2023 (12) TMI 504 - HC - Income Tax

Petitioner's Late Appeal Bars Relief Under Tax Dispute Settlement Act; Court Upholds Mandatory Compliance Rules.

The HC dismissed the writ petition, ruling that the petitioner was not entitled to benefit from The Direct Tax Vivaad Se Vishwas Act, 2020 due to failure ... Validity of order passed Direct Tax Vivaad Se Vishwas, Act - penalty imposed u/s 271 AAB - amicable settlement in terms of the Act seeked - settlement over litigation - appeal was filed carrying a delay of 1261 days - designated authority rejecting that application/ declaration for reason of second appeal not filed before the cut off date 01.04.1919 to 31.01.2020 - revenue would submit not only the petitioner did not file any appeal within limitation, he also did not file such appeal with delay within the cut off time. Had such delay condonation application being filed, the revenue authorities would have remained enabled to consider the application/ declaration on merits HELD THAT:- We find no good ground to offer any interference. In the first place, settlement of disputes outside courts/ judicial process is not a fundamental or inherent right of any litigant. That right was created by the statute i.e. the Act. Being a statutory right, the same may have been availed strictly in accordance with the statutory conditions and it was a stipulation that the application/ declaration may be maintainable only if there was pending a litigation between the parties before the cut off date, it remained from the petitioner to satisfy that condition. Not only the petitioner did not file the appeal before the Tribunal, within time it also remained from him to file any defective proceeding seeking condonation of delay in filing such appeal before the cut off date. Therefore, no right vested or accrued to the petitioner to seek a settlement in terms of the conditions prescribed by the Act. For that reason, we find no error in the order passed by the designated authority. Further submission of petitioner is concerned based on the objects and reasons of the Act, while objects and reasons may never defeat specific provisions of enactment, here we also note that the petitioner is not at loss inasmuch as his right of appeal before the Tribunal, against the order passed by the first appellate authority has been preserved upon condonation of delay of 1261 days in filing the second appeal. Writ petition lacks merits and is dismissed. Issues involved:The judgment deals with the issue of whether the petitioner is entitled to benefit from The Direct Tax Vivaad Se Vishwas Act, 2020 despite not filing a second appeal within the specified time frame.Summary:The petitioner was imposed a penalty under Section 271 AAB of the Income Tax Act, 1961 for the assessment year 2013-2014. After filing an initial appeal which partially allowed and reduced the penalty amount, the petitioner did not file a further appeal for a long period. Subsequently, a second appeal was filed after a delay of 1261 days, which is pending before the Tribunal. The petitioner sought to settle the matter under The Direct Tax Vivaad Se Vishwas Act, 2020, but the application was rejected due to not filing the second appeal before the cut-off date. The petitioner argued that the Act aims for settlement over litigation, and hence, should be allowed to benefit from it. On the other hand, the revenue authorities contended that the petitioner did not file any appeal within the limitation period and failed to seek delay condonation within the specified time frame. The High Court held that the right to settle disputes outside courts is a statutory right created by the Act and must be strictly complied with. Since the petitioner did not fulfill the statutory conditions, the court found no error in the authority's decision to reject the application. Additionally, the court noted that the petitioner still retains the right to appeal before the Tribunal, even after the delay in filing the second appeal was condoned. Therefore, the writ petition was dismissed for lacking merits.