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2021 (10) TMI 72 - HC - Income TaxApplication under the DTVSV Act 2020 rejected - whether no appeal is pending as on the date specified date i.e. 31.01.2020, whereas the appeal was filed with an application for condonation of delay - HELD THAT - As the respondents did not oppose the condonation of delay and also the prayer of the petitioner to withdraw the appeal to avail the benefit of the DTVSV Act 2020, it is not open for the respondents now to turn around and reject the declaration filed in Forms 1 2 with the Remark as as no appeal is pending as on the date specified date i.e. 31.01.2020, as per Section 2 of the DTVSV Act 2020, and the assessee is not an eligible declarant. Also the condonation is not filed before the date of issue of Circular No.21 of 2020 dated 04.12.2020. So, the applicant is not an eligible declarant. Hence, the application filed by the appellant is hereby rejected. Since, this Court had already taken the view that no significance can be attached to the date of 04.12.2020 specified in Circular No.21 of 2020 while providing answer to Question No.59; that the same would have to be considered as applicable even in relation to further extension of time granted for filing declaration up to 31.03.2021 and cannot be restricted, the declaration filed by the petitioner under DTVSV Act, 2020 on 05.03.2021 would have to be considered as validly filed, and that the petitioner is eligible to avail the benefit under the DTVSV Act, 2020. This Court, in Boddu Ramesh's case ( 2021 (6) TMI 1054 - TELANGANA HIGH COURT ), taking note of the speech of the presenter of the Bill before the Parliament and the Statement of Objects and reasons appended to the DTVSV Act, 2020, held that the DTVSV Act, 2020, is a beneficial piece of legislation, and interpretation of the same should be in such a manner which would go to achieve the object for which the same was enacted. This Court, in M/s. Dongfang Electric Corporation Ltd. v. Designated Authority2, 2021 (9) TMI 92 - TELANGANA HIGH COURT held that the DTVSV Act, 2020 being a beneficial piece of legislation, resort should be made to liberal interpretation rather than literal interpretation, which would render the entire scheme inoperable . It is to be held that the rejection of the declaration filed by the petitioner under DTVSV Act, 2020 in Forms 1 and 2 on 05.03.2021. with the Remark noted on 20.04.2021, by the 3rd respondent, on the basis of answer to Q.No.59, vide Circular No.21 dated 04.12.2020, cannot be sustained. Writ Petition is allowed and the impugned order of the 3rd respondent,with the Remark as noted therein, is hereby set aside; the 3rd respondent is hereby directed to accept the declaration Forms 1 and 2 filed by the petitioner on 05.03.2021; process the same in accordance with the DTVSV Act, 2020; issue Form 3; and accept the payment from the petitioner as declared in Form 1 filed, before the due date as notified.
Issues Involved:
1. Validity of Circular No. 21 of 2020. 2. Rejection of petitioner’s declaration/application under the Direct Tax Vivad Se Vishwas Act, 2020 (DTVSV Act 2020). 3. Interpretation and application of the DTVSV Act 2020 and related circulars. Issue-wise Detailed Analysis: 1. Validity of Circular No. 21 of 2020: The petitioner challenged Circular No. 21 of 2020, dated 04.12.2020, issued by the 2nd respondent, arguing that it was null, void, and unconstitutional concerning the clarification issued regarding Question No. 59. The petitioner contended that the circular’s restriction, which limited the benefit to appeals filed on or before 04.12.2020, was contrary to the DTVSV Act 2020. The Court referred to a previous decision in Boddu Ramesh v/s. Designated Authority, where it was held that the restriction imposed by the circular had no significance and what mattered was the "pendency of the appeal" with an application for condonation of delay and the appeal being admitted by the appellate authority before the date of filing of the declaration. 2. Rejection of Petitioner’s Declaration/Application: The petitioner’s declaration/application in Forms 1 and 2 filed on 05.03.2021 under the DTVSV Act 2020 was rejected by the 3rd respondent on 20.04.2021. The rejection was based on the remark that no appeal was pending as of the specified date (31.01.2020) and that the condonation application was not filed before the issuance of Circular No. 21 of 2020. The Court noted that the petitioner had filed an appeal before the Tribunal on 23.02.2021, which was admitted, and the delay was condoned on 22.03.2021. The Court concluded that the declaration filed by the petitioner on 05.03.2021 should be considered valid as it was filed before the extended last date of 31.03.2021. 3. Interpretation and Application of the DTVSV Act 2020 and Related Circulars: The Court emphasized the beneficial nature of the DTVSV Act 2020 and stated that its interpretation should be liberal to achieve the intended objective. It cited the Economic Survey 2017-18, highlighting the extensive pendency and low success rate of tax department appeals, underscoring the need for schemes like DTVSV to unlock revenues. The Court held that the rejection of the petitioner’s declaration based on Circular No. 21 of 2020 was unsustainable. The Court directed the 3rd respondent to accept the petitioner’s declaration in Forms 1 and 2, process it according to the DTVSV Act 2020, issue Form 3, and accept the payment declared in Form 1. Conclusion: The Writ Petition was allowed, and the impugned order of the 3rd respondent was set aside. The 3rd respondent was directed to process the petitioner’s declaration in accordance with the DTVSV Act 2020. The Court reiterated that the DTVSV Act 2020 should be interpreted liberally to fulfill its purpose of resolving tax disputes and unlocking revenues. Pending miscellaneous petitions were closed, and no order as to costs was issued.
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