TMI Blog2021 (9) TMI 1237X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 offic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pplication on the said grounds. The proceedings before the Settlement Commissioner were dismissed on 11.07.2017 and the Assessing Officer assumed the jurisdiction. The Assessing Officer passed the assessment orders for Assessment Year 1991-92 to 1994-95 on 09.07.2018. 3 Challenging the said order, the petitioner preferred the appeal before the Commissioner of Income Tax (Appeals) ( CIT (Appeals) for short), which was allowed partly on 09.10.2019. 4 A copy of the order was received on 18.10.2019 and, therefore, the appeal was to be preferred before the Income Tax Appellate Tribunal ( ITAT for short). The appeal before the ITAT was required to be filed by 18.12.2019 within 60 days. The petitioner, since was hospitalized, there was a delay in preferring the appeal. 5 Pandemic due to Covid-19 virus had further delayed the filing of the appeal, as according to the petitioner, most of Courts and Tribunals functioned only for urgent matters. The Apex Court in suo motu writ petition (Civil) No.3 of 2020 vide order dated 23.03.2020 and the ITAOffice order dated 30.03.2020 extended the time for filing of the appeal. There was a complete lockdown from 25.03.2020 and all offices rem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed 25.02.2021. 10.1 The petitioner awaited the issuance of Form No.3 by respondent No.1. However, no response was received. He had, on several occasions, reminded the respondents for issuance of Form No.3 but in vein. He has annexed four communications of 24.02.2021, 26.02.2021, 11.03.2021 and 18.03.2021. He also made representations to the Chairman urging to consider his genuine hardship, who was keen to take recourse to the VsV Scheme. 10.2 The petitioner had also provided the details of the taxes paid for Assessment Year 1991-92, 1992- 93, 1993-94 and 1994-95. The total taxes paid by him also have been expressly pointed out, which is as under: AY Demand as per record VsV Tax Amount Taxes Paid/Adjusted Net VsV Tax Payable 1991-92 46,62,481 6,73,039 23,830 6,49,209 1992-93 42,56,654 6,45,546 3,01,661 3,43,885 1993-94 10,74,861 56, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... C/SCA/7441/2021 ORDER DATED: 14/06/2021 verified from the tax portal about the status of his applications, which showed Rejected In view of the above submission, issue Notice to the respondents returnable on 21.06.2021. Direct service today is permitted. 13 In response to the said notice, the respondents appeared and filed affidavit-in-reply of the Principal Commissioner of Income-Tax (Central) Ahmedabad having each and every averment made in this petition. According to the respondent, section 4(6)B of the VsV Act provides that declaration filed shall be presumed never to have been made, if the declarant violates any of the conditions referred to in the Act. The petitioner since was found not eligible to avail the benefit, his applications were rejected. There is no flaw in the decision making process and rejection is in accordance with law. 14 The respondent has also provided the relevant dates necessary for adjudication at paragraph No.4, which is as under : Sr. No. Dates Particulars 1. 18.10.2019 Receipt of CIT(A) order dated 09.10.2019. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted 09.10.2019 of CIT (Appeals) was received by the petitioner on 18.10.2019 and appeal with an application for condonation of delay came to be filed only on 14.12.2020, which was required to be filed on or before 04.12.2020 as per the relaxation granted by CBDT and, therefore, the appeal cannot be deemed to be pending on 31.01.2020. 17 It is further the say of the respondent that the petitioner s application under the VsV Act was uploaded in Forms No.1 and 2 through ITBA/EFiling portal on 27.02.2021 in the Office of Principal Commissioner of Income Tax (Central) and it was immediately undertaken and processed. After careful consideration and in light of the Circular dated 04.12.2020, the status of application was intimated on 30.04.2021 through E-Filing portal. There was no requirement of passing a speaking order while rejecting the application. 18 Affidavit-in-Rejoinder is filed urging that the Board circular is construed in a restrictive manner, which would run contrary to the scheme of the Act of 2020 and powers exercised by Board under sections 10 and 11 to issue directions or orders in public interest or to remove difficulties. 19 According to the petitioner, after a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x authority or by both, before an appellate forum and such appeal or petition is pending as on the specified date; (ii) a person in whose case an order has been passed by the Assessing Officer, or an order has been passed by the Commissioner (Appeals) or the Income Tax Appellate Tribunal in an appeal, or by the High Court in a writ petition, on or before the specified date, and the time for filing any appeal or special leave petition against such order by that person has not expired as on that date; (iii) a person who has filed his objections before the Dispute Resolution Panel under section 144C of the Income-tax Act, 1961 (43 of 1961) and the Dispute Resolution Panel has not issued any direction on or before the specified date; (iv) a person in whose case the Dispute Resolution Panel has issued direction under sub-section (5) of section 144C of the Income-tax Act and the Assessing Officer has not passed any order under sub-section (13) of that section on or before the specified date; (v) a person who has filed an application for revision under section 264 of the Income-tax Act and such application is pending as on the specified date;; 1[Explanation.- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lant, which could be the appeal preferred by himself or by the revenue or by both before the appellate forum. 24 In the case of Boddu Ramesh (supra), the High Court of Telangana was dealing with an assessee petitioner, who had filed appeal on 19.02.2019 under section 246A before the Commissioner (Appeals) against the order of Assessing Officer and the same was dismissed. Assailing the order, the appeal was filed before the Tribunal along with an application to condone the delay in preferring the appeal. The Tribunal condoned the delay on 15.02.2021 and allowed the appeal and remanded the matter back by restoring the matter back to the Commissioner of Appeals. 25 Applicant before the Telangana High Court had submitted the application to avail the benefit under the said scheme in a prescribed format, but the application was rejected by the designated authority on the ground that there was no appeal pending as on specified date i.e. on 31.02.2020 and the declaration, according to the department, was invalid. The petitioner re-submitted the declaration/application under the Act in Form Nos.1 and 2 on 31.03.2021 opting to settle the dispute pending re-adjudication before the Commi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Further, the appeal may also be against the tax determined on defaults in respect of tax deducted at source or tax collected at source; (c) in appeals related to disputed tax, the declarant shall only pay the whole of the disputed tax, if the payment is made before 31st day of March, 2020 and for the payments made after 31st day of March, 2020, but on or before a date notified by the Central Government, the amount payable shall be increased by 10% of the disputed tax; (d) in appeals related to disputed penalty, disputed interest, or disputed fee, the amount payable by the declarant shall be 25 per cent of the disputed penalty, disputed interest or disputed fee, as the case may be, if the payment is made on or before 31st day of March, 2020. If the payment is made after 31st day of March, 2020, but on or before the date notified by the Central Government, the amount payable shall be increased to 30% of the disputed penalty, disputed interest, or disputed fee, as the case may be. 4. The proposed Bill shall come into force on the date it receives the assent of the President and declaration may be made thereafter up to the date to be notified by the Government. 20. A reading of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of litigation in relation to direct taxes before various forums was considered as a vexatious litigation process. Further, it would also be clear that the Government intended to free up the revenues which were 12 W.P.No.12038 of 2021 blocked on account of the tax disputes pending consideration in appeals before various forums. 23. It is trite law that the speech of Mover of Bill is very relevant for interpreting a new law, as held by the Supreme Court in K.P.VARGHESE V/s. INCOME TAX OFFICER, ERNAKULAM1 . 24. Thus, it would be safe to conclude that the scheme was intended to give a quietus to huge pending direct tax litigation either at the behest of the assessee or by the Department and collect only the disputed taxes by granting waiver of penalty and interest. If the above object is taken into consideration, the Act of 2020, as enacted, would have to be considered as a beneficial piece of legislation. 26 The Court also interpreted Question No.59 and took note of filing of the appeal with application for condonation of delay and admission of the appeal by the appellate authority to hold thus: 36. If Board circular is construed in such a restrictive manner, as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red as disputed tax , as defined under Section 2(1)(j)(B) of the Act of 2020. 16 W.P.No.12038 of 2021 41. Alternatively, it is to be noted that since, the last date for filing declaration had been extended up to 31.03.2021 and the Tribunal, having found cogent reasons to condone the delay and allowing the appeal filed by the petitioner and remitting the matter back to the CIT by its order dt.15.02.2021, would automatically revive and restore the appeal, which was dismissed by the CIT by his order dt.18.09.2019. Thus, by order of the Tribunal dt.15.02.2021, the appeal of the petitioner before of the CIT filed on 19.02.2019 would stand revived, and such restoring of appeal relates back the original date of filing, which is within the specified date as per Act of 2020. 27 The Delhi High Court in the case of Shyam Sunder Sethi (supra) was addressing the very issue of eligibility of the petitioner as the Appellant on the specified date under the VsV Act where also the petitioner had preferred the appeal along with condonation of delay application on 11.07.2019. 28 On 14.12.2020, the petitioner received a letter from respondent No.2 when he filed a declaration form with a req ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said provisions and the attendant provisions of the Act would show that the request should have been made in the prescribed format, i.e., form 1 and 2 before the specified date, i.e., 31.01.2020 and that the appeal (we are not concerned with other forms of action) should be pending before the appellate forum, [i.e., respondent no.3/ W.P.(C) 2291/2021 Pg. 8 of 10 CIT(A) in this case] on the specified date. 20. These provisions do not advert to what has been contended before us by Mr. Singh. 20.1 To shed light on what has been submitted before us by Mr. Singh, it would be necessary to extract FAQ 59 and the response provided thereto. Q 59. Whether the taxpayer in whose case the time limit for filing of appeal has expired before 31st January, 2020 but an application for condonation of delay has been filed is eligible? Answer: If the time limit for filing appeal expired during the period from 1st April, 2019 to 31st January, 2020 (both dates included in the period), and the application for condonation is filed before the date of issue of this circular, and appeal is admitted by the appellate authority before the date of filing of the declaration, such appeal will be deemed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... qua the same. We could have appreciated the stand of the respondents if a plea made for condonation of delay would have been 1 . See Prem s Judicial Dictionary, Vol. III 196: The word pending is thus defined in Stroud‟s Judicials Judicial Dictionary Ed. 3, vol. 3, p.2141: (1) A legal proceeding is pending‟s Judicial as soon as commenced and until it is concluded i.e., so long as the Court having original cognizance of it can make an order on the matters in issue, or to be dealt with, therein. Similar are the observations of Jessel, M.R. In Re Clagett‟s Judicials Estate Fordham v. Clagett, (1882) 20 Ch. D. 637 at p. 653. W.P.(C) 2291/2021 Pg. 10 of 10 rejected by respondent no.3/CIT(A) before the petitioner had filed Forms 1 and 2. If that situation obtained, the respondents could have, possibly, taken the stand that nothing was pending before the appellate forum. 30 The question that begs answer is as to 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. 31 Reference would be also necessary at this stage of the Circular dated 04.12.2020 of the CBDT on Frequent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of just, proper and efficient management of the work of assessment and in public interest. It is a beneficial power given to the Board for proper administration of fiscal law so that undue hardship may not be caused to the assessee and the fiscal laws may be correctly applied. Such instructions may be by way of relaxation of any of the provisions of the sections specified there or otherwise. The Board thus has power, inter alia, to tone down the rigour of the law and ensure a fair enforcement of its provisions, by issuing circulars in exercise of its statutory powers under Section 119 of the Income0tax Act which are binding on the authorities in the administration of the act. Under Section 119(2)9a), however, the circulars as contemplated therein cannot be adverse to the assesses. 35 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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