Mukundan Vijayan v. The Income-tax Officer, Corporate Ward 1(1), Chennai
[Citation -2020-LL-1013-77]

Citation 2020-LL-1013-77
Appellant Name Mukundan Vijayan
Respondent Name The Income-tax Officer, Corporate Ward 1(1), Chennai
Court HIGH COURT OF MADRAS
Relevant Act Income-tax
Date of Order 13/10/2020
Assessment Year 2007-08
Judgment View Judgment
Keyword Tags designated authority • dividend • vivad se vishwas scheme
Bot Summary: Whether, in the absence of any actual amount being transferred from a company to its shareholder, a mere entry in the books of such company can constitute payment by way of advance or loan within the meaning of Section 2(22)(e) of the Income Tax Act, 1961 3. 73 of 2018 finding that a payment was made within the meaning of Section 2(22)(e) of the Income Tax Act, 1961 by the company to such a shareholder 2. 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 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. 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 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 9 of the Act deals with cases, where the Act 3 of 2020 will not be applicable. We are informed by the learned counsel for the appellant/assessee that the assessee has already filed the declaration under Section 4 of the Act on 25.09.2020 and has also remitted the tax in terms of the computation to be done under the said Act and they are awaiting the orders from the Department.


T.C.A.No.73 of 2018 IN HIGH COURT OF JUDICATURE AT MADRAS DATED : 13.10.2020 CORAM HONOURABLE MR.JUSTICE T.S.SIVAGNANAM and HONOURABLE MRS.JUSTICE V.BHAVANI SUBBAROYAN T.C.A.No.73 of 2018 Mr.Mukundan Vijayan .. Appellant Versus Income Tax Officer, Corporate Ward 1 (1) Chennai 34. Respondent Prayer:- Tax Case Appeal filed under Section 260-A of Income Tax Act, 1961, against order of Income Tax Appellate Tribunal, Madras 'D' Bench, dated 22.11.2017 made in I.T.A.No.639/MDS/2017 relating to Assessment Year 2007-08. For Appellant : Mr.Suhrith Parthasarathy For Respondent : Mr.T.Ravikumar Senior Standing counsel and M/s.R.Hemalatha Senior Standing counsel 1/8 http://www.judis.nic.in T.C.A.No.73 of 2018 JUDGMENT [Order of Court was made by T.S.SIVAGNANAM, J.] This appeal has been filed by assessee under Section 260 of Income Tax Act, 1961 ('the Act' for brevity), is directed against order dated 22.11.2017 passed by Income Tax Appellate Tribunal, Chennai, 'D' Bench ('the Tribunal' for brevity) in I.T.A.No.639/MDS/2017 for Assessment Year 2007-08. appeal was admitted on 30.01.2018 on following Substantial Questions of Law: 1. Whether provisions of Section 2(22)(e) of Income Tax Act, 1961, can be attracted in absence of any amount being transferred from company to its shareholder? 2. Whether, in absence of any actual amount being transferred from company to its shareholder, mere entry in books of such company can constitute payment by way of advance or loan within meaning of Section 2(22)(e) of Income Tax Act, 1961? 3. Whether entry made in books of company, in and of itself, can constitute payment of dividend to shareholder within meaning of Section 2(22)(e) of Income Tax Act, 1961? 4. Whether admission by company that no actual loan was extended to its shareholder ought to negate 2/8 http://www.judis.nic.in T.C.A.No.73 of 2018 finding that payment was made within meaning of Section 2(22)(e) of Income Tax Act, 1961 by company to such shareholder? 2. We have heard Mr.Suhrith Parthasarathy, learned counsel appearing for appellant and Mr.T.Ravikumar, learned Senior Standing counsel and M/s.R.Hemalatha, learned Senior Standing counsel for respondents. 3. It may not be necessary for this Court to decide Substantial Questions of Law framed for consideration on account of certain subsequent developments. Government of India enacted Direct Tax Vivad Se Vishwas Act, 2020 (Act 3 of 2020) to provide for resolution of disputed tax and for matters connected therewith or incidental thereto. Act of Parliament received assent of President on 17th March 2020 and published in Gazette of India on 17th March 2020. 4. In terms of said Act, assessee has been given option to put end to tax disputes, which may be pending at different levels either before First Appellate Authority or before Tribunal or before 3/8 http://www.judis.nic.in T.C.A.No.73 of 2018 High Court or before Hon'ble Supreme Court of India. Under Section 2(j) disputed tax has been defined. In terms of Section 3, where declarant means person, who files declaration under Section 4 on or before last date files declaration to designated authority in accordance with provisions of Section 4 in respect of tax arrears, then, notwithstanding anything contained in Income Tax Act or any other law for time being in force, amount payable by declarant shall be determined in terms of Section 3(a-c) thereunder. 5. First Proviso to Section 3 states that in case, where Appeal or Writ Petition or Special Leave Petition is filed by Income Tax authority on any issue before Appellate Forum, amount payable shall be one-half of amount in table stipulated in Section 3 calculated on such issue, in such manner as may be prescribed. second proviso deals with cases, where matter is before Commissioner (Appeals) or before Dispute Resolution Panel. third proviso deals with cases, where issue is pending before Income Tax Appellate Tribunal. filing of declaration is as per Section 4 of Act and particulars to be furnished are also mentioned in Sub Sections of Section 4. Section 5 4/8 http://www.judis.nic.in T.C.A.No.73 of 2018 of Act deals with time and manner of 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 Act deals with cases, where Act 3 of 2020 will not be applicable. 6. We are informed by learned counsel for appellant/assessee that assessee has already filed declaration under Section 4 of Act on 25.09.2020 and has also remitted tax in terms of computation to be done under said Act and they are awaiting orders from Department. 7. In light of fact that assessee has already availed benefit under Act, no useful purpose would be served in keeping this appeal pending. At same time, safeguarding interest of assessee in event order to be passed by Department under Act is not in favour of assessee. Accordingly, Tax Case Appeal stands disposed of on ground that assessee has already filed declaration and remitted tax and Department shall process application at earliest in accordance with said Act and communicate decision to assessee 5/8 http://www.judis.nic.in T.C.A.No.73 of 2018 at earliest. As observed, assessee is given liberty to restore this appeal in event ultimate decision to be taken on declaration filed by assessee under Section 4 of said Act is not in favour of assessee. If such prayer is made, Registry shall entertain prayer without insisting upon any application to be filed for condonation of delay in restoration of appeal and on such request made by assessee by filing Miscellaneous Petition for Restoration, Registry shall place such petition before Division Bench for orders. 8. With this observation, Tax Case Appeal stands disposed of with aforementioned liberty. No costs. (T.S.S.,J) (V.B.S.,J) 13.10.2020 Kak Index: Yes / No Internet: Yes / No Speaking Order/Non-Speaking Order 6/8 http://www.judis.nic.in T.C.A.No.73 of 2018 To Income Tax Appellate Tribunal, 'D' Bench, Chennai. 7/8 http://www.judis.nic.in T.C.A.No.73 of 2018 T.S.SIVAGNANAM, J. AND V.BHAVANI SUBBAROYAN, J. Kak T.C.A.No.73 of 2018 13.10.2020 8/8 http://www.judis.nic.in Mukundan Vijayan v. Income-tax Officer, Corporate Ward 1(1), Chennai
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