Deceased assessee's declaration under Direct Tax Vivaad se Vishwas Act cannot be rejected for appeal pendency condition

The HC set aside orders rejecting a declaration under the Direct Tax Vivaad se Vishwas Act, 2020. The Designated Authority had rejected the deceased assessee's declaration claiming the appeal pendency condition wasn't satisfied. The court held that "pending" in Section 2(1)(a) means an appeal filed and not yet adjudicated, regardless of validity or admission status. Citing SC precedents, the court ruled that appeals remain pending even if ultimately found incompetent. The court declared CBDT's FAQ No.59 of Circular No.21/2020 contrary to law insofar as it required appeal admission as a condition precedent for VSV Act eligibility. The respondent was directed to process the claim.

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Issues involved:
The case involves a challenge to orders passed under the Direct Tax Vivaad se Vishwas Act, 2020 regarding the rejection of a declaration filed by a deceased assessee on the ground of appeal not being pending as of a specified date.

Details of the Judgment:

Challenge to Orders under DTVSV Act, 2020:
The petitioner, as the legal heir of the deceased assessee, challenged the rejection of the declaration under the DTVSV Act, 2020 based on the condition of appeal pendency as of 31.01.2020. The petitioner had filed an appeal with an application for condonation of delay before the circular clarifying eligibility was issued on 04.12.2020.

Interpretation of "Pending" Appeal:
The court deliberated on the meaning of "pending" appeal as per the Act of 2020. It was emphasized that an appeal should be considered pending upon filing, regardless of its validity or competency, as per precedents from Supreme Court cases like Raja Kulkarni v. The State of Bombay and others.

Validity of Circulars and FAQs:
The court highlighted that circulars issued by the CBDT should not be adverse to the assessee and must align with statutory provisions. It cited the Supreme Court's stance in UCO Bank, Calcutta vs. Commissioner of Income Tax, W.B., emphasizing that circulars contrary to the law have no legal standing.

Impact of Supreme Court Decisions:
The judgment emphasized that when the Supreme Court or High Court declares the law on a matter, their view should be followed over circulars issued by authorities. The court referred to Commissioner of Central Excise, Bolpur vs. Ratan Melting & Wire Industries to support this stance.

Decision and Order:
Ultimately, the court set aside the rejection orders dated 31.03.2021 and 15.04.2021, directing the designated authority to process the petitioner's claim under the provisions of the 2020 Act. The petition was allowed with no order as to costs.

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