Petitioners filing tax revisions after deadline but within limitation period eligible for Vivad se Vishwas Scheme benefits

Delhi HC held that petitioners who filed tax revisions after the specified date but within limitation period remained eligible for Vivad se Vishwas Scheme benefits. Court ruled that CBDT's clarification extending VSV Act coverage to appeals where limitation had not expired on January 31, 2020 must equally apply to revisions, as drawing distinction between appeals and revisions would be arbitrary and violative of Article 14. The beneficial legislation must be construed liberally, considering pandemic challenges and legislative policy of dispute settlement. Court quashed rejection notifications and accorded finality to Form 5 since petitioner had deposited disputed tax liability.

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Issues Involved:
1. Eligibility under the Direct Tax Vivad Se Vishwas Act, 2020 (VSV Act) for revisions filed after the specified date.
2. Interpretation of the CBDT circulars and legislative intent behind the VSV Act.
3. Applicability of the extension of limitation due to COVID-19 pandemic.

Summary:

Issue 1: Eligibility under the VSV Act for Revisions Filed After the Specified Date
The petitioner challenged the rejection of their declarations under the VSV Act by the respondents, who argued that revisions filed after the specified date of 31 January 2020 were ineligible. The petitioner had filed a revision under Section 264 of the Income Tax Act, 1961 on 01 March 2021, benefiting from the extended limitation period due to the COVID-19 pandemic. The court examined whether the filing of the revision within the extended limitation period rendered the petitioner ineligible under the VSV Act.

Issue 2: Interpretation of the CBDT Circulars and Legislative Intent
The court referred to the CBDT circular dated 04 March 2020, which clarified that the VSV Act covered appeals pending as of 31 January 2020 and cases where the time limit for filing an appeal had not expired by that date. The court noted that the CBDT circular also extended to revisions pending on the specified date. The respondents' interpretation that only revisions pending on 31 January 2020 were covered was deemed illogical and arbitrary. The court emphasized that the legislative intent of the VSV Act was to provide a broad avenue for dispute resolution, including cases where the limitation for filing appeals or revisions had not expired by the specified date.

Issue 3: Applicability of the Extension of Limitation Due to COVID-19
The court acknowledged that the limitation period for filing revisions was extended due to the COVID-19 pandemic, as per the Taxation and Other Laws (Relaxation of Certain Provisions) Ordinance, 2020 and the Supreme Court's orders in Suo Motu Writ Petition (Civil) No. 3/2020. This extension allowed the petitioner to file the revision within the extended period, thus retaining their right to challenge the adverse order.

Conclusion:
The court concluded that the VSV Act's provisions should be interpreted broadly to include revisions filed within the extended limitation period due to the pandemic. The court quashed the notifications of rejection and accorded finality to the Form 5 issued during the proceedings, as the petitioner had already deposited the entire disputed tax liability. The judgment emphasized the remedial and beneficial nature of the VSV Act, aiming to reduce litigation and provide timely revenue to the government.

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