Strict compliance under the Sabka Vishwas Scheme led to lapse for delayed payment, while penalty was deleted absent mala fide intent.

The Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 was held to lapse where the declarant failed to pay the amount in SVLDRS-3 within the prescribed 30 days, as Section 127(5) treats non-payment within time as a lapse of the declaration. The scheme language was applied strictly, with no scope to extend the benefit on equitable grounds or because of delayed credit, so the demand and interest were sustained. Penalty was, however, deleted because the delay occurred during the COVID-19 period after voluntary disclosure under the amnesty scheme, and mala fide intent was not established.

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Issues: (i) Whether the declarant's benefit under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 lapsed for failure to pay the amount stated in SVLDRS-3 within the stipulated time; (ii) Whether the penalty imposed pursuant to the demand could be sustained.

Issue (i): Whether the declarant's benefit under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 lapsed for failure to pay the amount stated in SVLDRS-3 within the stipulated time.

Analysis: The scheme required payment of the amount indicated in SVLDRS-3 within 30 days, and Section 127(5) treated non-payment within time as lapse of the declaration. The stipulated period expired on 30.06.2020, whereas payment was made only on 22.10.2020. The language of the provision was found to be clear and unambiguous, leaving no scope to extend the scheme benefit on equitable grounds or because of delayed credit.

Conclusion: The declaration had lapsed and the demand and interest were upheld.

Issue (ii): Whether the penalty imposed pursuant to the demand could be sustained.

Analysis: Although the demand and interest were held recoverable, the delay occurred in the context of the COVID-19 period after a voluntary disclosure under the amnesty scheme. On these facts, the element of mala fide intent was not established, and the case did not justify penalty.

Conclusion: The penalty was set aside in favour of the assessee.

Final Conclusion: The appeal succeeded only to the limited extent of deletion of penalty, while the confirmation of the tax demand and interest was maintained.

Ratio Decidendi: Where a statutory amnesty scheme prescribes payment within a fixed period and declares non-payment within time to result in lapse, the provision must be applied according to its plain terms, while penalty may still be denied if mala fide intent is not established.

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