TaxTMI 
TaxTMI 
2026 (9) TMI 521
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....arried out at the premises of the firm. Such operation resulted in passing of an assessment order dated 28.03.1994, whereby additional income of Rs. 2,61,15,066/- was assessed. In addition to the same, interest under Section 234B of the 1961 Act was also imposed. 3. The assessment order dated 28.03.1994 was challenged by the firm through filing of a petition before the Settlement Commission under Section 245D(1) of the 1961 Act, which petition was disposed of on 31.10.1996 reducing the additional income of the firm to Rs. 2,45,54,225/-. The firm challenged the order of the Settlement Commission dated 31.10.1996 through filing of a writ petition before this Court being CWP-19267-1996, which petition was disposed of on 07.03.2024 upholding the order of the Settlement Commission. 4. In the meanwhile, through an order dated 11.03.2011, passed by the respondent-income tax authorities, interest under Section 220(2) of the 1961 Act @ Rs. 82,78,452/- along with interest under Section 234B of the 1961 Act @ Rs. 24,01,258/- was imposed upon the firm. Challenging the imposition of aforesaid interest, the firm approached this Court through CWP-7757-2011, which petition was disposed of on....
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.... which date, dispute with regard to the demand of interest, imposed upon the petitioner, by the respondent-authorities under Section 220(2) and 234B of the 1961 Act, along with the rejection of the petitioner's prayer for waiver of such interest, was pending through the filing of a writ petition before this Court by the petitioner being CWP-18030-2021 and therefore, the petitioner would clearly fall within the definition of "appellant" under Section 89(1)(a)(i) of the 2024 Act. 10. It was further submitted on the petitioner's behalf that the reliance placed by the respondent-authorities on the answer to FAQ 15 by the CBDT as contained in Circular No. 12/2024 dated 15.10.2024, to reject the petitioner's case is wholly misconceived because the question inviting the answer of the CBDT was that if, against the demand of interest under Sections 234A, 234B and 234C, where there was no appeal provided but the assessee had filed a waiver application before the competent authority, which was pending on the specified date, whether such assessee would be covered under the scheme, to which question, the answer was given in the negative. Such answer would have no application to t....
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....ed to the benefit of the 2024 Scheme and all that what was required to be seen was as to whether at any point of time an assessee had filed a waiver application under Section 220(2A) of the 1961 Act and if the answer to the afore question was in the affirmative, such assessee would not be covered under the 2024 Scheme. 14. Learned counsel for the parties have been heard and with their able assistance we have also examined the material on record. 15. At the outset, it would be apposite to refer to the relevant portions of Sections 88, 89 and 97 of the 2024 Act which provisions are reproduced below :- "88. Short title and commencement: (1) This Scheme may be called the Direct Tax Vivad Se Vishwas Scheme, 2024. (2) It shall come into force on such date as the Central Government may, by notification in the Official Gazette, appoint. 89. Definitions: (1) In this Scheme, unless the context otherwise requires,- (a) "appellant" means- (i) 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 a....
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....y the appellant under the provisions of the Income-tax Act, as computed hereunder :- (A) in a case where any appeal, writ petition or special leave petition is pending before the appellate forum as on the specified date, the amount of tax that is payable by the appellant if such appeal or writ petition or special leave petition was to be decided against him; (B) 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; (C) in a case where Dispute Resolution Panel has issued any direction under sub-section (5) of section 144C of the Income-tax Act, and the Assessing Officer has not completed the assessment under sub-section (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 Officer in pursuance of the said assessment under sub-section (13) thereof; (D) in a case where an application for revision under section 2....
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....rd is of the opinion that it is necessary in the public interest so to do." (emphasis supplied) 16. The 2024 Scheme was floated under Section 88 of the 2024 Act. A harmonious reading of Sections 89(1)(a), (b) and (n) leads us to the irresistible conclusion that an "appellant" would mean a person who has filed an appeal before the authorities designated under the 1961 Act or the High Court or a person who has filed a writ petition before a High Court or the Supreme Court or has filed a special leave petition before the Supreme Court, which appeal or petition is pending on the specified date i.e. 22.07.2024. 17. After a combined reading of Sections 89(1)(h) with 89(1)(o) of the 2024 Act, we further conclude that "disputed interest" would be the interest determined by the income tax authorities under the provisions of the 1961 Act, the imposition of which is challenged by an "appellant" defined under Section 89(1)(a) of the 2024 Act, which challenge remains pending on the specified date and that such "disputed interest" would constitute arrears of tax. 18. Thus, if a person against whom interest has been determined and imposed under the 1961 Act by the income tax authoriti....
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....IV of Finance (No.2) Act, 2024 to provide for dispute resolution in respect of pending income tax litigation. The objective of the Scheme is to, inter alia, reduce pending income tax litigation, generate timely revenue for the Government and benefit taxpayers by providing them peace of mind, certainty and savings on account of time and resources that would otherwise be spent on the long- drawn and vexatious litigation process. 2. The commencement date of the said Scheme has already been notified as 1.10.2024. Further, Rules and Forms for enabling the Scheme have also been notified on 20.09.2024. After enactment of the DTVSV Scheme, 2024, several queries were received from the stake-holders seeking guidance in respect of various provisions contained therein. 3. Accordingly, under Section 97 of the DTVSV Scheme, 2024 which empowers the Board to issue directions or instructions in public interest, following Guidance Note in the form of answers to the frequently asked questions (FAQs) is hereby issued. This will be helpful for the tax-payers for creating better awareness and understanding with respect to the provisions of the Scheme. XXXX XXXX XXXX XXXX &n....
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....n 220(2A) of the 1961 Act, would also result in defeating the very purpose behind the 2024 Scheme which was introduced inter-alia for reducing pending income tax litigation, generate timely revenue for the Government and benefit taxpayers by providing them peace of mind along with certainty and savings on account of time and resources that would otherwise be spent on a long drawn and vexatious litigation process. To exclude the case of a genuine disputant like the petitioner would also defeat the intent behind floating of the 2024 Scheme which was clearly to include as many assessees whose disputes with the Income Tax Department were pending before different forums/Courts. A purposive construction which is required to be given to the 2024 Scheme clearly warrants consideration of the petitioner's case under the same. 24. The afore view of ours finds support from the following observations made by a Division Bench of the Delhi High Court in Kapri International Pvt. Ltd.'s case (supra) with which we agree :- "14. Gravamen of the petitioner's case is that the declaration under Form I & II requesting for settlement of their tax arrears relating to disputed intere....
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....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. Hon'ble Supreme Court in Tanna & Modi v. CIT, Mumbai XXV And Ors., (2007) 7 SCC 434, held forth on this principle and which is instructive in this context as under: 22. In Francis Bennion's Statutory Interpretation, purposive construction has been described in the following manner: "A purposive construction of an enactment is one which gives effect to the legislative purpose by- (a) following the literal meaning of the enactment where that meaning is in accordance with the legislative purpose (in this Code called a purposive and literal construction), or (b) applying a strained meaning where the literal meaning is not in accordance with the legislative purpose (in the Code called a purposive and strained construction)." (Reference is also made to Bombay Dyeing & Mfg. Co. Ltd. (3) v. Bombay Environmental Action Group [(2006) 3 SCC 434] and National Insurance Co. Ltd. v. Laxmi Narain Dhut [(2007) 3 SCC 700].)" Fourthly, even as ....