Pendency under Vivad Se Vishwas starts on filing of appeal; delay alone cannot exclude settlement eligibility.

An appeal filed before the appellate forum remains "pending" for Vivad Se Vishwas Scheme eligibility even if it is delayed or awaiting condonation, because pendency begins with filing and does not require prior admission or validation of the appeal. The Court held that CBDT circulars and FAQs cannot narrow the statutory meaning of "pending" by imposing a precondition not found in the Act. A contrary circular is ineffective to the extent of the inconsistency, and the rejection of settlement based on delayed filing was unsustainable. The quantum and penalty disputes were therefore treated as eligible for settlement under the statute.

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Issues: (i) Whether an appeal filed before the appellate forum but accompanied by delay, or pending condonation, could still be treated as "pending" for the purpose of eligibility under the Vivad Se Vishwas Scheme; (ii) Whether the CBDT circular and FAQ requiring admission of the delayed appeal before the declaration could validly restrict the statutory meaning of "pending".

Issue (i): Whether an appeal filed before the appellate forum but accompanied by delay, or pending condonation, could still be treated as "pending" for the purpose of eligibility under the Vivad Se Vishwas Scheme.

Analysis: The statutory phrase "pending" in the scheme was construed in its ordinary legal sense. The Court held that once an appeal is filed, it remains pending until disposal, and the expression does not import an additional requirement that the appeal must be valid, competent, or already admitted. Reliance was placed on settled law that even an irregular or incompetent appeal is nonetheless an appeal pending before the appellate forum. The rejection of the quantum dispute merely because the appeal was filed beyond limitation was therefore inconsistent with the scheme's language.

Conclusion: The delayed quantum appeal was held to be pending for the purpose of the scheme, and the assessee was entitled to seek settlement of that dispute.

Issue (ii): Whether the CBDT circular and FAQ requiring admission of the delayed appeal before the declaration could validly restrict the statutory meaning of "pending".

Analysis: The Court held that the Board's power to issue directions could not be exercised in a manner prejudicial to the assessee or in conflict with the statute. A circular contrary to the parent enactment has no legal existence to the extent of the inconsistency. Since the FAQ made admission of the delayed appeal a precondition for treating it as pending, it imposed a restriction not found in the Act and was inconsistent with the statutory scheme.

Conclusion: The FAQ and the consequential forms rejecting the quantum settlement were held to be contrary to law and unsustainable.

Final Conclusion: The rejection of the quantum appeal under the settlement scheme was set aside, and the authorities were required to treat both the quantum and penalty disputes as eligible for settlement in accordance with the statute.

Ratio Decidendi: For a statutory scheme that turns on an appeal being "pending", pendency begins with the filing of the appeal and is not displaced by delay or by the absence of prior admission; an administrative circular cannot add a disqualifying condition inconsistent with the statute.

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