TMI Blog2023 (12) TMI 653X X X X Extracts X X X X X X X X Extracts X X X X ..... URT] the Supreme Court has held that whether an appeal is valid, competent or admitted is a question entirely for the appellate court before whom the appeal is filed to decide and this determination is possible only after the appeal is heard but there is nothing to prevent a party from filing an appeal which may ultimately be found to be incompetent, e.g. when it is held to be barred by limitation. From the mere fact that such an appeal is held to be unmaintainable on any ground whatsoever, it does not follow that there was no appeal pending before the Court . To the same effect is the law laid down by the judgments of the Supreme Court in the cases of Tirupati Balaji Developers (P) Ltd. v. State of Bihar Ors [ 2004 (4) TMI 575 - SUPREME COURT] and Commr. of Income Tax, Rajkot Versus Shatrusailya Digvijaysingh Jadeja [ 2005 (9) TMI 362 - SUPREME COURT] In the said cases, it has been held that an appeal does not cease to be an appeal though irregular and incompetent. Though Section 10 of the VSV Act gives power to the CBDT to issue directions, yet this Court is of the view that the said Section is similar to Section 119 of the Act, 1961. Consequently, the CBDT under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3) r/w Section 147 of the Income Tax Act, 1961 (hereinafter referred to as the Income Tax Act ) was passed by the Income Tax Officer 2(3), Indore vide her order dated 25.12.2019. The said order was passed during the lifetime of the original assessee. 3. Meanwhile and prior to filing of the appeal against the order dated 25.12.2019, the Finance Act 2020 introduced a scheme known as The Direct Tax Vivad Se Vishwas Act, 2020 mainly for settlement of the disputed arrears of taxes and matters connected therewith or incidental thereto. According to the said scheme, an assessee whose appeal, writ petition or special leave petition is pending as on 31.01.2020 before any appellate forum or in whose case, the period of limitation for filing appeal has not expired on 31.01.2020 was eligible to file a declaration under the scheme and was entitled to settle the disputed amount of arrears of taxes in accordance with the scheme. The original time for filing the declaration under the scheme was upto 31.03.2020. However, the period was extended from time to time and ultimately the last date was 31.03.2021. As per the scheme, to take the benefit of the same, could be availed subject to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rum should have been pending; (ii) That the factum of the pendency of the appeal should have obtained on specified date i.e. 31.01.2020. 8 . Learned counsel further submitted that the appeal was filed by the petitioner on 23.11.2020 ( Annexure P/5 ) including an application for condonation of delay in preferring the appeal shows that the petitioner fulfilled the necessary prerequisites required for processing the claim under the provisions of 2020 Act. He further stated that as per FAQ No.59 which is the part of clarificatory circular dated 04.12.2020 is erroneous as it takes into account aspects which are beyond the scope of provisions of 2020 Act. In as much as the condition that the appeal must be admitted, amounts to creation of class within a class without any intelligible differentia which violates Article 14 of the Constitution of India. 9 . On the other hand, learned counsel for the revenue contended that the authorities are bound to reject the declaration in view of the conditions mentioned in the FAQ-59. The word admitted is a precondition, therefore, the respondents have rightly rejected the claim of the petitioner. 10. We have heard learn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en if it was allegedly irregular or incompetent. In the instant case therefore also, the Respondent could not have rejected the Declaration Form of the Petitioner filed under the said Act merely on the ground that the appeal was not valid or competent, as the delay occurred in filing the Appeal was not condoned by the Appellate Authority .. CBDT CANNOT ISSUE CIRCULARS ADVERSE TO THE ASSESSEE. THE FAQ NO.59 TO THE EXTENT IT CONTEMPLATES ADMISSION OF APPEAL AS A CONDITION PRECEDENT IN ORDER TO BE ELIGIBLE FOR SETTLEMENT UNDER THE VSV ACT IS CONTRARY TO LAW. 15. Though Section 10 of the VSV Act gives power to the CBDT to issue directions, yet this Court is of the view that the said Section is similar to Section 119 of the Act, 1961. Consequently, the CBDT under Section 10 of VSV Act cannot issue circulars adverse to the assessee. 16. In fact, the Supreme Court in UCO Bank, Calcutta vs. Commissioner of Income Tax, W.B., (1999) 4 SCC 599 while interpreting Section 119 of the Act, 1961 has held as under:- 9. xxx xxx xxx Under sub-section (2) of Section 119, without prejudice to the generality of the Board's power set out in sub-section (1), a specific p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the circular should be given effect to and not the view expressed in a decision of this Court or the High Court. So far as the clarifications/circulars issued by the Central Government and of the State Government are concerned they represent merely their understanding of the statutory provisions. They are not binding upon the court. I t is for the court to declare what the particular provision of statute says and it is not for the executive. Looked at from another angle, a circular which is contrary to the statutory provisions has really no existence in law . 18. Consequently, the FAQ No.59 of Circular No.21/2020 dated 4th December, 2020 issued by CBDT to the extent it contemplates a condition of admission of appeal before filing of declaration as a condition precedent in order for the appeal to be treated as pending and to be eligible for settlement under the VSV Act is contrary to law, and accordingly the word admission needs to be ignored. 19. In our view, as noted above, the appeal would be pending as soon as it is filed and up untill such time it is adjudicated upon and a decision is taken qua the same. The orders of rejection dated 31.03.2021 and 15.0 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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