TaxTMI 
TaxTMI 
2022 (11) TMI 1304
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....come filed by the petitioner was selected for scrutiny assessment and a final assessment order dated 29th October, 2010 under Section 143 read with Section 144C of the Income Tax Act, 1961 (for short 'Act') was passed by the Assessing Officer for the Assessment Year 2007-08 making various adjustments to the total income of the Petitioner. 3. The Petitioner challenged the assessment order by filing an appeal before the Tribunal which was disposed of vide order dated 19th September, 2014 deciding the various issues as under: a. Salary to expatriate employees - allowed in favour of petitioner-assessee. b. Deferred Guarantee Commission - allowed in favour of petitioner-assessee. c. Interest received by HO/overseas branches - allowed in favour of petitioner-assessee. d. Deduction for interest paid to HO/overseas branches - allowed in favour of petitioner-assessee. e. Interest received from HO/overseas branches - decided against the petitioner-assessee. f. Applicability of Section 115JB to foreign banks - allowed in favour of petitioner-assessee. g. Taxability of ECB Interest - remanded back. h. Rate of tax - deci....
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....n applicant could settle one of various litigations that was pending with an appellate authority and it was not necessary to settle all the appeals for a particular assessment year. 11. On 29th January, 2021, the application was rejected by the Respondent-Department on the ground that the Petitioner is settling part of the appeal and ought to have also settled the Respondent-Department's SLP pending in the Supreme Court for the same assessment year. In this regard, the Respondents relied on FAQ Nos.7, 11, 14 and 36 issued by the CBDT vide Circular No.7/2020 dated 22nd April, 2020 which are reproduced hereinbelow:- "Question No. 7. If assessment has been set aside for giving proper opportunity to an assessee on the additions carried out by the AO. Can he avail the Vivad se Vishwas with respect to such additions? Answer: If an appellate authority has set aside an order (except where assessment is cancelled with a direction that assessment is to be framed de novo) to the file of the AO for giving proper opportunity or to carry out fresh examination of the issue with specific direction, the assessee would be eligible to avail Vivad se Vishwas. However, the appellan....
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....ns of Section 2(1)(j) read with Section 2(1)(a) of DTVSV Act, which consider each appeal as a separate dispute for the purpose of computing disputed tax under the Act. He pointed out that the definition of "dispute" under Rule - 2(b) of the Direct Tax Vivad se Vishwas Rules, 2020 (for short 'DTVSV Rules') considers an appeal or an SLP as a separate dispute for the purpose of Rules 9, 10 and 11 in relation to computation of disputed tax in certain situations. He also emphasised that Sections 3 and 4 of the DTVSV Act allows an assessee to file a declaration for any appeal or an SLP which is pending before an appellate authority and does not require the assessee to file a declaration for all the appeals pending for an assessment year and after the settlement of the dispute, only such appeal is to be withdrawn for which the application was made by an assessee. In support of his contention, he relied on Circular No.9/2020 dated 22nd April, 2020 issued by CBDT. The relevant portion of the said Sections, Rules and Circular referred to hereinabove are reproduced hereinbelow:- "2. Definitions.-(1) In this Act, unless the context otherwise requires,- xxx xxx xxx (j....
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....diation initiated or given notice thereof, or objections filed or to be filed before the Dispute Resolution Panel under section 144C of the Income-tax Act, or application filed under section 264 of the Income-tax Act; FAQ No.36 Question No. 36. In a case ITAT has passed order giving relief on two issues and confirming three issues. Time to file appeal has not expired as on specified date. The taxpayer wishes to file declaration for the three issues which have gone against him. What about the other two issues as the taxpayer is not sure if the department will file appeal or not? Answer: The Vivad se Vishwas allow declaration to be filed even when time to file appeal has not expired considering them to be a deemed appeal. Vivad se Vishwas also envisages option to assessee to file declaration for only his appeal or declaration for department appeal or declaration for both. Thus, in a given situation the appellant has a choice, he can only settle his deemed appeal on three issues, or he can settle department deemed appeal on two issues or he can settle both. If he decides to settle only his deemed appeal, then department would be free to file appeal on the tw....
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....me-tax, [1993] 202 ITR 375 (Bombay), Dimension Data Asia Pacific PTE Ltd. vs. Deputy Commissioner of Income-tax, [2018] 96 taxmann.com 182 (Bombay). ARGUMENTS ON BEHALF OF THE RESPONDENTS 15. Per contra, Mr. Zoheb Hossain, learned counsel for the respondents-revenue stated that the DTVSV Act treats one assessment year as a whole and therefore if issues arise out of one assessment year, then the assessee is required to settle all such issues relating to such assessment year which cannot be dissected at the choice of the assessee. He submitted that the unit for settlement of dispute under the DTVSV Act is an assessment year and not an appeal or writ petition or a special leave petition. He emphasised that the submissions of the Department were based on the jurisdictional requirement of Section 2(j) of the DTVSV Act that there must be disputed tax qua an assessment year and not qua the issues relating to an assessment year. 16. He submitted that in terms of FAQ 11 of the Circular No. 9 of 2020, an assessee cannot settle part of a pending dispute for a single assessment year. Further, according to him FAQ 14 of Circular 9 of 2020 stipulated that the Petitioner must settle all ....
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.... Revenue's deemed appeal before this Court and had not sought settlement of the Revenue's pending SLP before the Supreme Court. Therefore, according to him, the declaration filed by the petitioner had been rightly rejected. 20. Mr. Zoheb Hossain, learned counsel for the respondents-revenue, stated that the reliance placed by the Petitioner upon FAQ 19 was misplaced, as the same merely gave an option to the assessee in a specific situation wherein two assessment orders are passed, one under Section 143(3) of the Act and the other under Section 147/143(3).He pointed out that in the present batch of matters, the appeals pending at different forums originated from the same first assessment order dated 29th October, 2010 that was subsequently set aside by the ITAT vide order dated 19th September, 2014. 21. He further submitted that FAQ 36, provided for deemed appeals, and allows an assessee to seek settlement of either his appeal or the department's appeal or both, when actual appeals may not have been filed. 22. He also submitted that FAQ 40 applied to cases where one appeal was filed by revenue and another by the assessee. He stated that the same was not applicable to the pre....
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....er submitted that FAQ No.14 of the Circular stated that an assessee was not allowed to pick and choose issues for settlement of an appeal and is required to settle all the issues with respect to one order. In the instant case, the application filed by the Petitioner covered all the issues arising from the order of the Tribunal dated 16th September, 2019. Therefore, according to him, the reliance placed by the Department on the aforesaid FAQs was incorrect and bad in law. COURT'S REASONING RULE OF INTERPRETATION TO BE APPLIED 26. Having heard learned counsel for the parties, this Court is of the view that the primary question that needs to be answered is what is the rule of interpretation that the Court must apply while interpreting the DTVSV Act. 27. Every modern legislation is actuated with some policy. While the intent of taxing statutes is to collect taxes, the intent of amnesty acts like Voluntary Disclosure of Income Scheme (for short 'VDI Scheme') is to provide an opportunity to the assesses to declare their undisclosed income on fulfilling certain terms and conditions. There are also legislations which are directed to cure some mischief and bring into effect some....
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....ed 'Vivad Se Vishwas' scheme, a taxpayer would be required to pay only the amount of the disputed taxes and will get complete waiver of interest and penalty provided he pays by 31st March, 2020. Those who avail this scheme after 31st March, 2020 will have to pay some additional amount. The scheme will remain open till 30th June, 2020..... I hope that taxpayers will make use of this opportunity to get relief from vexatious litigation process..." From the aforesaid, it is apparent that DTVSV Act, 2020 is a beneficial/remedial piece of legislation enacted by the Parliament to reduce pendency of cases, generate timely revenue for the government and provide certainty and savings of resources that would be spent on the long drawn litigation process. It is a statute which provides benefit as it recovers the taxes for the Department upfront without having to wait to succeed in the litigation which itself is uncertain. DTVSV Act also provides a sop to an assessee, as it puts an end to the litigation and the assessee is relieved of payment of interest and penalty if the same were to imposed. The DTVSV Act also benefits the society as it reduces litigation, acrimony, decongests the....
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....er of Income Tax, Rajkot Versus Shatrusailya Digvijaysingh Jadeja, (2005) 7 SCC 294 held that the object of the said Scheme was to settle tax arrears locked in litigation at a substantial discount and it provided that any tax arrears could be settled by paying the prescribed amount of tax arrears, and it offered benefits and immunities from penalty and prosecution. The Supreme Court held that the "Kar Vivad Samadhan Scheme" was in substance a recovery scheme though it was nomenclatured as a "litigation settlement scheme" and was not similar to the earlier VDI Scheme. It further held that the object of "Kar Vivad Samadhan Scheme" was to put an end to all pending matters in the form of appeals, reference, revisions and writ petitions under the IT Act/Wealth Tax Act and the object was to put an end to litigation in various forms and at various stages under the IT Act/Wealth Tax Act and therefore the rulings on the scope of appeals and revisions under the IT Act or VDI Scheme will not apply. Consequently, the judgment of the Supreme Court in Dilip Kumar (supra) which deals with interpretation of exemption notification, has no application to the present case. THE UNIT FOR SETTLEMENT ....
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....ever, this issue is not at all connected with the deemed appeal arising from the order of the Tribunal dated 16th September, 2019 wherein the issue of taxability of ECB interest and levy of interest under Section 234D of the Act is involved. Since, the issues involved in both the appeals are different and unconnected, this Court is of the view that the contention of the Department that the Petitioner ought to have settled the SLP pending in the Supreme Court, along with the deemed appeal of the Department is incorrect and bad in law. THE RESPONDENTS RELIANCE ON FAQ-7, 27, 11 AND 14 IS MISCONCEIVED AND UNTENABLE IN LAW. 38. The respondents'-revenue reliance on FAQ-7, 27, 11 and 14 is misconceived and untenable in law. The DTVSV Act permits the settlement of a dispute which is pending either in appeal, writ petition or SLP. The assessee cannot settle any issue which may arise in the assessment proceeding pending before the AO. However, FAQ-7 of the Circular dilutes the rigour and by a concession, enables the assessee to make an application under DTVSV Act for the issues remanded to the AO by an appellate authority; the only condition being that the assessee must also settle the....
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....015-16. The said assessment order is pending with ITAT. Subsequently another order under section 147/143(3) was passed for the same assessment year and that is pending with CIT (Appeals)? Could both or one of the orders be settled under Vivad se Vishwas? Answer: The appellant in this case has an option to settle either of the two appeals or both appeals for the same assessment year. If he decides to settle both appeals then he has to file only one declaration form. The disputed tax in this case would be the aggregate amount of disputed tax in both appeals. (emphasis supplied) 44. Consequently, the contention of the respondents-revenue that the option is available to the petitioner only in a case where there are cross appeals arising from the same order is incorrect as FAQ-19 in unequivocal terms indicates that the assessee has an option to choose the appeals to be settled under the DTVSV Act and there is no obligation on the petitioner to settle all the appeals filed by the assessee for a particular assessment year. CONCLUSION 45. Keeping in view the aforesaid, this Court is of the view that an assessee is free to settle any appeal under the DTVSV Act and is no....