Delhi High Court sets aside rejection order under VSV Act, directs processing of petitioner's forms

The Delhi High Court set aside the rejection order under the VSV Act, finding it legally flawed. The petitioner's appeal, filed before December 4, 2020, was deemed pending as of January 31, 2020, in accordance with the VSV Act provisions. Respondent no.2 was directed to process the petitioner's forms under the VSV Act, and the Writ Petition was disposed of with no costs awarded.

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Issues:
Impugning the rejection order under Direct Tax Vivad Se Vishwas Act, 2020 (VSV Act) - Delay in filing appeal under Section 246A of the Income Tax Act, 1961 - Communication from Commissioner of Income Tax (Appeals) regarding VSV Scheme 2020 - Interpretation of VSV Act provisions - Circular by Central Board of Direct Taxes - Admissibility of appeal under VSV Act.

Analysis:
The petitioner challenged the rejection order dated February 26, 2021, passed by respondent no.2 under the VSV Act. The petitioner filed its original income tax return for Assessment Year 2017-18, which was selected for scrutiny, leading to an assessment order under Section 144 of the Income Tax Act, 1961. The petitioner filed an appeal under Section 246A of the Act on February 6, 2020, after the expiry of the time limit, with an application for condonation of delay. The delay was of 19 days, and the filing fees for the appeal were paid on January 24, 2020. The Commissioner of Income Tax (Appeals) inquired about the petitioner's choice regarding the VSV Scheme 2020 on January 20, 2021, indicating that the delay in filing the appeal had been condoned.

The VSV Act allows a person with a pending appeal as of January 31, 2020, to make a declaration under the Act by January 31, 2021. The petitioner made its declaration on January 21, 2021, within the prescribed period. A Circular by the Central Board of Direct Taxes clarified that appeals with applications for condonation filed before December 4, 2020, would be deemed pending as of January 31, 2020. The Delhi High Court held that an appeal is considered pending from the time it is filed until adjudicated upon, rejecting the notion that admission of the appeal equates to pendency. In this case, the appeal was filed before December 4, 2020, meeting the VSV Act's requirements.

The rejection order dated February 26, 2021, was deemed legally flawed and set aside. Respondent no.2 was directed to process the forms filed by the petitioner under the VSV Act. The Writ Petition was disposed of accordingly, with no order as to costs.

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