2020 (10) TMI 1117 - HC - Income Tax

Benefit of Vivad Se Vishwas Scheme ('VVS Scheme') - 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. We direct the appellant / assessee to file the Form No.I on or before 09.11.2020 and the competent authority shall process the application / declaration in accordance with the Act and pass appropriate orders as expeditiously as possible preferably within a period of six (6) weeks from the date on which the declaration is filed in the proper form.

Summary

Issues:
1. Perversity in the order of the Income Tax Appellate Tribunal
2. Jurisdiction for Re-assessment
3. Reopening beyond 4 Years
4. Change of Opinion
5. Interest u/s.234B

Perversity in the order of the Income Tax Appellate Tribunal:
The appellant challenged the order of the Income Tax Appellate Tribunal, alleging perversity in considering certain proceedings not included in the reasons for reopening the assessment. The Tribunal was accused of introducing new material in the second appeal stage without proper citation. The issue revolved around whether the Tribunal's decision was based on fresh evidence or a change of opinion, and if the reassessment was valid beyond the four-year limit without the assessee's failure to disclose material facts.

Jurisdiction for Re-assessment:
The Tribunal's right in upholding the jurisdiction of the Assessing Officer for reopening the assessment under Section 147 of the Income Tax Act 1961 was questioned. The validity of the reassessment beyond four years from the end of the Assessment Year without the assessee's failure to disclose all material facts was a key concern.

Reopening beyond 4 Years:
The Tribunal's decision not to cancel the reassessment after four years without the assessee's failure to disclose all necessary material facts was disputed. The issue centered on whether the reassessment was justified and if the assessee had indeed failed to disclose all relevant information.

Change of Opinion:
The Tribunal's ruling that there was no change of opinion despite the assessment being based on information available during the scrutiny assessment was contested. The question arose regarding the validity of the reassessment solely on the Partition Deed, which was already known during the initial assessment.

Interest u/s.234B:
The Tribunal's decision to levy interest u/s.234B in the reopened assessment was challenged. The issue focused on the treatment of advance tax and whether the provisions of Section 234B should apply in the reassessment. The validity of the reassessment without issuing notice u/s.143(2) was also questioned.

The judgment highlighted the introduction of the Vivad Se Vishwas Scheme, providing the assessee with an opportunity to resolve tax disputes. The Act allowed for the declaration of disputed tax and specified the procedures for resolving tax arrears. The judgment directed the appellant to file the necessary form under the Act by a specified date, with the assurance of timely processing and appropriate orders. The appeal was disposed of with the liberty for restoration based on the outcome of the declaration filed under the Act.