Unreasoned rejection of Vivad Se Visvas declaration on interest liability was set aside for fresh consideration on merits.

A declaration under the Direct Tax Vivad Se Visvas Scheme relating to interest charged for delayed filing of return and delayed payment of advance tax could not be rejected without proper consideration of its coverage and merits. The Delhi HC held that an unreasoned rejection was unsustainable and set it aside, directing the competent authority to re-examine the declaration afresh and decide it on merits in accordance with the Act and the Rules.

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Issues: Whether the rejection of the petitioner's declaration under the Direct Tax Vivad Se Visvas Scheme in relation to interest charged under Sections 234A, 234B and 234C of the Income-tax Act, 1961 was sustainable, and whether the declaration required reconsideration on merits.

Analysis: The petitioner's dispute arose from levy of interest on account of delayed filing of return and delayed payment of advance tax. The declaration filed under the scheme was rejected without reasons. The Court followed the binding approach in the cited decisions and held that the controversy concerning interest liability was covered for reconsideration in accordance with the statutory procedure. In the circumstances, the impugned rejection could not be sustained and the matter had to be examined afresh by the competent authority.

Conclusion: The rejection order was set aside and the declaration was directed to be re-examined and decided on merits in accordance with the Act and the Rules.

Final Conclusion: The petitioner obtained relief to the extent of annulment of the impugned rejection and a direction for fresh consideration, but the declaration itself was not finally allowed.

Ratio Decidendi: A declaration under the settlement scheme concerning interest liability cannot be rejected without proper consideration of its coverage and merits, and an unreasoned rejection is liable to be set aside for fresh adjudication under the statutory procedure.

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