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TMI Blog2021 (7) TMI 171X X X X Extracts X X X X X X X X Extracts X X X X ..... le to be set aside as such. Such a classification sought to be made would not be fitting into the requirements of intelligible differentia having nexus to the object to be achieved. Despite a query from the Court as to the purpose of this classification, there was no answer forthcoming from the Revenue. There does not appear to be any object to be achieved by such an unreasonable and arbitrary classification leading to discrimination among tax payers whose cases are falling in Clauses (i) or (ii) on one hand and those whose cases fall under Clauses (iii) to (vi) of Section 143(1)(a) of the IT Act. On which basis circular purports to exclude appeals arising from the orders passed u/s 143(1)(a)(i) or (ii). Neither there is reference to any basis for the same in the circular nor there is any provided in the affidavit-in-reply. Having regard to the provisions of the enactments and the rules thereunder, in the absence of any material, we are not in a position to appreciate that there is exclusion of appeals arising from orders passed under section 143(1) (a)(i) or (ii) of the IT Act. It is not the case that there is any particular object sought to be achieved by such exclusion of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and total tax liability to the tune of ₹ 19,84,908/- with interest thereon totalling to ₹ 31,83,240/-. It has been referred to by the petitioner that while preparing the return of income, audit report in Form No.10B was also prepared but the same remained to be filed along with the return of income. According to petitioner, there have been no reasons coming forth as to why the exemption under section 11 of the Act was disallowed or the adjustments could not have been made in the intimation under section 143(1)(a) of the IT Act. 4. Against aforesaid intimation, the petitioner preferred an appeal with the Commissioner of Income Tax (Appeals)-1, Mumbai ( CIT-A ) in November, 2018. 5. The appeal was dismissed on 31st January, 2020 on the ground of filing of the return belatedly. 6. Mr. Dharan Gandhi, learned counsel for the Petitioner states that in the meanwhile, the Direct Tax Vivad Se Vishwas Act, 2020, had been enacted (hereinafter referred to as DTVSV Act) and enforced for resolution of disputed tax and for the matters connected therewith or incidental thereto. 7. The learned counsel for Petitioner submits that against the CIT(A) decision dated 31.01.202 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on in adjustments under the clauses or sub clauses of section 143 of the IT Act. There is no such reference in the enactment. However, such a distinction is sought to be carved out under the circular No. 21 of 2020 dated 04.12.2020 issued with an answer given to a question which goes beyond the provisions of the DTVSV Act. He submits that, answer to question no.71 does not have any rationale much less any plausible basis. The answer to question No.71 under the clarification, having regard to the provisions of the DTVSV Act, as a matter of fact, intercepts its underlying purpose and object and purports to bring in classification in appeals which is not intended under the enactment. He submits that the Petitioner s case squarely falls within the four corners of the DTVSV scheme and the Petitioner is eligible to have its benefit. The learned counsel refers to affidavit-inreply of the revenue and submits that none of the facts are in dispute nor the provisions of the enactments. As a matter of fact, it can be said that there is tacit endorsement to the Petitioner s case. 11. Learned counsel for the Respondents takes us through provisions of section 143 (1)(a)(i) and (ii) of the IT A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on or before the specified date; (v) a person who has filed an application for revision under section 264 of the Income Tax Act and such application is pending as on the specified date; (ii) It is also pertinent to refer to section 2(1)(j) defining the term disputed tax , reading, thus : - (j) disputed tax , in relation to an assessment year or financial year, as the case may be, means the income- tax, including surcharge and cess (hereafter in this clause referred as to the amount of tax) payable by the appellant under the provisions of the Income-tax Act, 1961, as computed hereunder : (A) in a case where any appeal, writ petition or special leave petition is pending before the appellate forum as on the specified date, the amount of tax that is payable by the appellant if such appeal or writ petition or special leave petition was to be decided against him; (B) in a case where an order in appeal or in writ petition has been passed by the appellate forum on or before the specified date, and the time for filing appeal or special leave petition against such order has not expired as on that date, the amount of tax payable by the appellant after giving effe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... question No.71. Question No.71 and answer thereto, under CBDT circular bearing no.21/2020 dated 04/12/2020 read, thus : Q.71 Vivad se Vishwas forms do not contain a specific option to settle appeal filed against intimation u/s. 143(1) of the Act. Accordingly, please clarify how to settle such appeal, which is pending as on 31st Jan.2020 (or time to file appeal has not expired on 31st Jan. 2020). Answer : Appeal filed against intimation u/s. 143(1) of the Act is eligible under Vivad se Vishwas if adjustment has been made under sub-clauses (iii) to (vi) of clause (a) of section 143(1) of the Act. 15. For ready reference, the provisions of Section 143 (1) (a) (i) to (vi) of the IT Act are quoted below:- Section 143. (1) Where a return has been made under section 139, or in response to a notice under sub-section (1) of section 142, such return shall be processed in the following manner, namely:- (a) the total income or loss shall be computed after making the following adjustments, namely:- (i) any arithmetical error in the return;[***] (ii) an incorrect claim, if such incorrect claim is apparent from any information in the return; [(iii) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed on a decision of this court in the case of Macrotech Developers Ltd. Vs. Principal Commisioner of Income Tax, reported in [2021] 126 taxmann.com 1 (Bombay), wherein it has been observed to the effect that clarifications / answers given by CBDT in response to certain questions not aligning with the legislative intent and doing violence to plain language of the statute and cannot be accepted. He has further relied on the Supreme Court judgment in the case of Keshavji Ravji Co. Etc. Etc. Vs. Commissioner of Income Tax, reported in 1990 (82) CTR 0123 wherein it has been considered that the Tribunals and Courts are not supposed to interpret law in the light of circular. The Supreme Court, in the case of Uco Bank Vs. Commissioner of Income Tax, reported in (1999) 154 CTR 0088 has observed that CBDT circulars may tone down the rigour of the law and ensure a fair enforcement of its provisions, however those cannot be adverse to the assessee. The power is for just, proper and efficient management of the work and are meant to mitigate the rigour application of provisions. 17. It may have to be referred to that circulars cannot be issued adverse to the interest of assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... query from the Court as to the purpose of this classification, there was no answer forthcoming from the Revenue. There does not appear to be any object to be achieved by such an unreasonable and arbitrary classification leading to discrimination among tax payers whose cases are falling in Clauses (i) or (ii) on one hand and those whose cases fall under Clauses (iii) to (vi) of Section 143(1)(a) of the IT Act. 21. It is queer on which basis circular purports to exclude appeals arising from the orders passed under section 143(1)(a)(i) or (ii). Neither there is reference to any basis for the same in the circular nor there is any provided in the affidavit-in-reply. Having regard to the provisions of the enactments and the rules thereunder, in the absence of any material, we are not in a position to appreciate that there is exclusion of appeals arising from orders passed under section 143(1) (a)(i) or (ii) of the IT Act. It is not the case that there is any particular object sought to be achieved by such exclusion of the appeals arising from the orders passed under section143(1)(a)(i) or (ii). 22. In the scenario, when the circulars are issued exercising powers under sections 10 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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