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2020 (11) TMI 485 - HC - Income TaxBenefit of Vivad Se Vishwas Scheme ('VVS Scheme') - Substantial Questions of Law framed for consideration on account of certain subsequent developments - Option to appeal in case application for settlement is rejected - HELD THAT - It may not be necessary for this Court to decide the Substantial Questions of Law framed for consideration on account of certain subsequent developments. The Government of India enacted the Direct Tax Vivad Se Vishwas Act, 2020 (Act 3 of 2020) to provide for resolution of disputed tax and for matters connected therewith or incidental thereto. The Act of the Parliament received the assent of the President on 17th March 2020 and published in the Gazette of India on 17th March 2020. In terms of the said Act, the assessee has been given an option to put an end to the tax disputes, which may be pending at different levels either before the First Appellate Authority or before the Tribunal or before the High Court or before the Hon'ble Supreme Court of India. The assessee is given liberty to restore this appeal in the event the ultimate decision to be taken on the declaration to be filed by the assessee under Section 4 of the said Act is not in favour of the assessee. 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 appeal and on such request made by the assessee by filing a Miscellaneous Petition for Restoration, the Registry shall place such petition before the Division Bench for orders.
Issues:
1. Application of Hon'ble Apex Court decision on depreciation loss of Section 10A/10B unit. 2. Consideration of deduction u/s.10A and 10B without carry forward loss. 3. Interpretation and application of the Direct Tax Vivad Se Vishwas Act, 2020. Analysis: Issue 1 - Application of Hon'ble Apex Court decision: The appellant/Revenue filed appeals under Section 260 A of the Income Tax Act against the Tribunal's order for the Assessment Years 2004-05 and 2005-06. The Substantial Questions of Law raised included whether the Tribunal should have applied the ratio of the Hon'ble Apex Court decision in the case of Himatasingike Seide regarding the set off of depreciation loss of Section 10A/10B unit against other income. However, due to subsequent developments with the enactment of the Direct Tax Vivad Se Vishwas Act, 2020, the Court found it unnecessary to decide these questions. Issue 2 - Consideration of deduction u/s.10A and 10B without carry forward loss: The Tribunal's decision on allowing deductions u/s.10A and 10B without considering carry forward loss was also questioned. The appellant's counsel and the respondent's counsel were heard on this matter. The Court noted that the Direct Tax Vivad Se Vishwas Act, 2020 provided an option for taxpayers to resolve tax disputes pending at various levels. The respondent/assessee had already filed declarations under Section 4 of the Act, indicating an intention to settle the tax disputes. Issue 3 - Interpretation and application of the Direct Tax Vivad Se Vishwas Act, 2020: The Court elaborated on the provisions of the Direct Tax Vivad Se Vishwas Act, 2020, which allowed taxpayers to end tax disputes by filing declarations and resolving tax arrears. The Act specified the determination of the amount payable by declarants and provided immunity from certain proceedings. The respondent had already availed the benefits under this Act by filing declarations, leading the Court to dispose of the Tax Case Appeals. The Court ensured that the Department would process the application promptly and communicate the decision to the assessee. In conclusion, the Court disposed of the appeals with the liberty for the assessee to restore them if the Department's decision under the Act was unfavorable. The Substantial Questions of Law were left open, and no costs were awarded in this judgment.
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