Tax Dispute Withdrawn: Opportunity to Reapply Under New 2024 Scheme.

The Supreme Court concluded that both appeals were disposed of as withdrawn, allowing the appellants the opportunity to approach the relevant authority to avail benefits under the Direct Tax Vivad Se Vishwas Scheme, 2024. The Court granted the parties the liberty to return with an appropriate petition if they face additional challenges.

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Issues involved:
Challenge to the legality and validity of the High Court judgment affirming liability to pay interest under MAT provisions of the Income Tax Act, 1961. Interpretation of Direct Tax Vivad Se Vishwas Scheme, 2024 for availing benefits.

Analysis:
The Supreme Court considered the legality and validity of the impugned judgment by the High Court of Karnataka, which affirmed the liability to pay interest on income calculated under the MAT provisions of the Income Tax Act, 1961. The appellants challenged this judgment. The Revenue pointed out that the issue is covered by a previous decision of the Court in a specific case. However, the appellants argued that they seek to avail benefits under the Direct Tax Vivad Se Vishwas Scheme, 2024, which requires the appeal to be pending before the High Court as of a specified date. They referred to Circular no. 12 of 2024 issued by the Government of India, Ministry of Finance, Department of Revenue, Central Board of Direct Taxes, which provides guidelines on the Scheme. The Scheme outlines eligibility criteria for availing benefits, including the status of appeals or petitions pending before appellate forums or the Dispute Resolution Panel under the Income Tax Act, 1961.

The Court examined the relevant clauses of the Direct Tax Vivad Se Vishwas Scheme, 2024, to determine the eligibility of the appellants to avail benefits under the Scheme. The Scheme defines who qualifies as an appellant eligible for the Scheme, including those with pending appeals or petitions before appellate forums or the Dispute Resolution Panel. The Court also considered a specific scenario where a taxpayer's appeal is pending as of a specified date but is disposed of before filing a declaration under the Scheme. The Scheme clarifies that such cases may not be eligible unless the taxpayer files a declaration and intimates the appellate authority, which may consider not disposing of the appeal. Additionally, the Court reviewed clause 10 of the circular, which emphasizes that the Scheme does not allow for settling issues in part; disputes must be resolved in full to be covered under the Scheme.

Based on the analysis of the Scheme and relevant provisions, the Court concluded that both appeals are disposed of as withdrawn, granting the appellants liberty to approach the authority for availing benefits under the Scheme 2024. The Court also provided the parties with the liberty to return if they encounter further difficulties by filing an appropriate petition.

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