Court sets aside rejection under Direct Tax Vivad Se Vishwas Act, directs acceptance of revised declaration. Interpret Act to benefit assessee.

The court allowed the writ petition, setting aside the rejection of the petitioner's declaration/application under the Direct Tax Vivad Se Vishwas Act, 2020. The court directed the respondent to accept the revised declaration, process it in accordance with the Act, issue Form 3, and accept payment from the petitioner. The court emphasized that the Act should be interpreted to benefit the assessee and not denied based on a hyper-technical view, highlighting the Act's purpose of reducing tax litigation and unlocking disputed tax arrears.

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Issues Involved:
1. Validity of rejection of the petitioner’s declaration/application under the Direct Tax Vivad Se Vishwas Act, 2020 (the Act of 2020).
2. Interpretation of the "specified date" for pending appeals under the Act of 2020.
3. Applicability of the Central Board of Direct Taxes (CBDT) Circular No.21/2020 to the petitioner’s case.
4. Whether the Act of 2020 is a beneficial legislation and the scope of its interpretation.

Issue-wise Detailed Analysis:

1. Validity of Rejection of the Petitioner’s Declaration/Application under the Act of 2020:
The petitioner challenged the proceeding dated 22.04.2021 issued by the 1st respondent, which rejected the petitioner’s revised declaration/application dated 31.03.2021 in Form 1 and 2 under the Act of 2020. The petitioner contended that the appeal against the CIT’s order was filed before the Tribunal, condoning the delay, and thus should be considered pending as on the specified date, i.e., 31.01.2020. The respondents argued that no appeal was pending on the specified date, thus the application was invalid.

2. Interpretation of the "Specified Date" for Pending Appeals under the Act of 2020:
The Act of 2020 aims to resolve disputed tax matters and requires appeals to be pending as on 31.01.2020. The petitioner argued that the appeal should be deemed pending as on the specified date due to the Tribunal’s condonation of delay and subsequent remand to the CIT. The court noted that the Act of 2020 is a beneficial legislation intended to reduce tax disputes and should be interpreted to achieve its purpose. The court found that the appeal, once admitted by the Tribunal, should be considered pending as on the specified date.

3. Applicability of the CBDT Circular No.21/2020 to the Petitioner’s Case:
The petitioner relied on Circular No.21/2020, which clarifies that appeals where the time limit for filing expired between 01.04.2019 and 31.01.2020, and an application for condonation of delay is filed before the date of the circular (04.12.2020), should be deemed pending as on 31.01.2020. The respondents contended that the petitioner’s application did not meet these criteria. The court held that the circular should not be interpreted restrictively and should apply to appeals admitted before the filing of the declaration, even if the application for condonation was filed after 04.12.2020.

4. Whether the Act of 2020 is a Beneficial Legislation and the Scope of Its Interpretation:
The court emphasized that the Act of 2020 is a beneficial legislation aimed at reducing tax litigation and unlocking disputed tax arrears. The court cited precedents to support the view that beneficial legislation should be interpreted to fulfill its purpose. The court concluded that the rejection of the petitioner’s declaration/application was not in line with the scheme and intent of the Act of 2020.

Conclusion:
The court allowed the writ petition, setting aside the impugned proceeding dated 22.04.2021. The 1st respondent was directed to accept the revised declaration Form 1 and 2 filed by the petitioner on 31.03.2021, process it in accordance with the Act of 2020, issue Form 3, and accept the payment from the petitioner before the due date. The court highlighted that the Act of 2020 should be interpreted to benefit the assessee and not be denied based on a hyper-technical view.

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