2022 (6) TMI 270 - HC - Income Tax

Vivad se Vishwas Scheme - Extension of the last date for payment of tax sought to be applied for filing new application - extension of limitation period - HELD THAT - Supreme Court, in exercise of its powers under Article 142 read with Article 141 of the Constitution of India, had extended the period of limitation so as to minimise the difficulties faced by the litigants and lawyers. The aforesaid orders, in our view, are applicable to regular proceedings; proceedings which are judicial or quasi-judicial, such as, income tax proceedings including filing of income tax return or filing of refund application, filing of appeal etc., It cannot be stretched and made applicable to a one time amnesty scheme like the one introduced vide the Vivad se Vishwas Act, which incidentally was introduced when the pandemic had broken out. Initially, the last date for filing declaration under the Vivad se Vishwas Act was 31.01.2020 which was finally extended to 31.03.2021. Considering the nature and objective of the one time amnesty scheme introduced vide the Vivad se Vishwas Act, in our considered view, extension of limitation granted by the Supreme Court cannot be applied to belated filing of declaration. As a matter of fact, filing of declaration in terms of the Vivad se Vishwas Act, is neither a judicial act nor a quasi-judicial act. It was intended as a one time measure for an eligible declarant to file the declaration within the prescribed period and avail the benefits thereunder. Petitioners having filed the declarations in the third week of June, 2021 much after the last date of filing i.e. 31.03.2021 were not eligible to claim any benefit under the Vivad se Vishwas Act. Therefore, their declarations were rightly not accepted. Extension of the last date for payment of dues as determined by the designated authority in terms of the Vivad se Vishwas Act till 31.08.2021 or till 31.10.2021 by the CBDT cannot be pressed into service by the petitioners to seek extension of the last date for filing declaration. Firstly, in the case of the former, CBDT issued press release on 25.06.2021. No such press release or notification was issued by the CBDT in the case of the latter. Secondly and fundamentally, the two are different. In the case of the former, the declarations were filed within time i.e., before the last date of 31.03.2021. Thereafter the amount to be paid by the declarants were adjudicated by the designated authority whereafter the payments were to be made; it is for the payment of the determined amount that the time line was extended as above. It cannot be equated with filing of declaration beyond the last date. Thus, in the facts and circumstances of the case, the two writ petitions are wholly misconceived. There is no merit in the writ petitions and those are accordingly dismissed.

Summary

Issues Involved:
1. Non-acceptance of declarations under the Direct Tax Vivad se Vishwas Scheme due to late filing.
2. Applicability of Supreme Court's extension of limitation period to the Vivad se Vishwas Act.
3. Distinction between the extension of the last date for filing declarations and the last date for payment of dues under the Vivad se Vishwas Act.

Issue-wise Detailed Analysis:

1. Non-acceptance of declarations under the Direct Tax Vivad se Vishwas Scheme due to late filing:

The petitioners filed declarations under the Direct Tax Vivad se Vishwas Act, 2020, in the third week of June 2021. However, these declarations were not accepted as they were filed after the prescribed deadline of 31.03.2021. The petitioners contended that the deadline should have been extended due to the COVID-19 pandemic and the Supreme Court's suo motu orders extending the limitation period for judicial and quasi-judicial proceedings. The respondents argued that the Vivad se Vishwas Act is a special enactment with a specific deadline for filing declarations, and no extension was provided for filing declarations beyond 31.03.2021. The court observed that the petitioners waited until their appeals were dismissed by the Tribunal on 22.04.2021 before filing their declarations, indicating a lack of bona fide intention to settle the disputes under the scheme. The court concluded that the declarations were rightly not accepted as they were filed beyond the prescribed deadline.

2. Applicability of Supreme Court's extension of limitation period to the Vivad se Vishwas Act:

The petitioners argued that the Supreme Court's orders extending the limitation period due to the COVID-19 pandemic should apply to the filing of declarations under the Vivad se Vishwas Act. The court examined the Supreme Court's orders dated 23.03.2020, 08.03.2021, 27.04.2021, and 10.01.2022, which extended the limitation period for judicial and quasi-judicial proceedings. The court noted that these orders were intended to minimize the difficulties faced by litigants and lawyers in regular judicial or quasi-judicial proceedings, such as filing of income tax returns, appeals, etc. However, the court held that the extension of limitation granted by the Supreme Court could not be applied to a one-time amnesty scheme like the Vivad se Vishwas Act, which was introduced as a special measure to settle direct tax disputes within a specific timeframe. The court emphasized that filing a declaration under the Vivad se Vishwas Act is neither a judicial nor a quasi-judicial act and is not covered by the Supreme Court's extension of limitation.

3. Distinction between the extension of the last date for filing declarations and the last date for payment of dues under the Vivad se Vishwas Act:

The petitioners argued that the Central Board of Direct Taxes (CBDT) had extended the last date for payment of dues under the Vivad se Vishwas Act till 31.08.2021 (without additional amount) and till 31.10.2021 (with additional amount) and that this extension should also apply to the filing of declarations. The court clarified that the extension of the last date for payment of dues was different from the extension of the last date for filing declarations. The court noted that the declarations had to be filed within the prescribed deadline of 31.03.2021, and the extension granted by the CBDT was only for the payment of the determined amount by declarants who had filed their declarations within the deadline. The court concluded that the petitioners could not seek an extension of the last date for filing declarations based on the extension of the last date for payment of dues.

Conclusion:

The court dismissed the writ petitions, holding that the petitioners' declarations under the Vivad se Vishwas Act were rightly not accepted as they were filed beyond the prescribed deadline. The court emphasized that the Supreme Court's extension of limitation for judicial and quasi-judicial proceedings did not apply to the filing of declarations under the Vivad se Vishwas Act, which was a one-time amnesty scheme with a specific deadline. The court also clarified the distinction between the extension of the last date for filing declarations and the extension of the last date for payment of dues under the scheme.