TMI Blog2023 (8) TMI 684X X X X Extracts X X X X X X X X Extracts X X X X ..... ter 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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed up to 31.3.2021. Subsequently, the aforesaid notification dated 27.10.2020 was amended by the Central Government by issuing another notification extending the last date of payment of balance tax and lastly, by notification dated 25.6.2021, the last date for payment of balance tax was extended till 31.10.2021. On 31.10.2021, it was Sunday. Therefore, to deposit the balance tax as mentioned in the certificate issued by the designated authority u/s 5 of the Act, 2020, the petitioner dropped a cheque for the amount of Rs. 8,67,137/- (after adjusting Rs. 10 Lakh which was already deposited by him prior to issuance of Form - III) in the drop box of the bank on Sunday itself, but the receipt for the payment (Challan) was issued by the bank on 3.11.2021, on encashment of the above cheque. 4. It was further submitted by the counsel for the petitioner that petitioner also met with an unfortunate accident on 1.11.2021 in which serious injuries were caused in his right knee and he was advised complete bed rest for a period of three days i.e. from 1.11.2021 to 3.11.2021 and in support of his claim, the petitioner has also annexed the medical certificate issued by the doctor as Annexure-8 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mitted his declaration but he could not make the payment due to legal impediment, therefore, condoning the said delay in depositing the balance amount is not the extension of the scheme, but it is taking a remedial measure. 7. Per contra, learned counsel for the Income Tax Department had submitted that after getting the declaration of the petitioner, certificate u/s 5 of the Act 2020 in Form-III was issued to the petitioner on 9.11.2020, but the petitioner by skipping the dates for depositing balance outstanding, kept on waiting for the extension of date and even could not deposit the balance outstanding of tax till last extended date. In support of his contention, learned counsel heavily relied upon the judgement of Apex Court in SLP (C) No. 2116 of 2023 (M/s Ken Computek Pvt. Ltd. vs. Designated Committee (SVLDRS) and others) decided on 6.2.2023 in which the Apex Court observed that the last date to deposit the balance of tax, prescribed under the scheme under the Act, 2020, cannot be extended and confirmed the impugned judgement of the High Court and dismissed the writ petition of the petitioner on the ground that last date prescribed under SVLDR Scheme cannot be extended. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sl. No. Nature of tax arrear. Amount payable under this Act on or before the 31st day of December, 2020 or such later date as may be notified Amount payable under this Act on or after the 1st day of January, 2021 or such later date as may be notified but on or before the last date (a) where the tax arrear is the aggregate amount of disputed tax, interest chargeable or charged on such disputed tax and penalty leviable or levied on such disputed tax. amount of the disputed tax. the aggregate of the amount of disputed tax and ten per cent. of disputed tax: provided that where the ten per cent. of disputed tax exceeds the aggregate amount of interest chargeable or charged on such disputed tax and penalty leviable or levied on such disputed tax, the excess shall be ignored for the purpose of computation of amount payable under this Act. (b) where the tax arrear includes the tax, interest or penalty determined in any assessment on the basis of search under section 132 or section 132A of the Income-tax Act. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5. (1) The designated authority shall, within a period of fifteen days from the date of receipt of the declaration, by order, determine the amount payable by the declarant in accordance with the provisions of this Act and grant a certificate to the declarant containing particulars of the tax arrear and the amount payable after such determination, in such form as may be prescribed. (2) The declarant shall pay the amount determined under sub-section (1) within fifteen days of the date of receipt of the certificate and intimate the details of such payment to the designated authority in the prescribed form and thereupon the designated authority shall pass an order stating that the declarant has paid the amount. (3) Every order passed under sub-section (1), determining the amount payable under this Act, shall be conclusive as to the matters stated therein and no matter covered by such order shall be reopened in any other proceeding under the Income-tax Act or under any other law for the time being in force or under any agreement, whether for protection of investment or otherwise, entered into by India with any other country or territory outside India. Explanation. F ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... circumstances which were beyond the control of the petitioner. 11. In the judgement of the Delhi High Court passed in Writ Petition (C) No. 3560 of 2022, a similar issue was under consideration. Delhi High Court, after considering the aforesaid issue, decided the same by judgement dated 2.11.2022 and observed that the delay in payment of arrears of tax is attributable to unforeseen and extraneous circumstances that were beyond the control of the petitioner; therefore, same is deserved to be condoned and directed the Income Tax Department to accept the declaration of the petitioner. Paragraphs No. 12 and 22 of the aforesaid judgement are being quoted as below:- 12. This Court is further of the opinion that the delay in payments of the amounts, in the present cases are attributable to unforeseen and extraneous circumstances that were beyond control of the Petitioners. In fact, the country was intermittently in lockdown on account of the COVID-19 pandemic from 25th March, 2020. In recognition of these difficulties as pointed out hereinabove, the scheme was amended several times to extend the deadline for payment. Moreover, death of the Managing Director of the companies was an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eme. However, in the present case it is not a case of extension of the scheme by the High Court; It is a case of taking remedial measures. It is not a case where the appellant did not make any application within the stipulated time under the scheme. This is not a case where the Form No.3 determining the settlement amount was not issued during the validity of the scheme. It is not a case where the appellant deliberately did not deposit the settlement amount and/or there was any negligence on the part of the appellant in not depositing the settlement amount within the stipulated time. As observed hereinabove it is a case where the appellant was unable to make the payment due to the legal impediment and the bar to make the payment during the period of moratorium in view of the provisions of the IBC. 25. In a given case it may happen that a person who has applied under the Scheme and who was supposed to make payment on or before 30.06.2020, became seriously ill on 29.06.2020 and there was nobody to look after his affairs and therefore he could not deposit the amount; such inability was beyond his control and thereafter, immediately on getting out of sickness he tried to deposit th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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