2021 (1) TMI 1251 - HC - Income Tax

Benefit of Vivad Se Vishwas Scheme - assessee submit that the assessees have already filed the declaration/undertaking under the Vivad Se Vishwas Scheme on 01.12.2020 and is awaiting orders to be passed in Form No.3. - HELD THAT - In the light of the subsequent event, the Competent Authority shall process the applications/declaration in accordance with the Direct Tax Vivad Se Vishwas Act, 2020 (Act 3 of 2020) and pass appropriate orders as expeditiously as possible. The assessees are given liberty to restore these appeals in the event the ultimate decision to be taken on the declaration filed by the assessee under Section 4 of the said Act is not in favour of the assessees. If such a prayer is made, the Registry shall entertain the prayer without insisting upon any application to be filed for condonation of delay in restoration of the appeals and on such request made by the assessees by filing a miscellaneous petition for restoration, the Registry shall place such petition before the appropriate Division Bench for orders.

Summary

Issues:
1. Challenge to orders under Section 260A of the Income Tax Act, 1961 for the assessment year 2011-12.
2. Interpretation of substantial questions of law related to the initiation of proceedings under Section 153A, acceptance of audited tally statement, reliance on SLP dismissal, and binding effect of SLP dismissal simplicitor.
3. Declaration/undertaking filed under the Vivad Se Vishwas Scheme awaiting orders.
4. Disposal of tax case appeals with liberty for restoration based on the outcome of the declaration filed under the Direct Tax Vivad Se Vishwas Act, 2020.

Analysis:
1. The Revenue filed appeals challenging orders made by the Income Tax Appellate Tribunal for the assessment year 2011-12 under Section 260A of the Income Tax Act, 1961. The substantial questions of law raised included the jurisdiction of the Assessing Officer to initiate proceedings under Section 153A in the absence of incriminating material, the acceptance of audited tally statement as the basis for search assessment, reliance on SLP dismissal, and the binding effect of such dismissal. The High Court heard arguments from both parties represented by Senior Standing Counsel and learned counsel, respectively.

2. The respondents informed the court that they had filed a declaration/undertaking under the Vivad Se Vishwas Scheme and were awaiting orders. In light of this, the Competent Authority was directed to process the applications in accordance with the Direct Tax Vivad Se Vishwas Act, 2020, and pass orders promptly. The assessees were granted liberty to restore the appeals if the decision on the declaration was unfavorable. The Registry was instructed to entertain restoration requests without the need for a formal application for condonation of delay. The tax case appeals were disposed of with liberty for restoration, leaving the substantial questions of law open and no costs were awarded.