TaxTMI 
TaxTMI 
2024 (11) TMI 86
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....g the interregnum, the petitioner was also proceeded to wind up its affairs under the provisions of the Companies Act 1956. In fact, the company was also ordered to be wound up by the Court which was later set aside, details of which is captured in W.P.No.12500 of 2010 passed by this Court. 4. After paying the disputed tax, the petitioner approached the fourth respondent for waiver of interest imposed under Section 234A, 234B and 234 C of the Income Tax Act, 1961 in terms of Circular No.400/29/2002-IT(B) dated 26.06.2006. The fourth respondent herein (first respondent in W.P.No.12500 of 2010) however rejected the same vide order dated 16.03.2010 bearing reference C.No.CCII/B(14)2006-07. Thus, W.P.No.12500 of 2010 filed by the petitioner was eventually partly allowed on 10.02.2020 by quashing the aforesaid impugned order dated 16.03.2010 with the following observations:- "35. Under these circumstances, I am of the view that there should be a waiver of interest under Section 234A, Section 234B and Section 234C of the Income Tax Act, 1961 for the period between 18.06.2001 and 27.10.2006 alone. 36. I therefore remit the case back to the 2nd respondent to compute th....
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....t in the following two cases:- i) Mrs.Premalatha Mohan Agarwal vs. Principal Commissioner of Income Tax, Pune, (2022) 134 taxmann.com19 ( Bombay); (ii)Kapri International (P.) Ltd. vs. Commissioner of Income Tax -IV, (2022) 144 taxmann.com37 (Delhi) 8. On the other hand, the learned counsel for the respondent would submit that the petitioner has filed waiver application before the competent authority which was pending on the "specified date" as defined in Section 2(1)(n) of the said Act on 30.01.2020, the petitioner was not entitled to file an application for settling the dispute under Section 3 of the aforesaid scheme . 9. The learned counsel for the respondent would also refer to the clarification issued by the Central Board of Direct Taxes, Ministry of Finance, Department of Revenue in Circular No.9 of 2020 dated 22.04.2020 bearing reference (F.No.IT(A)/1/2020-TPL. A specific reference is made to answer to question No.13 wherein it has been answered as follows:- Question :- "With respect to interest under Section 234A, 234Bor 234C, there is no appeal but the assessee has filed waiver application before the competent authority which is pending as ....
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....fore March 31, 2020 will be 25 per cent. of disputed interest and if paid after April 1, 2020 but before the last date, 30 per cent. of disputed interest. The tax arrear is defined under section 2(1)(o) to mean ".. . disputed interest. . .". The disputed interest is defined under clause (h)(ii) of sub-section (1) of section 2 to mean "the interest determined in any case under the provisions of the Income-tax Act, 1961 where an appeal has been filed by the appellant in respect of such interest". Appellant means under clause (a)(i) of sub-section (1) of section 2 "a person in whose case an appeal or a writ petition or special leave petition has been filed either by him or by the Income-tax authority or by both, before an appellate forum and such appeal or petition is pending as on the specified date". Therefore, the petitioner was eligible to file this declaration under the Direct Tax Vivad Se Vishwas Act for the disputed interest that was charged under sections 234A or section 234B or section 234C. The concerned authority was, therefore, not correct in rejecting the declaration of the petitioner for reasons quoted above." 15. Similarly, the Delhi High Court in the case of Kapri I....
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....efines tax arrears includes distinct categories which are in the alternative and not cumulative, viz., disputed tax, disputed interest, disputed fee, disputed penalty. Therefore, for the Commissioner of Income-tax to contend that section 2(1)(h) relates to a disputed interest on a disputed tax only and therefore the petitioner was non- suited since there was no disputed tax but only disputed interest, is not tenable. Provisions have to read purposively and in harmony with the scheme of the Vivad Se Vishwas Act, and its intent. It is a well settled principle of law that a statute should be given a purposive construction in order to give effect to its legislative purpose. This, not being a taxing statute but one which propounds a dispute resolution scheme for tax disputes would be amenable to a purposive construction. The hon'ble Supreme Court in Tanna and Modi v. CIT [2007] 292 ITR 209 (SC) ; (2007) 7 SCC 434, held forth on this principle and which is instructive in this context as under (page 220 of 292 ITR) : "In Francis Bennion's Statutory Interpretation, purposive construction has been described in the following manner : 'A purposive constr....
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....disputed tax, interest or penalty in relation to an assessment or reassessment order or against disputed interest, disputed fees where there is no disputed tax. Further, the appeal may also be against the tax determined on defaults in respect of tax deducted at source or tax collected at source." 16.Reliance by the Commissioner of Income-tax on FAQ-13 is not tenable since as rightly argued by the learned counsel for the petitioner FAQ-13 relates to a pending waiver application before the Department and not a proceeding emanating out of a decision by the Department on a waiver application, which Company Application 577 of 2019 was. This is also obvious since if the Department itself is seized of a demand by the assessee and has not passed a decision on it, then there is no "dispute" as yet which has fructified. It may be noted that the definition of "dispute" under the Vivad Se Vishwas Act/Rules is in the nature of adjudicating proceedings arising out of Departmental decisions but not a proceeding pending before the Department. In essence, any proceeding challenging a decision by the Department in respect of tax, interest, penalty, fee etc. would come within the purview of ....
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....t petition has been passed by the appellate forum on or before the specified date, and the time for filing appeal or special leave petition against such order has not expired as on that date, the amount of tax payable by the appellant after giving effect to the order so passed; (C) in a case where the order has been passed by the Assessing Officer on or before the specified date, and the time for filing appeal against such order has not expired as on that date, the amount of tax payable by the appellant in accordance with such order; (D) in a case where objection filed by the appellant is pending before the Dispute Resolution Panel under section 144C of the Income-tax Act as on the specified date, the amount of tax payable by the appellant if the Dispute Resolution Panel was to confirm the variation proposed in the draft order; (E) in a case where Dispute Resolution Panel has issued any direction under subsection (5) of section 144C of the Income-tax Act and the Assessing Officer has not passed the order under subsection (13) of that section on or before the specified date, the amount of tax payable by the appellant as per the assessment order to be passed by the Assessing....
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....d in Section 2(1)(n) of the Direct Tax Vivad Se Vishwas Act, 2020 on 31.01.2020. 20. The expression "disputed interest" as defined in Section 2(1)(h) of the Direct Tax Vivad Se Vishwas Act, 2020 includes a situation where an appeal has been filed by the appellant in respect of such interest. 21. In this case, admittedly the petitioner has requested the Chief Commissioner of Income for waiver of interest in terms of Circular No. 400/29/2002-IT(B) dated 26.06.2006 which was denied vide order dated 16.03.2010. 22. Thus, the petitioner challenged the impugned order dated 16.03.2010 of the Chief Commissioner of Income in W.P.No.12500 of 2010 before this Court. W.P.No.12500 of 2010 was pending on the "specified date" as defined in Section 2(1)(n) of the Direct Tax Vivad Se Vishwas Scheme Act, 2020. 23. W.P.No.12500 of 2010 field by the petitioner came to be disposed on 10.02.2020. Thus, W.P.No.12500 of 2010 filed by the petitioner was disposed before the Direct Tax Vivad Se Vishwas Act, 2020 came to be passed by the Respective Houses of the Parliament on 05.02.2020 and received the Presidential assent on 17.03.2020. 24. To avail the benefit of the Direct Tax Vivad Se Vishw....
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....take the character of an appeal in its revisional jurisdiction under Article 226 of the Indian Constitution. 30. Therefore, though the expression "appeal" has not been defined in Direct Tax Vivad Se Vishwas Act, 2020, it has to be construed that W.P.No.12500 of 2010 was in the nature of an "appeal" as the writ petitioner had questioned the order dated 16.03.2010 of the Chief Commissioner of Income Tax in the said writ petition as the petitioner had taken a stand that the petitioner was eligible for waiver of interest under Circular No. 400/29/2002-IT(B) dated 26.06.2006. 31. Therefore, the petitioner was eligible to settle the dispute under Vivad Se Vishwas Act, 2020. As stated elsewhere there is no embargo in Section 3 and Section 4 of the said Act for the petitioner to file a declaration. 32. Even otherwise, the answer to the Question No.13 of the FAQ is not relevant to facts of the present case. In any event, such clarifications are not binding on the Court. The definition of "appellant" under clause (a)(i) of sub-section (1) of Section 2 expressly includes, inter alia, filing of a writ petition. Therefore, the Court is in agreement with the views of the Bombay High Cou....