2024 (12) TMI 202 - HC - Income Tax

Entitlement to Direct Tax Vivad se Vishwas Act, 2020 (DTVSV Act) - Entitlement to the issuance of Form 5 under the DTVSV Act - respondent refused to issue Form No. 5 on the ground that the amount paid by the petitioner was beyond the last day of the Scheme i.e. 30th September, 2021 HELD THAT - As in the facts of the case, the petitioner has paid the almost entire amount except Rs. 1,533/- within the specified time period on or before 30th September, 2021 and therefore, it cannot be said that permitting the petitioner to the benefit of the Scheme would amount to extending the Scheme or modifying the Scheme which is the prerogative of the Government. In the facts of the case, the petitioner is not permitted to pay the entire amount as per Form 3 beyond the specified date but only amount of Rs. 1,533/- which the petitioner paid late by twelve days is considered, is unintentional and the same was supported by the justifiable reason and therefore, in order to do the substantial justice to the petitioner, the delay of twelve days in payment of Rs. 1,533/- ought to have been condoned by the respondent No. 5 by issuing the Form 5. In the facts of the case, the petitioner has also paid Rs. 2,00,634/- being the difference of the amount payable after 30th September, 2021. The impugned order rejecting the issuance of Form 5 passed by the respondent on 16.03.2023 is hereby quashed and set aside. The respondent is further directed to issue the Form 5 to the petitioner as per the provisions of the DTVSV Act within twelve weeks from the date of receipt of the copy of this order. It is needless to say that the effect of issuance of such Form 5 shall be given by the respondent-Income Tax Department as per the provisions of the DTVSV Act.

Issues Involved:

1. Compliance with the Direct Tax Vivad se Vishwas Act, 2020 (DTVSV Act) and the implications of late payment.
2. Entitlement to the issuance of Form 5 under the DTVSV Act.
3. Interpretation of statutory schemes and the scope of judicial discretion in condoning delays.

Detailed Analysis:

1. Compliance with the Direct Tax Vivad se Vishwas Act, 2020 (DTVSV Act) and the implications of late payment:

The central issue in this case revolved around the petitioner's compliance with the payment requirements under the DTVSV Act. The petitioner, a Private Limited Company, initially paid Rs. 12,27,183/- on 27th August 2021, which was slightly short of the Rs. 12,28,500/- due by 30th September 2021. The shortfall of Rs. 1,533/- was paid on 12th October 2021, a delay of twelve days. The respondent contended that this delay disqualified the petitioner from the benefits of the DTVSV Scheme, which aims to resolve disputed taxes and reduce litigation. The court noted that the DTVSV Act is a beneficial legislation intended to expedite tax dispute resolutions and reduce administrative burdens. The court emphasized that the petitioner's delay in paying the Rs. 1,533/- was not substantial enough to justify denying the benefits of the Scheme, especially given the petitioner's subsequent payment of Rs. 2,00,634/- on 09.12.2022 to demonstrate compliance.

2. Entitlement to the issuance of Form 5 under the DTVSV Act:

The petitioner sought the issuance of Form 5, which signifies the completion of payment obligations under the DTVSV Act. Despite the late payment, the petitioner argued that they had complied substantially with the Scheme's requirements and that the delay was neither deliberate nor significant. The court agreed, citing the objective of the DTVSV Act to resolve tax disputes efficiently and effectively. It was observed that the petitioner had paid more than 90% of the required amount on time and had shown bona fide intent by making the additional payment. The court quashed the respondent's order denying Form 5 and directed its issuance, recognizing the petitioner's substantial compliance with the Scheme.

3. Interpretation of statutory schemes and the scope of judicial discretion in condoning delays:

The court considered various precedents where minor delays or shortfalls in payment under similar statutory schemes were condoned. It referenced decisions from the Bombay, Delhi, and Telangana High Courts, which emphasized that minor, unintentional lapses should not obstruct the benefits intended by such schemes. The court highlighted that the DTVSV Act, being a remedial statute, should be interpreted liberally to fulfill its purpose. The court also acknowledged its power under Article 226 of the Constitution to remedy injustices in extraordinary circumstances. It concluded that the petitioner's delay was unintentional and supported by justifiable reasons, warranting the condonation of the delay and the issuance of Form 5.

Conclusion:

The court ruled in favor of the petitioner, emphasizing the need for a liberal interpretation of the DTVSV Act to achieve its objectives. It directed the issuance of Form 5, allowing the petitioner to benefit from the Scheme despite the minor delay in payment. The decision underscores the judiciary's role in ensuring that beneficial legislative schemes are not thwarted by rigid procedural adherence, especially when the delay is minimal and unintentional.

← Previous Next →