2023 (8) TMI 684 - HC - Income Tax

Vivad se Vishvas Scheme - Condoning the delay of three days in depositing the balance amount payable under the Direct Tax Vivad Se Vishwas Scheme - HELD THAT - From the pleadings of the parties and after perusal of the record it appears that the Ministry of Finance Government of India has issued the Vivad se Vishvash Scheme in pursuance of the Act 2020. In section 2(l) the last date means such date as may be notified by the Central Government in the official gazette. As per Section 3 of the Act 2020 if the declarant for resolution for resolution of disputed tax files a declaration to designated authority in accordance with the provision of Section 4 in respect of tax arrears as mentioned in the chart before the last date then the designated authority within 15 days from the date of receipt of declaration will determine the amount payable by the declarant and grant certificate to the declarant containing particulars of tax arrears and the amount payable after such declaration as per Form-III then the declarant shall pay the amount determined within 15 days from the date of receipt of certificate. Delay of three days occurred because on 1.11.2021 the petitioner met with an accident and suffered a knee injury and therefore he could not approach the bank to clear the cheque or credit the amount on 1.11.2021. For this delay of three days the Income Tax Department did not accept the amount deposited by the petitioner under the Vivad is Vishwas Scheme. Thereafter the petitioner s application for condonation of delay of three days was also rejected by the Chairman of the Central Board of Direct Tax by order dated 25.8.2022. The fact of dropping of cheque in the drop box as well as the accident of the petitioner was not disputed by the respondent in the counter affidavit. Now the fact remained is whether the delay of three days in depositing the arrears of tax can be condoned considering the fact of unforeseen circumstances which were beyond the control of the petitioner. This Court is of the view that a delay of three days in depositing the arrears of tax deserves to be condoned and the amount balance tax deposited by the petitioner be accepted by the respondents treating the same well within time as per the scheme of Act 2020 and also the impugned order /letter dated 25.8.2022 passed by Central Board of Direct Tax is hereby quashed. Accordingly the writ petition is allowed.

Summary

Issues Involved:

1. Validity of rejection of application for condonation of delay in depositing balance tax under the Direct Tax Vivad Se Vishwas Act, 2020.
2. Consideration of unforeseen circumstances as a valid reason for delay.

Summary:

1. Validity of rejection of application for condonation of delay in depositing balance tax under the Direct Tax Vivad Se Vishwas Act, 2020:

The petitioner challenged the order dated 25.8.2022, which rejected their application for condoning a three-day delay in depositing the balance amount under the Direct Tax Vivad Se Vishwas Act, 2020. The petitioner submitted his declaration on 5.6.2020, and the designated authority issued a certificate in Form-III on 9.11.2020, requiring payment by 31.12.2020. The last date was extended multiple times, with the final extension to 31.10.2021. The petitioner dropped a cheque in the bank's drop box on 31.10.2021, a Sunday, but the challan was issued on 3.11.2021. The petitioner also suffered an accident on 1.11.2021, leading to a delay in approaching the bank.

2. Consideration of unforeseen circumstances as a valid reason for delay:

The petitioner argued that the delay was due to unforeseen circumstances, including the last date falling on a Sunday and a knee injury. The Delhi High Court's judgment in Writ Petition (C) No. 3560 of 2022 and the Supreme Court's judgment in Shekhar Resorts Ltd. vs. Union of India were cited, where delays due to extraneous circumstances were condoned. The court noted that the Ministry of Finance's notifications extended the last date for payment, and the petitioner had complied with the requirements, including dropping the cheque on the last date.

Conclusion:

The court held that the delay of three days in depositing the balance tax was due to unforeseen circumstances beyond the petitioner's control. The court quashed the impugned order dated 25.8.2022 and directed the respondents to accept the balance tax deposited by the petitioner, treating it as within time under the scheme of the Act, 2020. The writ petition was allowed.