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2021 (9) TMI 1237 - HC - Income TaxParticipation in the process under the VsV Scheme - Condonation of delay - whether in case of the present petitioner, any such appeal was pending or can he be said to be an appellant within the meaning of the VsV Act? - HELD THAT - Time period for filing the appeal, if has already expired before 31st January, 2020, but an application for condonation of delay has already been filed, a deeming fiction is provided. According to the Revenue if the time for filing of the appeal expired during the period from 1st April, 2919 to 31st January, 2020( both the dates included in the period) and if the application for condonation of delay is filed before the date of issuance of this circular and if the appeal is admitted by the appellate authority before the date of filing of the declaration, such appeal is deemed to be pending as on 31.01.2020. As rightly contended on the strength of the decision rendered in the case of Boddu Ramesh ( 2021 (6) TMI 1054 - TELANGANA HIGH COURT ) by the learned advocate for the petitioner that condonation of delay whenever is accepted by the appellate authority, the same would relate back to the original date of filing of the appeal, as if the appeal is filed within the time period given under the statute. The Telengana High Court also has taken into consideration the Finance Bill memorandum containing explanation of every clause, intent and purpose for the proposal while laying the said Bill along with the circular of the CBDT which explained each clause while issuing the Circular. The Finance Minister s speech, its intent and purpose as also the insertion, amendment and modifications have been regarded. The Apex Court has held that the CBDT under section 119 is conferred the powers with the general objective for use of powers and proper administration of this Act. Therefore, when the Circular has been issued by the CBDT on 04.12.2020 answering to one of the Frequently Asked Questions, it is not expected of the Revenue to contend contrary to the said guidelines in the answer given in the Circular. Obviously, the Circular cannot override the express provisions of the Act and they are to be considered clarificatory in nature. They are basically meant to guide the officers and those, who execute the law in the field. They may not also bind the Court while it interprets statutory provisions. Court when regards and takes into consideration the fundamental principles along with the provision of Limitation Act, particularly Section 5 of the Limitation Act seeking condonation of delay in preferring any petition, appeal or litigation or proceedings, it is meant for exercise of discretion by the adjudicatory authority, which, if is satisfied with the sufficiency of cause, is expected to condone the delay. And, once the application for condonation of delay in any such matter is preferred and the same is allowed, it would be construed as if there is no delay and the appeal is preferred well within time.
Issues Involved:
1. Rejection of declaration forms under the Direct Tax Vivad se Vishwas Act, 2020 (VsV Act). 2. Eligibility of the petitioner as an appellant under the VsV Act. 3. Interpretation of the specified date and conditions for pending appeals under the VsV Act. 4. Application of CBDT circular and FAQs in determining eligibility. 5. Impact of COVID-19 pandemic on procedural timelines. Detailed Analysis: 1. Rejection of Declaration Forms: The petitioner challenged the rejection of declaration Forms No.1 and 2 filed under the VsV Act and VsV Rules, arguing it was contrary to law and violated fundamental rights. The forms were rejected by respondent No.1, and the petitioner sought relief from the High Court, including the acceptance of the application and a stay on penalty proceedings initiated under section 274 read with section 271(1)(c) of the Income Tax Act. 2. Eligibility of the Petitioner as an Appellant: The core issue was whether the petitioner qualified as an "appellant" under the VsV Act, which required that an appeal be pending as on the specified date, 31.01.2020. The petitioner had filed an appeal before the ITAT, which was delayed due to hospitalization and the COVID-19 pandemic. The ITAT condoned the delay on 23.02.2021, allowing the petitioner to argue the case on merits or opt for the VsV Scheme. 3. Interpretation of the Specified Date and Conditions for Pending Appeals: The VsV Act defines an appellant as one whose appeal is pending as on the specified date. The petitioner’s appeal was not filed within the original timeline but was condoned by the ITAT. The court examined whether the condonation of delay would relate back to the original filing date, thus making the appeal pending as of the specified date. 4. Application of CBDT Circular and FAQs: The respondents argued that the petitioner’s appeal was not pending as of the specified date, citing a CBDT circular dated 04.12.2020. FAQ No.59 of the circular stated that appeals filed with condonation applications before 04.12.2020 and admitted before filing the declaration would be deemed pending as of 31.01.2020. The petitioner contended that this interpretation was restrictive and discriminatory, violating Article 14 of the Constitution. 5. Impact of COVID-19 Pandemic on Procedural Timelines: The court considered the impact of the COVID-19 pandemic on procedural timelines, noting the extensions provided by the Apex Court and various notifications. The petitioner’s delay in filing the appeal was attributed to hospitalization and pandemic-related restrictions, which were deemed valid reasons for condonation. Judgment: The court held that the petitioner’s appeal, once condoned by the ITAT, should be considered as if filed within the original timeline, making it pending as of the specified date. The court emphasized that the VsV Act aimed to resolve tax disputes and reduce litigation, and a restrictive interpretation would contradict this intent. The court quashed the rejection order dated 30.03.2021 and directed the respondent to accept the petitioner’s declaration within three days, allowing participation in the VsV Scheme. The petitioner was instructed to comply with tax payment requirements by 30.09.2021, with all procedural actions to be facilitated by the respondent in accordance with the law.
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