Madras High Court
M/S.Ozone Projects Pvt. Ltd vs The Joint Commissioner Of Income on 15 December, 2020
Author: T.S.Sivagnanam
Bench: T.S.Sivagnanam
T.C.A.No.633 of 2019 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 15.12.2020 CORAM THE HONOURABLE MR.JUSTICE T.S.SIVAGNANAM and THE HONOURABLE MRS.JUSTICE V.BHAVANI SUBBAROYAN Tax Case Appeal No.633 of 2019 M/s.Ozone Projects Pvt. Ltd., Chennai-17 ...Appellant Vs The Joint Commissioner of Income Tax, Company Range-V, Chennai–34. ...Respondent APPEAL under Section 260A of the Income Tax Act, 1961 against the order of the Income Tax Appellate Tribunal, Madras 'D' Bench, Chennai, dated 27.7.2017 made in I.T.A.No.366/Mds/2017 for the assessment year 2011-12.
For Appellant : Mr.R.Sivaraman
For Respondent : Mr.T.Ravikumar, SSC
Judgment was delivered by T.S.SIVAGNANAM,J This appeal has been filed by the assessee under Section 260A of the Income Tax Act, 1961 ('the Act' for brevity) challenging the order dated 27.7.2017 made in I.T.A.No.366/Mds/2017 on the file of the 1/7 http://www.judis.nic.in T.C.A.No.633 of 2019 Income Tax Appellate Tribunal, Chennai, 'D' Bench ('the Tribunal' for brevity) for the assessment year 2011-12.
2. The appeal was admitted on 28.8.2019 on the following substantials question of law:
“1. Whether on the facts and in the circumstances of the case, the Tribunal was right in law in brushing aside the additional evidence filed by the Appellant under Rule 29 of the Income Tax (Appellate Proceedings) Rules, 1963 giving break up of allocation of expenses by the Holding Company to the Subsidiary Company admittedly when the agreement was looked on by the Assessing Officer for the subsequent Assessment years whereby genuineness of the Agreement was accepted and apportionment was allowed?
2. Whether on the facts and in the circumstances of the case, the Tribunal was right in law in disallowing sum of Rs.56,79,193/- earmarked as provision for work in progress, particularly when the appellant has preferred the “percentage completion method” of revenue recognition and incidence to make payments for the completed works has accrued in the very same year having regard to the Accounting Standing 2/7 http://www.judis.nic.in T.C.A.No.633 of 2019 7?
3. Whether on the facts and in the circumstances of the case, the Tribunal was right in law in restricting the disallowances under Section 14A of the Act to the extent of the dividend income of Rs.78,18,542/-
disclosed by the Appellant even though the total disallowance made under Section 14A would have been Rs.13,58,011/- and not Rs.1,01,54,806/-?”
3. We have heard Mr.R.Sivaraman, learned counsel appearing for the appellant/assessee and Mr.T.Ravikumar, learned Senior Standing Counsel appearing for the respondent/Revenue.
4. The learned counsel for the appellant/assessee, on instructions, submits that the appellant/assessee intends to avail the benefit of Vivad Se Vishwas Scheme ('VVS Scheme' for brevity) and in this regard, the assessee is taking steps to file the application/ declaration in Form No.I.
5. It may not be necessary for this Court to decide the substantial questions of law framed/raised for consideration on account of certain subsequent developments. The Government of India enacted the Direct Tax Vivad Se Vishwas Act, 2020 (Act 3 of 2020) to provide for resolution of disputed tax and for matters connected therewith or 3/7 http://www.judis.nic.in T.C.A.No.633 of 2019 incidental thereto. The Act of the Parliament received the assent of the President on 17th March 2020 and published in the Gazette of India on 17th March 2020.
6. In terms of the said Act, the assessee has been given an option to put an end to the tax disputes, which may be pending at different levels either before the First Appellate Authority or before the Tribunal or before the High Court or before the Hon'ble Supreme Court of India. Under Section 2(j) “disputed tax” has been defined. In terms of Section 3, where a declarant means a person, who files a declaration under Section 4 on or before the last date files a declaration to the designated authority in accordance with the provisions of Section 4 in respect of tax arrears, then, notwithstanding anything contained in the Income Tax Act or any other law for the time being in force, the amount payable by the declarant shall be determined in terms of Section 3(a-c) thereunder.
7. The First Proviso to Section 3 states that in case, where an appeal or writ petition or special leave petition is filed by the Income Tax authority on any issue before the Appellate Forum, the amount payable shall be one-half of the amount in the table stipulated in Section 3 calculated on such issue, in such a manner as may be prescribed. The Second Proviso deals with the cases, where the matter 4/7 http://www.judis.nic.in T.C.A.No.633 of 2019 is before the Commissioner (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 the declaration is as per Section 4 of the Act and the particulars to be furnished are also mentioned in the Sub-Sections of Section 4. Section 5 of the Act deals with the time and manner of the payment and Section 6 deals with immunity from initiation of proceedings in respect of offence and imposition of penalty in certain cases. Section 9 of the Act deals with cases, where the Act 3 of 2020 will not be applicable.
8. As observed, the assessee is given liberty to restore this appeal in the event the ultimate decision to be taken on the declaration to be filed by the assessee under Section 4 of the said Act is not in favour of the assessee. If such a prayer is made, the Registry shall entertain the prayer without insisting upon any application to be filed for condonation of delay in restoration of the appeal and on such request made by the assessee by filing a miscellaneous petition for restoration, the Registry shall place such petition before the Division Bench for orders.
9. In the light of the above, we direct the appellant/assessee to file Form No.I on or before 30.12.2020 and the Competent Authority shall process the application/declaration in accordance with the Act and 5/7 http://www.judis.nic.in T.C.A.No.633 of 2019 pass appropriate orders as expeditiously as possible preferably within a period of six (6) weeks from the date, on which, the declaration is filed in the proper form.
10. With this direction, the tax case appeal stands disposed of with the aforementioned liberty and Consequently, the substantial questions of law framed are left open. No costs.
15.12.2020 To
1.The Income Tax Appellate Tribunal, 'D' Bench, Chennai.
2.The Joint Commissioner of Income Tax, Company Range-V, Chennai–34.
RS 6/7 http://www.judis.nic.in T.C.A.No.633 of 2019 T.S.SIVAGNANAM,J AND V.BHAVANI SUBBAROYAN,J RS T.C.A.No.633 of 2019 15.12.2020 7/7 http://www.judis.nic.in