madurai, made in ITA.No.24/2012-13 order dated 07.01.2014 andpreferred against the order of the Assistant Commissioner ofIncome Tax, Central Circle -II, Madurai made inPAN.No.AITPM1981H/Cen.Cir.II/Mdu, order dated 11.06.2012 for theAssessment year 2005-06. Prayer in T.C.A.No.406 of 2015:- Tax Case Appeal filed underSection 260A of the Income Tax Act, 1961, against the commonorder of the Income Tax Appellate Tribunal, 'A' Bench, Chennai,in I.T.A.No.340/Mds/2014 dated 28.08.2014 and is filed tochallenge the action of the Income Tax Appellate Tribunal indismissing the appeal mainly relating to the grounds raised tochallenge the sustenance of the penalty imposed u/s 271(1)(c) ofthe Act after the confirmation of the addition (s) in thecomputation of taxable total income forming part of theassessment framed u/s 143(3) r/w Section 153(A) of the Actrelating to the Assessment Year 2006-07, Appeal filed againstthe order of the Commissioner of Income Tax (Appeals)-I,Madurai, made in ITA.No.25/2012-13 order dated 07.01.2014 andpreferred against the order of the Assistant Commissioner ofIncome Tax, Central Circle -II, Madurai made inPAN.No.AITPM1981H/Cen.Cir.II/Mdu, order dated 11.06.2012 for theAssessment year 2006-07. Prayer in T.C.A.No.407 of 2015:- Tax Case Appeal filed underSection 260A of the Income Tax Act, 1961, against the commonorder of the Income Tax Appellate Tribunal, 'A' Bench, Chennai,in I.T.A.No.341/Mds/2014 dated 28.08.2014 and is filed tochallenge the action of the Income Tax Appellate Tribunal indismissing the appeal mainly relating to the grounds raised tochallenge the sustenance of the penalty imposed u/s 271(1)(c) ofthe Act after the confirmation of the addition (s) in the computation of taxable total income forming part of theassessment framed u/s 143(3) r/w Section 153(A) of the Actrelating to the Assessment Year 2007-08, Appeal filed againstthe order of the Commissioner of Income Tax (Appeals)-I,Madurai, made in ITA.No.26/2012-13 order dated 07.01.2014 andpreferred against the order of the Assistant Commissioner ofIncome Tax, Central Circle -II, Madurai made inPAN.No.AITPM1981H/Cen.Cir.II/Mdu, order dated 11.06.2012 for theAssessment year 2007-08. Prayer in T.C.A.No.408 of 2015:- Tax Case Appeal filed underSection 260A of the Income Tax Act, 1961, against the commonorder of the Income Tax Appellate Tribunal, 'A' Bench, Chennai,in I.T.A.No.342/Mds/2014 dated 28.08.2014 and is filed tochallenge the action of the Income Tax Appellate Tribunal indismissing the appeal mainly relating to the grounds raised tochallenge the sustenance of the penalty imposed u/s 271(1)(c) ofthe Act after the confirmation of the addition (s) in thecomputation of taxable total income forming part of theassessment framed u/s 143(3) r/w Section 153(A) of the Actrelating to the Assessment Year 2008-09, Appeal filed againstthe order of the Commissioner of Income Tax (Appeals)-I,Madurai, made in ITA.No.27/2012-13 order dated 07.01.2014 andpreferred against the order of the Assistant Commissioner ofIncome Tax, Central Circle -II, Madurai made inPAN.No.AITPM1981H/Cen.Cir.II/Mdu, order dated 11.06.2012 for theAssessment year 2008-09. These appeals filed by the assessee under Section 260Aof the Income Tax Act, 1961 ('the Act' for brevity), isdirected against the common order dated 28.08.2014 passed bythe Income Tax Appellate Tribunal, 'A' Bench, Chennai ('theTribunal'forbrevity)inI.T.A.No.337/Mds/2014,I.T.A.No.338/Mds/2014,I.T.A.No.339/Mds/2014,I.T.A.No.340/Mds/2014,I.T.A.No.341/Mds/2014,I.T.A.No.342/Mds/2014 for the Assessment Years 2002-03, 2004-05, 2005-06, 2006-07, 2007-08 and 2008-09 respectively. Theseappeals were admitted on 07.09.2015 on the followingSubstantial Questions of Law:“T.C.A.Nos.403 to 408 of 2015: These appeals filed by the assessee under Section 260Aof the Income Tax Act, 1961 ('the Act' for brevity), isdirected against the common order dated 28.08.2014 passed bythe Income Tax Appellate Tribunal, 'A' Bench, Chennai ('theTribunal'forbrevity)inI.T.A.No.337/Mds/2014,I.T.A.No.338/Mds/2014,I.T.A.No.339/Mds/2014,I.T.A.No.340/Mds/2014,I.T.A.No.341/Mds/2014,I.T.A.No.342/Mds/2014 for the Assessment Years 2002-03, 2004-05, 2005-06, 2006-07, 2007-08 and 2008-09 respectively. Theseappeals were admitted on 07.09.2015 on the followingSubstantial Questions of Law:“T.C.A.Nos.403 to 408 of 2015: 1. Whether the Appellate Tribunal is correctin law in sustaining the levy of penalty under Section271(1)(c) of the Act consequent to the sustenance ofthe addition of Rs.5 Lakhs relating to the transactionentered into for and on behalf of Shri Lakshmana Iyerin an attempt to purchase the property for him in thecomputation of taxable total income forming part ofthe search assessment under consideration in spite oflack of statutory mandate to make such addition aswell as overlooking the evidence in the form ofconfirmation letter filed from the said person? And2. Whether the Tribunal is correct in law insustaining the action of the lower authorities inbringingtotaxthesaidamountasunexplained/unaccounted income of the appellant hereinwithout cross verification of the facts with theproperty owner as well as with Shri Lakshmana Iyer?” 2. We have heard Mr.K.G.Raghunath, learned counsel forthe appellant/assessee and Ms.V.Pushpa, learned Junior Standingcounsel for the respondent/Revenue. 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 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. 5. 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 the https://hcservices.ecourts.gov.in/hcservices/ amount 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 pendingbefore 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. amount 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 pendingbefore 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. 6. We are informed by the learned counsel for theappellant/assessee that the assessee has already filed thedeclaration under Section 4 of the Act. 7. 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, all the Tax Case Appeals standdisposed of on the ground that the assessee has already filed adeclaration and the Department shall process the application atthe earliest in accordance with the said Act and communicate thedecision to the assessee at the earliest. As observed, theassessee is given liberty to restore these appeals in the eventthe ultimate decision to be taken on the declaration filed bythe assessee under Section 4 of the said Act is not in favour ofthe assessee. If such a prayer is made, the Registry shallentertain the prayer without insisting upon any application tobe filed for condonation of delay in restoration of the appealsand on such request made by the assessee by filing aMiscellaneous Petition for Restoration, the Registry shall placesuch petition before the Division Bench for orders. 8. With this observation, all the Tax Case Appeals standdisposed of with the aforementioned liberty and Consequently,the Substantial Questions of Law are left open. No costs. Sd/-Assistant Registrar (C.S.IV) /True Copy/ Sub Assistant Registrar To 1.The Income Tax Appellate Tribunal,'A', Chennai. 2.The Commissioner of Income Tax (Appeals)-I,Madurai. 3.The Assistant Commissioner of Income Tax, Central Circle -II, Madurai. +1cc to Mr.M.Swaminathan, Advocate SR.NO.42837 AKM/18.02.21/6P- 5C/ T.C.A.Nos.403 to 408 of 201522.12.2020