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2024 (5) TMI 836 - HC - Income TaxBenefit of DTVSV Act - CIT(A) has rejected the appeal of the assessee on the ground of being barred by limitation - disputed tax demand after giving effect to the CIT(A) order - Whether appeal should be pending or the time limit for filing an appeal should not have expired as on the specified date? - HELD THAT - As it is evident from the legislative intent as well as the Statement of Objects and Reasons the aim of the DTVSV Act is to finally put an end to the litigation and set free the tax arrears entangled in the litigation battle. Considering the nature of the legislation to be beneficial and remedial in its form it should be interpreted in a liberal and purposive manner. It is crystal clear that in all the aforementioned exigencies as enshrined in Section 2 (1) (a) of the DTVSV Act the assessee would be eligible to apply under the provisions of the DTVSV Act. It is noteworthy that as per the provisions of the DTVSV Act inter alia what is required is that either an appeal should be pending or the time limit for filing an appeal should not have expired as on the specified date and the disputed tax arrears should exist. The fact remains that the limitation to avail the remedy to appeal against the CIT(A) order was not exhausted as on the specified date and thus the Revenue cannot pre-suppose that the assessee would not succeed in the appeal before ITAT under any circumstances. It is of no significance whether the pending appeal merits consideration or is filed against an order whereby the dismissal was on the ground of being barred by limitation. These qualifications attached to a pending litigation have no bearing over the assessee for availing the benefits of the DTVSV Act. In the case of Medeor Hospital 2022 (11) TMI 26 - DELHI HIGH COURT this Court also held that once the provisions of the DTVSV Act contemplate the condition of appeal being pending in order to avail the settlement benefits then there is no requirement to add the qualifications to the pending appeal. Designated authority cannot go beyond the purview of the DTVSV Act and attach qualifications to conditions which are already meticulously provided in the provisions of the DTVSV Act. It cannot be gainsaid that once the CIT(A) has rejected the appeal of the assessee on the ground of being barred by limitation the resultant effect of such an order would be confirmation of the assessment order so passed unless and until such position is changed by the appellate forum. Therefore upon a conjoint reading of Section 2 (1) (a) (ii) and Section 2 (1) (j) (B) of the DTVSV Act and applying the provisions in facts of the present case particularly in light of the objectives of the DTVSV Act it is distinct to point out that the time limit for filing the appeal against the CIT(A) order dated 01.01.2020 was not expired as on specified date and the disputed tax arrears existed on the specified date as resultant effect of the CIT(A) order dated 01.01.2020 leads to confirmation of the assessment order thereby resulting in the disputed tax arrears. After all the DTVSV Act aspires to finally free the tax arrears locked in the litigation combat for ages and ultimately ensures timely collection of tax. In the present case the dispute pertains to AY 2010-11 much water has already flown through the gates and a lot of time resources and energy have already been consumed in the ongoing litigation combat. Moreover since the assessee aspires to avail the benefits of the settlement scheme and we have the beneficial legislation in place to finally effectuate such aspirations. Therefore under the facts of the present case we do not find any reason to obstruct the assessee from availing the benefits of the DTVSV Act. We confirm the liberty given to the assessee vide interim order dated 22.04.2021 and direct the Revenue to proceed with the application of the assessee in accordance with the provisions of the DTVSV Act and other applicable regulations.
Issues Involved:
1. Eligibility of the assessee to avail benefits under the Direct Tax Vivad se Vishwas Act, 2020 (DTVSV Act). Summary: Issue: Eligibility to Avail Benefits under DTVSV Act 1. Factual Matrix: - The assessee, an Indonesian entity, filed its Income Tax Return (ITR) for AY 2010-11 on 27.08.2011. - A draft assessment order was passed u/s 144C(1) of the Income Tax Act, 1961 on 28.03.2013, assessing the income at Rs. 1,69,68,213/-. - The final assessment order was passed on 24.05.2013. - The assessee's appeal before the Commissioner of Income Tax (Appeals) [CIT(A)] was dismissed on 01.01.2020 due to a four-year delay. - The DTVSV Act came into force on 17.03.2020, and the assessee filed Forms 1 and 2 on 23.12.2020, which were rejected by the Revenue on the grounds that no appeal was pending as of the specified date (31.01.2020). 2. Arguments by the Assessee: - The assessee contended that the rejection was arbitrary and against the objectives of the DTVSV Act. - Cited Section 2(1)(a)(ii) and Section 2(1)(n) of the DTVSV Act, arguing that the time limit for filing an appeal had not expired as of the specified date. - Referred to CBDT Circular No. 09/2020, which clarified that cases where the due date for filing an appeal falls after the specified date are still eligible. - Asserted that the dismissal of the appeal by CIT(A) on the ground of delay does not negate the existence of disputed tax arrears as of 31.01.2020. 3. Arguments by the Revenue: - The Revenue argued that the appeal had to be pending as of the specified date to avail the benefits of the DTVSV Act. - Stated that since the CIT(A) disposed of the condonation of delay application on 01.01.2020, no appeal was pending as of 31.01.2020. - Claimed that no disputed tax arrears existed as the CIT(A) decided only the question of delay, not tax arrears. 4. Court's Analysis: - The court examined the legislative intent and objectives of the DTVSV Act, emphasizing its remedial and beneficial nature aimed at reducing litigation and ensuring timely tax collection. - Noted that Section 2(1)(a)(ii) allows benefits even if the time limit for filing an appeal had not expired as of the specified date. - Highlighted that the Revenue did not dispute the fact that the time limit for filing an appeal before the ITAT had not expired as of 31.01.2020. - Referred to the Supreme Court's observations in similar cases, emphasizing that the dismissal of an appeal on the ground of limitation results in the confirmation of the assessment order, thereby maintaining the existence of disputed tax arrears. - Cited previous judgments affirming that the designated authority cannot add qualifications to the conditions already provided in the DTVSV Act. 5. Conclusion: - The court directed the Revenue to proceed with the assessee's application under the DTVSV Act in accordance with its provisions and other applicable regulations. - Confirmed the liberty given to the assessee to file Form-4 as per the interim order dated 22.04.2021. - Allowed and disposed of the writ petition along with any pending applications.
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