Petitioner declared eligible for VSV Scheme as 2015 appeal treated pending on January 31, 2020; rejection quashed

The HC held the petitioner eligible for the VSV Scheme because the appeal filed in 2015 was to be treated as pending on the specified date, 31 January 2020, in view of the Tribunal's 3 September 2020 order recalling its 26 March 2019 dismissal. The court quashed the respondent's rejection of the petitioner's declaration under the VSV Act and directed the respondent to consider and process the declaration within 12 weeks from receipt of the order.

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Issues:
Petitioner's eligibility for benefits under the Vivad se Vishwas scheme based on the pending appeal status as on the specified date of 31st January, 2020.

Analysis:
The petitioner filed a petition under Article 226 seeking directions to accept the declaration under the Vivad se Vishwas scheme for the Assessment Year 2010-11. The petitioner's return for A.Y. 2010-11 was scrutinized, leading to an assessment order assessing total income at Rs. 58,17,604. Subsequent appeals to CIT (A) and the Tribunal were dismissed, with a Miscellaneous Application filed by the petitioner to recall the dismissal order. The Vivad Se Vishwas Act, 2020 was enacted to reduce pending income tax litigation. The Tribunal allowed the Miscellaneous Application, reviving the Tax Appeal. The petitioner then filed a revised declaration under the VSV Act, which was rejected by the respondent, citing the absence of a pending appeal as of 31st January, 2020.

The petitioner argued that the appeal was restored by the Tribunal's order dated 3rd September, 2020, making it pending as of 31st January, 2020, entitling the petitioner to benefits under the VSV Act. The respondent contended that as of the specified date, no appeal or application to recall the order was pending, thus denying eligibility for the scheme benefits. The respondent relied on the definition of 'appellant' under the VSV Act and Circular No.21/2020 for clarification.

The Court analyzed the provisions of the VSV Act, emphasizing the need for the petitioner to be an appellant on the specified date to avail the scheme benefits. Despite the appeal not being pending as of 31st January, 2020, the Tribunal's order recalling the dismissal made the appeal pending on the specified date. The Court highlighted that when the petitioner filed the declaration, the appeal was already pending due to the Tribunal's order. Consequently, the Court found the rejection of the declaration by the respondent unjustified and directed processing of the petitioner's declaration under the VSV Act within 12 weeks.

In conclusion, the Court disposed of the petition, quashing the respondent's action and directing them to process the petitioner's declaration under the VSV Act. No costs were awarded in the matter.

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