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TMI Blog2021 (6) TMI 1054X X X X Extracts X X X X X X X X Extracts X X X X ..... since, what is required to be considered is the pendency of the appeal with an application for condonation and the admission of the appeal as on the date of filing of declaration. In our view, even after 04.12.2020, if an appeal is filed with an application for condonation of delay and the appeal is admitted by the appellate authority before the date of filing of the declaration, the benefit is to be extended, as otherwise, it would lead to creation of separate class of persons among the declarants, without any reasonable basis, resulting in discrimination thereby violating Article 14 of the Constitution of India. In the present case, the petitioner having filed an appeal before Tribunal along with an application for condonation and the Tribunal, having heard the matter on 05.02.2021 by condoning the delay, it is to be construed as pending appeal as on the date of filing of declaration on 08.02.2021. As a matter of fact, the Tribunal by order dt.15.02.2021, allowed the appeal of the petitioner remitted the matter back by restoring the appeal on the file of CIT, for fresh adjudication. Once it is considered that the appeal before the Tribunal is deemed as having been file ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... JUSTICE T.VINOD KUMAR Counsel for the Petitioner : Sri C.V. Narasimham Counsel for Respondents : Sri A. Radha Krishna, ORDER: (Per Hon ble Sri Justice T.Vinod Kumar) In this Writ Petition, the petitioner is challenging the proceeding dt. 22.04.2021 issued by the 1st respondent, whereby the petitioner s revised declaration/ application dt. 31.03.2021 in Form 1 and 2, filed under the provisions of the Direct Tax Vivad Se Vishwas Act, 2020 (for short, the Act of 2020 ), was rejected. Back ground facts : 2. It is the contention of the petitioner that the 2nd respondent had completed the assessment of the petitioner for the Assessment Year 2011-12 under Section 143(3) read with Section 147 of the of the Income-Tax Act, 1961 (for short, the Act of 1961 ) on 28.12.2018; that aggrieved thereby, the petitioner filed an appeal under Section 246A of the Act of 1961 before the Commissioner of Income Tax (Appeals) (for short, the CIT ), on 19.02.2019; that the said appeal was dismissed by the CIT on 18.09.2019; that assailing the said order, the petitioner preferred further appeal before the Income Tax Appellate Tribunal (for short, the Tribunal ) on 25.01. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and accordingly, requested for accepting the application submitted in Forms 1 and 2 under the Act of 2020, and the same cannot be rejected on the ground that there was no appeal pending as on the specified date viz., 31.01.2020. 7. The petitioner, in the writ affidavit on oath, has stated that the 1st respondent, on being contacted, had informed the petitioner that there is no mechanism provided for withdrawing the rejection order passed or rectifying the same, and advised the petitioner to resubmit Forms 1 and 2 afresh. 8. The petitioner thereafter re-submitted declaration/application under the Act of 2020 in Form 1 and 2, on 31.03.2021, opting to settle the dispute pending re-adjudication before the CIT, pursuant to the order of the Tribunal dt.15.02.2021. The said application submitted by the petitioner on 31.03.2021 was once again rejected by the 1st respondent on 22.04.2021. The reason of such rejection is stated as the assessee filed revised application on 31.03.2021. As per the DTVSV, there should be an appeal pending before any of the appellate authorities as on 31.01.2020. Since in this case, no appeal is pending as on 31.01.2020, the application filed is inv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d counsel contends that having regard to the purpose for which the Act of 2020 was enacted, the benefit to seek for resolution of pending dispute is extended even where the appeal has been preferred with condonation of delay, and is pending before the appellate authority, and in all such cases the appeal will be deemed as pending as on 31.01.2020. However, the benefit is sought to be restricted only to the applications for condonation of delay filed in such appeals before the date of issue of this Circular, i.e., dt.04.12.2020, which restriction, in the submission of the learned counsel for the petitioner, has no basis or any sanctity apart from being discriminatory and violative of Articles 14 and 19 of the Constitution of India. 13. Learned counsel for the petitioner would further contend that if the intention of the Board as per the circular was to extend the benefit in respect of only appeals where the time limit for filing appeal expired between 01st April, 2019 to 31st Jan,2020, such benefit has to be extended to all appellants uniformly,(i.e.,) whoever seeks to file declaration/application under the Act of 2020 falling within the above period, and it cannot be restricted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 021 mentioning that an appeal is pending before the Tribunal on the specified date cannot be accepted, and thus, the reason assigned by the 1st respondent while rejecting the declaration form-1 is valid and does not call for any interference. Consideration by the Court : 18. We have considered the submissions made by the respective learned counsel. 19. Before adverting to the respective contentions urged by the learned counsel, it is necessary to note the intent and purpose for which the Act of 2020 was enacted by the Parliament. The statement of objects and reasons appended to the Act of 2020 would throw light on this aspect, which reads as under: Over the years pendency of appeals filed by taxpayers as well as Government has increased due to the fact that the number of appeals that are filed is much higher than the number of appeals that are disposed. As a result, a huge amount of disputed tax arrears is locked-up in these appeals. As on 30th November, 2019, the amount of disputed direct tax arrears is ₹ 9.32 lakh crores. Considering that the actual direct tax collection in the financial year 2018-19 was ₹ 11.3 lakh crores, the disputed tax arrears ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eclaration may be made thereafter up to the date to be notified by the Government. 20. A reading of the statement of objects and reasons would indicate that the intent and purport behind the introduction of the Vivad Se Vishwas Bill, 2020 (Act of 2020) was i) to reduce tax disputes pertaining to direct taxes, ii) the staggering disputed direct tax arrears, nearly as equal to nations one year direct tax collections of the year 2018-19. This was the cause of concern which was sought to be addressed by the Government with the introduction of the said Bill, which later, on receiving the assent of the President of India had become the Act of 2020 w.e.f. 17.03.2020. 21. Further, the intent of the Presenter of the Bill, i.e., the Hon ble Finance Minister, was to reduce tax litigations, as there is a huge pendency of direct tax cases before various appellate forums. The tax payer in whose cases the appeals are pending before various forums can make use of the scheme and benefit, as he is required to pay only the amount of disputed taxes and would get complete waiver of interest and penalty. The relevant portion of the Budget Speech of the Hon ble Finance Minister made on 1st Februa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s enacted. 26. The Hon ble Supreme Court in COMMISSIONER OF SALES TAX V/s. MANGAL SEN SHYAM LAL AIR 1975 SC 706, held that, a statute is supposed to be an authentic repository of the legislative will and the function of a Court is to interpret it according to the intent of them that made it. From that function, the Court is not to recile. It has to abide by the maxim, ut res magis valeat quam pereat , lest the intention of the Legislature may go in vein or be left to evaporate into the thin air. 27. A Constitution Bench of the Hon ble Supreme court in Tinsukhia Electric Supply Co. Ltd. V. State of Assam (1989) 3 SCC 709 , held that The courts strongly lean against any construction which tends to reduce a statute to a futility. The provision of a statute must be so construed as to make it effective and operative, on the principle ut res magis valeat quam pereat . 28. By applying the principles inferred from the settled position of law as above, to the facts of the present case, it is to be seen that the Act of 2020 is intended to apply to all direct tax disputes which are pending at various levels, before the specified date , as defined in Secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the same would run contrary to the scheme of the Act of 2020 and the powers exercised by Board under Section 10 and 11 to issue directions or orders in public interest or to remove difficulties. 37. Therefore, we are unable to persuade ourselves to confine the benefit of deemed pendency of appeal only if an application for condonation is filed on or before 04.12.2020, as in our view no significance can be attached to the said date of issue of the circular, since, what is required to be considered is the pendency of the appeal with an application for condonation and the admission of the appeal as on the date of filing of declaration. 38. Thus, in our view, even after 04.12.2020, if an appeal is filed with an application for condonation of delay and the appeal is admitted by the appellate authority before the date of filing of the declaration, the benefit is to be extended, as otherwise, it would lead to creation of separate class of persons among the declarants, without any reasonable basis, resulting in discrimination thereby violating Article 14 of the Constitution of India. 39. In the present case, the petitioner having filed an appeal before Tribunal along with an ap ..... 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