2024 (1) TMI 1136 - HC - Income Tax

Benefits under the VsV Act Vivad Se Vishwas Act denied - Petitioner made a short payment, due to which the Petitioner's declaration was not accepted - Respondents closed their old website and migrated to a new website and Petitioner has pleaded that, as a result, there were several technical glitches in accessing the new website - HELD THAT - Respondents should have either accepted the Petitioner's payment made within 15 days from the receipt of Form 3 or at least informed the Petitioner that she was required to pay an additional amount on or before 31.10.2021. The Respondents did neither. Even the requirement of paying an additional amount was informed to the Petitioner only by communication dated 01.04.2022, long after the extended date of 31.10.2021 had lapsed. Suppose the object of the VsV Act is to reduce the pending tax litigations, grant relief to eligible declarants and generate substantial revenue for the Government. In that case, such an approach cannot be said to be in furtherance of such an objective. Such an approach almost amounts to frustrating the provisions of the VsV Act, and the scheme made thereunder. In this case, the delay alleged on the part of the Petitioner is hardly 11 days. The alleged deficit payment, if any, is of hardly Rs. 2,21,862/-. From the facts borne out of the record, it is difficult to hold that there was any such delay. Even if it is assumed that there was some marginal delay, this delay is attributable to the technical glitches referred to by the Petitioner and also the mistakes of the Respondents in processing the Petitioner's declaration. As noted even if the contention about technical glitches is kept aside, this is a matter where the Respondents themselves committed several errors in processing the Petitioner's declaration in Form l, which was made within the prescribed period and by due compliance with the prescribed procedure. This is a matter where the Petitioner withdrew her pending appeal and where the Petitioner, in the first instance, determined the amount payable under the VsV Act correctly but had to struggle to get the Respondent's determination corrected. Even though the Petitioner had filed Form 4 and made a payment on 12.10.2021, i.e. much before the extended date of 31.10.2021 still, the impugned communication dated 22.01.2022 erroneously alleged that the Petitioner had not filed Form 4 or that the Petitioner had made no payments before the extended date Thus we think that the petitioner should not have been denied the benefits under the VsV Act. We direct the Respondents to accept the Petitioner's declaration in Form 1 under the VsV Act and process the same by issuing the final certificate in Form 5 subject Petitioner must pay the balance amount with interest at the rate of 12% per annum from 31.10.2021 till the date of payment, which shall be within 21 days from today; and shall pay an additional amount of Rs. 2,00,000/- to the Respondents within 21 days from today.

Issues Involved:
1. Rejection of Petitioner's declaration under the Vivad Se Vishwas Act, 2020 (VsV Act).
2. Alleged technical glitches during the migration of the Respondents' website.
3. Incorrect computation of amounts payable under the VsV Act.
4. Delay in payment and filing of necessary forms by the Petitioner.

Summary:

Issue 1: Rejection of Petitioner's Declaration under the VsV Act
The Petitioner challenged the communications dated 22.01.2022 and 01.04.2022, which rejected her declaration under the VsV Act and denied her benefits. The Petitioner had filed a declaration on 29.01.2021, but the Respondents initially issued an erroneous Form 3. After several follow-ups, a corrected Form 3 was uploaded on the new website, which the Petitioner accessed in October 2021. The Petitioner paid the required amount within 15 days of accessing the revised Form 3. However, the Respondents rejected the declaration on the grounds of non-filing of Form 4 and delayed payment.

Issue 2: Alleged Technical Glitches During Website Migration
The Petitioner contended that technical glitches during the migration to a new website in June 2021 prevented her from accessing the revised Form 3 until October 2021. The Respondents denied these glitches but acknowledged that the old website was closed and a new one was launched. The Court noted that the Petitioner consistently followed up on the matter and the technical glitches could not be outrightly rejected.

Issue 3: Incorrect Computation of Amounts Payable under the VsV Act
Initially, the Respondents issued Form 3 with erroneous figures, which the Petitioner promptly sought to correct. The corrected Form 3, reflecting the correct amount of Rs. 14,04,620/-, was eventually uploaded, but the Petitioner faced difficulties accessing it due to the website migration. The Court found that the Petitioner was diligent in her efforts and the errors were on the Respondents' part.

Issue 4: Delay in Payment and Filing of Necessary Forms by the Petitioner
The Petitioner paid the amount of Rs. 14,04,620/- within 15 days of accessing the revised Form 3 and filed Form 4, which the Respondents initially acknowledged. However, the Respondents later claimed that the payment was made after the due date and rejected the declaration. The Court held that the delay, if any, was marginal and attributable to the technical glitches and errors by the Respondents.

Conclusion:
The Court quashed the impugned communications dated 22.01.2022 and 01.04.2022, directing the Respondents to accept the Petitioner's declaration under the VsV Act and issue the final certificate in Form 5, subject to the Petitioner paying the balance amount of Rs. 2,21,862/- with interest and an additional amount of Rs. 2,00,000/- within 21 days. The rule was made absolute without any order for costs.

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