2020 (12) TMI 184 - HC - Income Tax

Vivad Se Vishwas Scheme - assessee has filed the declaration/ undertaking under the Vivad Se Vishwas Scheme on 20.11.2020 ie. today and is awaiting orders to be passed in Form No.3. - HELD THAT - In the light of the subsequent event the Competent Authority shall process the application/declaration in accordance with the Direct Tax Vivad Se Vishwas Act 2020 (Act 3 of 2020) and pass appropriate orders as expeditiously as possible. 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.

Summary

Issues Involved:
1. Appeal challenging the order of the Income Tax Appellate Tribunal for the assessment year 2015-16.
2. Setting aside of the assessing officer's order for reexamination.
3. Remittance of the issue back to the assessing officer.
4. Perversity of the Tribunal's finding regarding burden of proof.

Analysis:

1. The appeal before the High Court was filed by the Revenue under Section 260A of the Income Tax Act, 1961, challenging the order dated 10.1.2020 made by the Income Tax Appellate Tribunal, Chennai, for the assessment year 2015-16. The appeal was admitted based on substantial questions of law related to the Tribunal's decision.

2. The first substantial question of law raised whether the Tribunal was correct in setting aside the assessing officer's well-reasoned order for reexamination, even though the assessing officer had duly examined all the material during the assessment. This issue questions the Tribunal's authority to reexamine the assessment order.

3. The second substantial question of law focused on the Tribunal's decision to remit the issue back to the assessing officer, citing a specific case law. The Tribunal directed the assessing officer to bring on record the role of the Assessee in promoting the Company and the relation with the promoters, despite the assessing officer having already conducted this exercise along with SEBI.

4. The third issue raised the perversity of the Tribunal's finding, contending that it was contrary to the principle that the burden of proof lies with the party asserting a fact. The argument was based on the assertion that the burden must first be discharged by showing the facts are true before shifting to the department.

5. During the hearing, the respondent/assessee informed the Court about filing a declaration under the Vivad Se Vishwas Scheme and requested expedited processing of the application. The Court directed the Competent Authority to process the declaration in accordance with the Direct Tax Vivad Se Vishwas Act, 2020, and granted liberty to the assessee to restore the appeal if the decision on the declaration is unfavorable.

6. The Court disposed of the tax case appeal with liberty for restoration, leaving the substantial questions of law open and without imposing any costs. The judgment highlighted the procedural aspects related to the declaration under the Vivad Se Vishwas Scheme and the subsequent restoration of the appeal if needed.