2019 (11) TMI 810 - HC - Income Tax

Dismissal of Petition for Tax Relief Due to Delay Under Tax Resolution Scheme

Magnolia Mayura CHS Ltd. Versus Union of India & Others

The court dismissed the petition primarily due to delay/laches in seeking relief under the Direct Tax Dispute Resolution Scheme, 2016. The court did not ... Application under the Direct Tax Dispute Resolution Scheme, 2016 - Petitioner on 9th August, 2016 filed an application before the authority under the Scheme, 2016, seeking its benefit. However, by an order dated 22nd September, 2016, the same came to be dismissed, as there was no appeal pending on the date when the Petitioner made an application under the Scheme, 2016 as not satisfying the qualifying condition to avail of its benefit - HELD THAT:- We find that the Petitioner’s appeal before the CIT(A) was dismissed on 31st March, 2016. The Petitioner’s application admittedly made on 9th August, 2016 after the Appeal was dismissed. This application came to be rejected on 22nd September, 2016, as there was no appeal pending. The order of CIT(A) which the Petitioner seeks to set aside, is an order dated 31st March, 2016. Thus, the Petition suffers from laches as the orders were passed as far back in 2016 and relief is being sought in 2019.Besides, the Scheme 2016 under which the Petitioner seeks benefit, is also not shown to be available today. In the above view, no occasion to examine the merits of the Petitioner’s claim, can arise. Therefore, only on the ground of laches/ delay, the Petition is dismissed. Issues:1. Direction to allow the petitioner's application under the Direct Tax Dispute Resolution Scheme, 2016.2. Setting aside the penalty order passed by the Commissioner of Income Tax (Appeals) for Assessment Years 2008-09 to 2011-12.Analysis:Issue 1: The petitioner sought a direction under Article 226 of the Constitution of India to the Central Board of Direct Taxes (CBDT) and Principal Commissioner of Income Tax to allow the petitioner's application dated 21st July, 2016 under the Direct Tax Dispute Resolution Scheme, 2016 (Scheme, 2016). The petitioner's appeal before the CIT(A) was dismissed on 31st March, 2016, and the application under the Scheme was made on 9th August, 2016 after the appeal was dismissed. The application under the Scheme was rejected on 22nd September, 2016, as there was no appeal pending at that time. The petitioner argued that a circular issued by the CBDT directed the CIT(A) to keep appeals pending if the appellant expressed intent to avail the Scheme benefits. However, the court found that the petition suffered from delay as the orders were passed in 2016, and relief was sought in 2019. The court dismissed the petition on grounds of laches/delay, and since the Scheme under which the petitioner sought benefits was not shown to be available at the time of the petition.Issue 2: The petitioner also sought the setting aside of the penalty order passed by the CIT(A) for Assessment Years 2008-09 to 2011-12. The Finance Bill 2016 introduced the Scheme, 2016 to settle disputes between the assessee and the revenue by paying a partial amount of tax/penalty. The petitioner's appeal against the penalty orders was dismissed by the CIT(A) on 31st March, 2016. The court did not examine the merits of the petitioner's claim due to the delay in seeking relief. The court emphasized that the petition was dismissed solely on the ground of delay/laches, indicating that no further consideration was given to the penalty order passed by the CIT(A) for the mentioned assessment years.In conclusion, the court dismissed the petition primarily due to delay/laches in seeking relief under the Direct Tax Dispute Resolution Scheme, 2016 and did not delve into the merits of the penalty order passed by the CIT(A) for the specified assessment years.