2021 (8) TMI 1263 - HC - Income Tax

Focus on Appeal Date in Tax Dispute Quash Decision

The court quashed the rejection of the Declaration under the Direct Tax Vivad se Vishwas Act, 2020, emphasizing that the focus should be on whether the ... Petition under “The Direct Tax Vivad se Vishwas Act, 2020 - as displayed on the E-filing portal of the Respondent that the said Declaration was rejected on 26.04.2021, mainly on the ground that the First Appeal was filed belatedly and there was no information received from the Assessing Officer, as to whether, the delay occurred in filing the Appeal before the Appellate Authority was condoned or not - HELD THAT:- As decided in [2021 (7) TMI 1267 - GUJARAT HIGH COURT] there remains no shadow of doubt that appeal could be said to be pending, even if the delay occurred in filing the same was not condoned and even if it was allegedly irregular or incompetent. In the instant case therefore also, the Respondent could not have rejected the Declaration Form of the Petitioner filed under the said Act merely on the ground that the Appeal was not valid or competent, as the delay occurred in filing the Appeal was not condoned by the Appellate Authority. In the opinion of the Court, the Respondent had to only take into consideration, as to whether, the Petitioner had filed an Appeal, and the same was pending on the ‘specified date’ i.e. 31.1.2020. It was not for the Respondent to decide, as to whether, such Appeal was irregular or incompetent or invalid in the eye of law. In view of the above, the impugned communication dated 26.04.2021 rejecting the Declaration filed by the petitioner under the said Act, deserves to be quashed and set aside, and is accordingly quashed and set aside. The respondent is directed to accept the said Declaration under the said Act for the assessment year under consideration, if otherwise it is valid. Issues:Challenge to rejection of Declaration under Direct Tax Vivad se Vishwas Act, 2020.Analysis:The petitioner filed a petition under Article 226 challenging the rejection of the Declaration under the Direct Tax Vivad se Vishwas Act, 2020. The facts revealed that after a round of litigation, the Assessing Officer framed an assessment for the petitioner for a specific period. The petitioner, desiring to settle the dispute under the said Act, filed a Declaration on 02.01.2021. However, it was rejected on 26.04.2021 due to the belated filing of the Appeal and lack of information on the condonation of the delay. The Court referred to a similar case where the definition of 'Appellant' and 'specified date' under the Act were discussed. It was established that the Appeal filed by the petitioner was pending on the specified date, even though the delay was not condoned. The Court held that the rejection based on the Appeal's validity or competency was unjustified as the focus should have been on whether the Appeal was pending on the specified date. The rejection was quashed, and the respondent was directed to accept the Declaration if valid.This judgment highlights the importance of focusing on the specific legal requirements under the Direct Tax Vivad se Vishwas Act, 2020. It clarifies that the mere delay or irregularity in filing an Appeal does not render it invalid if it is pending on the specified date. The Court emphasized that the Respondent's role is to determine the Appeal's status on the specified date rather than assessing its legal validity. The decision provides clarity on the interpretation of the Act's provisions and ensures that the settlement process is fair and in line with the legislative intent.