“T.c.a v. Ito [Reported In 357 Itr 379] And Thedelhi High Court's Decision In The Case Of Cit Vs.zoom Communication (P) Ltd. [Reported In 327 Itr 510]?“T.c.a

IN THE HIGH COURT OF JUDICATURE AT MADRAS CORAM THE HONOURABLE MR.JUSTICE T.S.SIVAGNANAMandTHE HONOURABLE MRS.JUSTICE V.BHAVANI SUBBAROYAN Principal Commissioner of Income TaxCentral 1No.108, Nungambakkam High Road Chennai – 600 034 ..Appellant/Appellant in both TCAs Shri.S.Martin ..Respondent/Respondent in both TCAs Common Prayer:- Tax Case Appeals filed under Section 260-A ofthe Income Tax Act, 1961, against the order of the Income TaxAppellate Tribunal, Madras 'C' Bench, Chennai, dated 05.10.2018made in I.T.A.No.2382/Chny/2016 and I.T.A.No.3146/Chny/2017relating to the Assessment Years 2009-10 and 2015-16respectively. against the Order of the Commissioner of IncomeTax (Appeals)-18, Chennai -34, made in ITA No.926/2015-16dated:27.09.2017 against the Order of the Deputy Commissioner ofIncome Tax, Company Circle-I(3), Coimbatore made in PAN/GIRNo. dated 30.12.2011 and Assistant Commissioner ofIncome Tax Central Circl-2, Coimbatore made in PAN/GIRNo.AEWPM37039 dated 31.12.2016 for the Assessment year 2009-10and 2015-16 respectively. These appeals have been filed by the Revenue under Section260 A of the Income Tax Act, 1961 ('the Act' for brevity),challenging the order dated 05.10.2018 passed by the Income TaxAppellate Tribunal, Chennai, 'C' Bench ('the Tribunal' forbrevity) in I.T.A.No.2382/Chny/2016 and I.T.A.No.3146/Chny/2017 https://hcservices.ecourts.gov.in/hcservices/ for the Assessment Years 2009-10 and 2015-16 respectively. Theappeals were admitted on 29.07.2019 on the following SubstantialQuestions of Law for consideration: “T.C.A.No.526 of 2019: i. Whether the Appellate Tribunal is correct inlaw upholding the deletion of penalty levied underSection 271(1)(c) of Rs.22,75,34,990/- when theassessee deliberatelyandwilfully furnishedinaccurate particulars to the Assessing Officer?ii. Whether the Appellate Tribunal is right inlaw in not taking cognizance of the Hon'ble ApexCourt's decision in the case of Dilip N.Shroff vs.JCIT [reported in 291 ITR 519] wherein the term'inaccurate particulars of income' was explained? Andiii. Whether the Appellate Tribunal was legallycorrect in not appreciating that the assessee's claimof deductions not being bona fide, penalty underSection 271(1)(c) gets attracted as held by the MadrasHigh Court's decision in the case of Sharma Alloys(India) Ltd. Vs. ITO [reported in 357 ITR 379] and theDelhi High Court's decision in the case of CIT Vs.Zoom Communication (P) Ltd. [reported in 327 ITR 510]?“T.C.A.No.527 of 2019: i. Whether the Tribunal is correct in law inupholding the deletion of penalty of Rs.15 Croreslevied under Section 271AAB of the Income Tax Act onthe ground that the offer of Rs.50 Crores by theassessee, during the course of search, was only'additional income' and not 'undisclosed income'? ii. Whether the Tribunal is correct in law inholding that during the course of search, thetransactions that gave rise to income assessable underthe head 'other sources', which were not recorded inthe books of account, which invited application ofSection 271AAB of the Income Tax Act? And iii. Whether the Appellate Tribunal was correctin importing the definition of 'undisclosed income'from Section 158B(b) of the Act on the premise thatthe term 'undisclosed income' has not been defined inSection 271AAB, when actually there is a definition ofthe said term given in Clause (c) of the Explanationto Section 271AAB?” 2. We have heard Mr.T.R.Senthilkumar, learned Senior counselappearing for the appellant/Revenue and Mr.A.S.Sriram, learnedcounsel for the respondent/assessee. https://hcservices.ecourts.gov.in/hcservices/ iii. Whether the Appellate Tribunal was correctin importing the definition of 'undisclosed income'from Section 158B(b) of the Act on the premise thatthe term 'undisclosed income' has not been defined inSection 271AAB, when actually there is a definition ofthe said term given in Clause (c) of the Explanationto Section 271AAB?” 2. We have heard Mr.T.R.Senthilkumar, learned Senior counselappearing for the appellant/Revenue and Mr.A.S.Sriram, learnedcounsel for the respondent/assessee. https://hcservices.ecourts.gov.in/hcservices/ 3. The learned counsel for the respondent / assessee, oninstructions, submitted that the respondent / assessee intendsto avail the benefit of Vivad Se Vishwas Scheme ('VVS Scheme'for brevity) and in this regard, the assessee is taking steps tofile the application / declaration in Form No.I. 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. 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. 6. 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 sucha 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. 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 of https://hcservices.ecourts.gov.in/hcservices/ the 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. 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 of https://hcservices.ecourts.gov.in/hcservices/ the 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 respondent /assessee to file the Form No.I on or before 09.11.2020 and thecompetent authority shall process the application / declarationin accordance with the Act and pass appropriate orders asexpeditiously as possible preferably within a period of six (6)weeks from the date on which the declaration is filed in theproper form. 3.The Deputy Commissioner of Income Tax,Company Circle-I(3), Coimbatore. 4.The Assistant Commissioner of Income Tax,Central Circle-2, Coimbatore. NMI(CO)RV(18/11/2020)