2021 (9) TMI 1231 - HC - Income Tax

Court quashes order, allows declaration under VSV Scheme for 2014-15, stresses timely responses.

The court quashed the orders rejecting the petitioner's declaration under the Vivad Se Vishwas (VSV) Scheme, directing acceptance of the declaration for ... Rejection of declaration u/s 5 of the Direct Tax Vivad Se Vishwas Act, 2020 (‘VSV Scheme’) - Case was pending or not - where the appeal was file beyond the prescribed time limit and delay was not condoned - HELD THAT:- there remains no shadow of doubt that appeal could be said to be pending, even if the delay occurred in filing the same was not condoned and even if it was allegedly irregular or incompetent. In the instant case therefore also, the Respondent could not have rejected the Declaration Form of the Petitioner filed under the said Act merely on the ground that the Appeal was not valid or competent, as the delay occurred in filing the Appeal was not condoned by the Appellate Authority. As communication displayed at the portal of the department rejecting the declaration of the petitioner by orders dated 23rd February, 2021 and 12th April, 2021 are quashed and set aside. The respondent is directed to accept the declaration under the said Act for the A.Y. 2014-15. Let the declaration be accepted by the respondent on or before the 27th September, 2021. The payment allowed to be made on or before 30th September, 2021 considering the outer time limit set under the scheme. Any other consequential declarations if needed to be allowed, no delay shall be caused by the authority concerned. Issues Involved:1. Legality of the orders passed on 23rd February 2021 and 12th April 2021 under Section 5 of the Direct Tax Vivad Se Vishwas Act, 2020.2. Rejection of the petitioner's declaration under the Vivad Se Vishwas Scheme.3. Validity of the appeal filed by the petitioner and its pendency.4. Non-reply and non-passing of the order by CIT(A) on the condonation application.5. Entitlement of the petitioner to avail benefits under the VSV Scheme.Issue-wise Detailed Analysis:1. Legality of the Orders Passed on 23rd February 2021 and 12th April 2021:The petitioner challenged the legality of the orders passed under Section 5 of the Direct Tax Vivad Se Vishwas Act, 2020, which rejected his declaration under the VSV Scheme. The court noted that the rejection was based on the delay in filing the appeal and the lack of a condonation order from CIT(A). The court examined whether the rejection was contrary to the VSV Scheme.2. Rejection of the Petitioner's Declaration under the VSV Scheme:The petitioner's declaration was rejected on the grounds that the appeal was filed beyond the prescribed time limit, and no condonation order had been received from CIT(A). The court observed that the declaration was rejected due to the non-reply from CIT(A) and the non-passing of the condonation order, which was contrary to the scheme's intent.3. Validity of the Appeal Filed by the Petitioner and Its Pendency:The court referred to the definition of 'appellant' under Section 2(i)(a) of the VSV Act, which includes a person whose appeal is pending as of the specified date, irrespective of whether the appeal is valid or competent. The court emphasized that the appeal's pendency, even if delayed, qualifies the petitioner as an appellant under the VSV Act.4. Non-reply and Non-passing of the Order by CIT(A) on the Condonation Application:The court highlighted that the delay in filing the appeal and the non-reply from CIT(A) should not deprive the petitioner of the scheme's benefits. The court cited the Supreme Court's decision in Commissioner of Income Tax v. Shatrusailya Digvijaysingh Jadeja, which held that an appeal is considered pending even if it is delayed or irregular.5. Entitlement of the Petitioner to Avail Benefits under the VSV Scheme:The court concluded that the respondent could not reject the declaration merely because the appeal was not valid or competent due to the delay. The court directed the respondent to accept the petitioner's declaration under the VSV Act for the assessment year 2014-15 and allowed the petitioner to make the required payment within the specified time.Conclusion:The court quashed and set aside the orders dated 23rd February 2021 and 12th April 2021, rejecting the petitioner's declaration under the VSV Scheme. The respondent was directed to accept the declaration and allow the petitioner to make the payment by 30th September 2021. The court emphasized that non-reply from authorities should not prevent citizens from availing benefits under any provision or scheme. The petition was disposed of, and the rule was made absolute.