2021 (3) TMI 1073 - HC - Income Tax

Vivad Se Vishwas Scheme - petitioner s application under the aforesaid scheme has been rejected noting non-compliance with the deposit of tax in terms of Section 249(4)(a) - HELD THAT - Division Bench of this Court while noticing the conditions precedent under Section 249(a) of the Act has exercised its discretion while permitting assessee to pay the admitted amounts before the authority while directing the Commissioner appeals to consider the appeals on its merits. Noting that the application of the petitioner under the direct tax Vivad Se Vishwas Scheme has been rejected solely on the ground of non-compliance for not having made deposit under Section 249(4)(a) of the Act it would be a fit case while taking note of the observations of the Division Bench referred to above to permit the petitioner to pay the remaining dues in terms of Section 249(4)(a) of the Act within a period of four weeks from the date of release of this order. While so permitting the order at Annexure-A is set aside and the appeal stands restored. Consequential order of setting aside endorsement at Annexure-L is also set aside and the application of the petitioner in Form-1 to be re-considered by the respondent No.1. The respondent no.1 to consider processing of the petitioner s application afresh in light of the restoration of the appeal as per the order passed herein. It is made clear if the petitioner commits default in making payment within the time stipulated, the benefit of restoration of appeal and so also reconsideration by the respondent No.1 would stand revoked. Accordingly, the petition is disposed off.

Summary

Issues:
1. Quashing of the order passed by the Commissioner of Income Tax (Appeals)
2. Rejection of the application under the Direct Tax Vivad Se Vishwas Act, 2020
3. Non-compliance with Section 249(4)(a) of the Income Tax Act, 1961
4. Interpretation of conditions precedent under Section 249(a) of the Act
5. Restoration of appeal and re-consideration of the application

Analysis:

1. The petitioner sought the issuance of a Writ of Certiorari to quash the order dated 29.01.2021 passed by the Commissioner of Income Tax (Appeals). The petitioner's appeal was dismissed due to non-compliance with the requirement under Section 249(4)(a) of the Income Tax Act, 1961, as he failed to pay the tax due on the income returned.

2. Additionally, the petitioner requested the quashing of an endorsement rejecting his application under the Direct Tax Vivad Se Vishwas Act, 2020. Despite asserting that he had paid the tax due, his application was rejected for non-compliance with the deposit of tax as required by Section 249(4)(a) of the Act.

3. The petitioner argued that he was willing to pay the tax due under Section 249(4)(a) within a reasonable time, citing a precedent where the Division Bench allowed an assessee to pay the admitted amounts before the authority, directing the Commissioner of Appeals to consider the appeals on their merits.

4. The Court considered the petitioner's contentions and the conditions precedent under Section 249(a) of the Act. Noting the rejection of the petitioner's application under the Vivad Se Vishwas Scheme due to non-compliance with the deposit of tax, the Court decided to permit the petitioner to pay the remaining dues within four weeks. Consequently, the order quashing the appeal and the rejection of the application were set aside for re-consideration.

5. The Court emphasized that if the petitioner failed to make the payment within the stipulated time, the benefits of the restoration of the appeal and re-consideration by the authority would be revoked. The respondent was instructed to process the petitioner's application afresh in light of the restored appeal, and any technical difficulties in reconsideration were to be addressed by following the necessary procedures.

This judgment highlights the importance of compliance with statutory requirements, the discretion of the Court in allowing payments under specific schemes, and the consequences of non-compliance with payment deadlines in tax matters.