2021 (12) TMI 1138 - HC - Income Tax

Specified date under the Direct Tax Vivad Se Vishwas Act, 2020 - procedure for the purpose of determination of the tax liability or a declaration which has been made - AA had declined to accept and extent the said benefit vide communication dated 25th January, 2021, on the ground, that as on the specified date , i.e. on 31.01.2020, the Appeal itself was not pending, as it was contemplated under the Act of 2020 - Contention of petitioners was that, since the Appeal was itself pending consideration as per the Act, their claim for determination of the tax liability will fall to be under Sections 3 and 4 of the Act - HELD THAT - As pendency of a case or an appeal or a petition, as provided under Section 2 of the Act of 2020, has to be rationally considered to be pending, irrespective even if the appeal is pending along with the delay condonation application, and also in league and in agreement with the opinion expressed by the Division Bench that the Gujarat High Court, while dealing with such type of contingency or a situation as it cannot enlarge, the scope by widening its determination of consideration of an appellate jurisdiction by barging into its jurisdiction, to determine the question; as to whether at all the appeal itself was pending consideration at the time when, it was instituted when the Act was enforced w.e.f. 17th March, 2020. So far the argument of the learned counsel for the respondents in the light of the provisions contained under Section 2 (1) (a) (i) is concerned, the said provision would not be attracted in the present case, for the reason being that the said exception, which has been carved out was only on those cases, where the Assessing Officer or an order, which has been passed by the Commissioner Appeals or the Income Tax Appellate Tribunal; in an appeal and the appeal or revision was not pending at the relevant time, but since, in the instant case, no such situation has arrived at because the appeal itself was pending consideration since 2017, along with the delay condonation application, the provisions of (ii) of Section 2 (1) (a) of the Act, would not be applicable. In that view of the matter and for the reasons based on the principles consistently assigned by the law Courts, as already referred above, the Writ Petitions are allowed. The matter is remitted back to respondent No.1 to reconsider the application of declaration under Sections 3 and 4 of the Act of 2020 of the petitioner afresh exclusively on its own merits.

Issues Involved:
1. Interpretation and implications of the term "specified date" under the Direct Tax Vivad Se Vishwas Act, 2020.
2. Validity of appeals pending with delay condonation applications.
3. Applicability of Sections 3 and 4 of the Direct Tax Vivad Se Vishwas Act, 2020.
4. Legal status of appeals filed under Section 249 (2) of the Income Tax Act.

Detailed Analysis:

1. Interpretation and Implications of the Term "Specified Date" under the Direct Tax Vivad Se Vishwas Act, 2020:
The court examined the term "specified date" as defined under Section 2(n) of the Act, which is 31st January 2020. The court noted that the appeals of the petitioners were pending before this date, thus meeting the criteria set by the Act. The court emphasized that the "specified date" is crucial for determining the applicability of the Act's provisions.

2. Validity of Appeals Pending with Delay Condonation Applications:
The court addressed the argument that appeals filed with delay condonation applications should not be considered pending appeals. The court referenced the Supreme Court's judgment in Raja Kulkarni Vs. State of Bombay (AIR 1954 SC 73), which held that an appeal is considered pending even if it is accompanied by a delay condonation application. The court further supported its stance by citing the case of Commissioner Income Tax, Rajkot Vs. Shatrusailya Digvijaysingh Jadeja (Civil Appeal No. 4411 of 2003), where the Supreme Court ruled that appeals pending with delay condonation applications are to be treated as valid appeals.

3. Applicability of Sections 3 and 4 of the Direct Tax Vivad Se Vishwas Act, 2020:
Sections 3 and 4 of the Act were scrutinized to determine if the petitioners' cases fell within their scope. Section 3 specifies the conditions under which a declaration can be made, and Section 4 outlines the procedure for filing such a declaration. The court concluded that since the appeals were pending as of the specified date, the petitioners were entitled to seek relief under these sections. This interpretation was reinforced by the Gujarat High Court's judgment in Ritesh Bakuleshbhai Mehta Vs. The Principal Commissioner of Income Tax, which supported the notion that appeals pending with delay condonation applications are valid for the purposes of the Act.

4. Legal Status of Appeals Filed under Section 249 (2) of the Income Tax Act:
The court examined whether the appeals filed under Section 249 (2) of the Income Tax Act, which were pending with delay condonation applications, should be considered valid. The court referenced multiple judgments, including the Supreme Court's ruling in Dr. Renuka Datla Vs. Commissioner Income Tax (2003) 2 SCC 19, which held that appeals pending with delay condonation applications are to be treated as pending appeals. The court concluded that the appeals of the petitioners, filed in 2017 and pending as of the specified date, should be considered valid and pending for the purposes of the Act.

Conclusion:
The court allowed the writ petitions, remitting the matter back to the respondent to reconsider the applications for declaration under Sections 3 and 4 of the Direct Tax Vivad Se Vishwas Act, 2020, on their merits. The court emphasized that appeals pending with delay condonation applications should be treated as valid appeals for the purposes of the Act, aligning with the consistent legal principles established by the Supreme Court and other High Courts.

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