2021 (3) TMI 957 - HC - Income Tax

Court orders Revenue to accept original tax amount until next hearing; petitioners to pay revised amount if unsuccessful. Temporary arrangement agreed upon.

The Court directed the Revenue to accept the tax amount as per the original certificate until the next hearing. If the petitioners do not succeed, they ... Whether or not the petitioner should be called to Pay 125% of the disputed tax under the revised certificate issued by the designated authority, under Form 3, in exercise of the powers under Section 5(1) of the Direct Tax Vivad Se Vishwas Act, 2020 - HELD THAT:- It is the case of the petitioners that the said question and the answer provided in response to it is beyond the provisions of the Act and the rules framed thereunder. To our minds, the issue needs examination. Accordingly, issue notice in the captioned matters and the accompanying interlocutory applications.Revenue, whose names are given hereinabove, accept service. The counter-affidavit(s) will be filed within four weeks from today. Rejoinder(s) thereto, if any, will be filed before the next date of hearing. Given the fact that the scheme under the Act, insofar as the petitioners are concerned, will expire on 31.03.2021, for the moment, the Revenue will accept the tax, as determined by the designated authority, as per the original certificate issued in Form 3. Petitioners are not successful in persuading us to take a view in their favour in the instant matters, they will pay the tax, as per the revised certificate issued by the designated authority, along with suitable interest, if any, which this Court may impose, at the time of the disposal of the writ petition. Issues:1. Whether petitioners should pay 125% of disputed tax under revised certificate issued under the Direct Tax Vivad Se Vishwas Act, 2020.2. Validity of revised certificate issued based on Circular No. 21/2020 by CBDT.3. Whether Question No. 70 in the Circular is beyond the Act's provisions.4. Acceptance of tax amount as per original certificate until the next hearing.5. Payment of revised tax amount with interest if petitioners are unsuccessful.6. Provision of consequential relief if petitioners succeed.Analysis:Issue 1:The primary issue in the matter pertains to whether the petitioners are obligated to pay 125% of the disputed tax under the revised certificate issued by the designated authority under the Direct Tax Vivad Se Vishwas Act, 2020. The petitioners argue that the original certificate required payment of 100% of the disputed tax by a specified deadline.Issue 2:The petitioners challenge the validity of the revised certificate, contending that it was issued based on Circular No. 21/2020 by the CBDT. They argue that the Circular, resembling Frequently Asked Questions (FAQs), is not in alignment with the Act and its rules.Issue 3:A specific contention raised by the petitioners is that Question No. 70 in the Circular and its corresponding answer extend beyond the statutory provisions of the Act and its associated regulations. This raises concerns regarding the legality and applicability of the Circular in the context of the revised certificates issued.Issue 4:The Court, considering the complexity of the issues raised, deems it necessary to examine the matter further. As a result, notices are issued in the cases along with interlocutory applications. The Revenue representatives have acknowledged the service.Issue 5:In the interim, the Court directs the Revenue to accept the tax amount determined by the designated authority as per the original certificate until the next hearing. However, if the petitioners do not succeed in their arguments, they will be required to pay the revised tax amount along with any applicable interest.Issue 6:Both parties have agreed to the temporary arrangement established by the Court. It is clarified that if the petitioners prevail in the cases, appropriate relief will be granted in accordance with the provisions of the Act and relevant regulations.The matters are scheduled for the next hearing on 04.05.2021, indicating that further deliberations and decisions will follow based on the arguments presented and the legal considerations involved.