Court overturns tax application rejection, directs processing, affirms timely filing.

The court held that the rejection of the petitioner's application under the Direct Tax Vivad Se Vishwas Act, 2020 was erroneous. The court set aside the order and directed the respondents to process the forms filed by the petitioner, considering the appeal as pending. The court emphasized that the appeal, along with the condonation of delay plea, was filed before the specified date and was still pending. The writ petition was disposed of with these directions.

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Issues Involved:
1. Rejection of the application under the Direct Tax Vivad Se Vishwas Act, 2020.
2. Pendency of the appeal and the requirement of condonation of delay.
3. Interpretation of FAQ 59 and its applicability.
4. Legal interpretation of "pendency" under the 2020 Act.

Issue-wise Detailed Analysis:

1. Rejection of the application under the Direct Tax Vivad Se Vishwas Act, 2020:
The petitioner was aggrieved by the rejection of his application filed under the Direct Tax Vivad Se Vishwas Act, 2020. The petitioner had filed his income-tax return for the assessment year 2011-2012 and claimed an exemption under Section 54 of the Income Tax Act, 1961. However, the revenue issued a reassessment notice and disallowed the exemption, assessing the petitioner’s income at Rs. 3,08,94,767/-. The petitioner appealed against this reassessment, including a condonation of delay application, which was filed on 11.07.2019. Despite taking steps under the 2020 Act to resolve the pending disputes, the petitioner’s application was rejected on 28.01.2021 without providing reasons, which led to the filing of the writ petition.

2. Pendency of the appeal and the requirement of condonation of delay:
The core issue was whether the appeal filed by the petitioner, which included a plea for condonation of delay, was considered "pending" as of the specified date (31.01.2020) under the 2020 Act. The petitioner argued that since the appeal was filed on 11.07.2019, it should be deemed pending. The respondents contended that the appeal could not be considered pending unless the application for condonation of delay was admitted before the issuance of the circular dated 04.12.2020 and before the filing of forms 1 and 2.

3. Interpretation of FAQ 59 and its applicability:
The respondents relied on FAQ 59 from a clarificatory circular dated 04.12.2020, which stated that for an appeal to be deemed pending, it must have been filed within the period from 01.04.2019 to 31.01.2020 and admitted by the appellate authority before the filing of the declaration. The court found that this response added conditions not present in the 2020 Act itself. The Act only required that the appeal be pending as of 31.01.2020, without stipulating that it must be admitted by that date.

4. Legal interpretation of "pendency" under the 2020 Act:
The court examined the definition of "pendency" and concluded that an appeal is considered pending from the time it is filed until it is adjudicated upon. The court noted that the 2020 Act did not require the appeal to be admitted by the specified date, only that it be pending. The court emphasized that the appeal, including the condonation of delay plea, was filed well before the specified date and was still pending as the delay had not been adjudicated upon by the appellate authority.

Conclusion:
The court held that the rejection of the petitioner’s application was erroneous and set aside the order dated 28.01.2021. The court directed the respondents to process the forms filed by the petitioner under the 2020 Act, considering the appeal as pending. The writ petition was disposed of with these directions.

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