2024 (9) TMI 93 - HC - Income Tax

Eligibility for the benefit of VSV Scheme - Miscellaneous Application filed by the petitioner was not pending as on 31st January, 2020 - HELD THAT - As per provisions of the VSV Act, it emerges that the petitioner has to be an appellant so as to be eligible on the specified date i.e. 31st January, 2020 to file declaration under Sections 3 and 4 of the VSV Act. Admittedly, the appeal filed by the petitioner in the year 2015 was not pending as on 31st January, 2020. In view of order dated 03rd September, 2020 passed by the Tribunal recalling its order dated 26th March, 2019 whereby appeal filed by the petitioner was dismissed, the appeal was restored to its file i.e. Appeal filed in the year 2015. Therefore, the appeal of the petitioner has to be considered as pending as on 31st January, 2020 which is the specified date as per the VSV Act. When the petitioner has filed declaration under the VSV Act to claim the benefit of the Scheme, the Tribunal had already recalled the order dated 26 th March, 2019 and therefore, the appeal preferred by the petitioner before the Tribunal was pending as on 31st January, 2020. It cannot be said that no appeal was pending as on 31st January, 2020 when the petitioner filed the application/declaration under the provisions of the Scheme in view of order dated 03rd September, 2020 passed by the Tribunal in Miscellaneous Application No. 75/Ahd/2020 preferred by the petitioner to recall order dated 26th March, 2019 whereby appeal of the petitioner was dismissed for non-prosecution. Thus the impugned action of the respondent authority of rejecting the declaration filed by the petitioner is not tenable and accordingly, the same is quashed and set aside. The respondent authority is directed to consider and process the declaration filed by the petitioner under the provisions of the VSV Act within a period of 12 weeks from the date of receipt of copy of this order.

Summary

Issues:
Petitioner's eligibility for benefits under the Vivad se Vishwas scheme based on the pending appeal status as on the specified date of 31st January, 2020.

Analysis:
The petitioner filed a petition under Article 226 seeking directions to accept the declaration under the Vivad se Vishwas scheme for the Assessment Year 2010-11. The petitioner's return for A.Y. 2010-11 was scrutinized, leading to an assessment order assessing total income at Rs. 58,17,604. Subsequent appeals to CIT (A) and the Tribunal were dismissed, with a Miscellaneous Application filed by the petitioner to recall the dismissal order. The Vivad Se Vishwas Act, 2020 was enacted to reduce pending income tax litigation. The Tribunal allowed the Miscellaneous Application, reviving the Tax Appeal. The petitioner then filed a revised declaration under the VSV Act, which was rejected by the respondent, citing the absence of a pending appeal as of 31st January, 2020.

The petitioner argued that the appeal was restored by the Tribunal's order dated 3rd September, 2020, making it pending as of 31st January, 2020, entitling the petitioner to benefits under the VSV Act. The respondent contended that as of the specified date, no appeal or application to recall the order was pending, thus denying eligibility for the scheme benefits. The respondent relied on the definition of 'appellant' under the VSV Act and Circular No.21/2020 for clarification.

The Court analyzed the provisions of the VSV Act, emphasizing the need for the petitioner to be an appellant on the specified date to avail the scheme benefits. Despite the appeal not being pending as of 31st January, 2020, the Tribunal's order recalling the dismissal made the appeal pending on the specified date. The Court highlighted that when the petitioner filed the declaration, the appeal was already pending due to the Tribunal's order. Consequently, the Court found the rejection of the declaration by the respondent unjustified and directed processing of the petitioner's declaration under the VSV Act within 12 weeks.

In conclusion, the Court disposed of the petition, quashing the respondent's action and directing them to process the petitioner's declaration under the VSV Act. No costs were awarded in the matter.