Assessee's Appeal Deemed Maintainable Despite Revenue's Challenge

The Tribunal concluded that the appeal filed by the assessee was maintainable despite the Revenue's challenge. The appeal was deemed withdrawn upon the issuance of Form No. 3 under Section 4(2) of the DTVSVS Act, 2020. However, due to the assessee's violation of conditions, including non-payment of tax, the declaration was presumed never to have been made, and the proceedings were revived under Section 4(6). The Tribunal rejected the Revenue's argument and directed that the appeal should proceed to be heard on its merits, scheduling further hearings.

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Issues Involved:
1. Maintainability of the appeal filed by the assessee in light of the Direct Tax Vivad Se Vishwas Act, 2020 (DTVSVS Act, 2020).
2. Interpretation of Section 4(2), Section 4(6), and Section 4(7) of the DTVSVS Act, 2020.
3. Implications of Form No. 3 issued under Section 5(1) of the DTVSVS Act, 2020.
4. Clarifications provided in Circular 9 of 2020 by the CBDT.

Detailed Analysis:

1. Maintainability of the Appeal:
The Revenue filed a petition challenging the maintainability of the appeal filed by the assessee, arguing that the appeal should be deemed withdrawn under Section 4(2) of the DTVSVS Act, 2020, once Form No. 3 is issued by the designated authority. The Revenue contended that the appeal cannot be pursued by the assessee after the issuance of Form No. 3.

2. Interpretation of Section 4(2), Section 4(6), and Section 4(7):
- Section 4(2): This section states that any appeal pending before the Income-Tax Appellate Tribunal or Commissioner (Appeals) shall be deemed to have been withdrawn from the date on which the certificate under Section 5(1) is issued by the designated authority.
- Section 4(6): This section provides that if the declarant violates any conditions of the Act, including non-payment of tax, the declaration shall be presumed never to have been made, and all proceedings and claims which were withdrawn shall be revived.
- Section 4(7): This section states that no appellate forum or arbitrator, conciliator, or mediator shall proceed to decide any issue relating to the tax arrear mentioned in the declaration once an order is passed under Section 5(1).

3. Implications of Form No. 3:
The issuance of Form No. 3 by the designated authority signifies the determination of the amount payable by the declarant. The Revenue argued that the appeal should be deemed withdrawn upon the issuance of this form. However, the assessee contended that due to differences in the tax payable, they decided to opt out of the VSVS Scheme, invoking Section 4(6), which presumes the declaration never to have been made if conditions are violated.

4. Clarifications in Circular 9 of 2020:
The Revenue referred to FAQs in Circular 9 of 2020, particularly Questions 43 and 47, to support their argument. These FAQs clarify that the appeal is deemed withdrawn once Form No. 3 is issued and that no appellate forum can proceed with the appeal once the designated authority has determined the tax arrear.

Judgment:
The Tribunal, after considering the arguments and relevant provisions of the DTVSVS Act, 2020, concluded that:
- The appeal is deemed to have been withdrawn upon the issuance of Form No. 3 as per Section 4(2).
- However, if the declarant violates any conditions, including non-payment of tax, the declaration is presumed never to have been made, and the proceedings are revived as per Section 4(6).
- The Tribunal rejected the Revenue's petition on maintainability, stating that the appeal is deemed to be revived due to the violation of conditions by the assessee.
- The Tribunal directed that the appeal needs to be heard on its merits and scheduled further hearing.

Conclusion:
The Tribunal held that the appeal filed by the assessee is maintainable and should be heard on the issues involved. The Revenue's petition on maintainability was rejected, and the appeal was treated as part heard, with further hearing scheduled.

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