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TMI Blog2022 (1) TMI 943X X X X Extracts X X X X X X X X Extracts X X X X ..... g is not provided under Section 5 of the Vivad Se Vishwas Act, it is axiomatic that principles of natural justice, which is the very essence of fairness, demands that before an adverse decision is taken affecting the rights and liabilities of an aggrieved person, he ought to be put on notice and given an opportunity of hearing. The same having not been done in the present case, the impugned decision suffers from violation of the principles of natural justice which is one more reason why we are constrained to interfere with the same. We set aside the impugned order dated 20.04.2021 passed by respondent no.2 rejecting the declaration / application of the petitioner dated 03.03.2021 for settlement of tax dues under the Direct Tax Vivad Se Vishwas Act, 2020 and remand the matter back to the authority for taking a fresh decision in accordance with law. - W.P.No.28250 of 2021 - - - Dated:- 6-1-2022 - HON BLE SRI JUSTICE UJJAL BHUYAN AND HON BLE SRI JUSTICE A. VENKATESHWARA REDDY Counsel for Petitioner : Sri Ch. Siddhartha Sarma Counsel for the respondents : Mr. B. Mukherjee Mr. K. Raji Reddy ORDER : (Per Hon ble Sri Justice Ujjal Bhuyan) Heard Mr. Ch. Siddhart ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .2. However, by the order dt.20.04.2021, the declaration was rejected. 8. Aggrieved, present Writ Petition has been filed. 9. Common counter-affidavit has been filed by respondent no.3 on behalf of all the respondents. Though contentions have been advanced disputing the eligibility of the petitioner for resolution of tax dispute under the Vivad Se Vishwas Act, however, respondents have supported the impugned decision of the respondent no.2 on merit as well. It is stated that on the specified date, i.e., on 30.01.2020 there was no appeal of the petitioner which was pending before the Income Tax Appellate Tribunal. It is further stated that though the specified date was subsequently extended to 04.12.2020 even then also there was no appeal pending as on that date. Therefore, petitioner was not eligible to make the declaration. Accordingly, respondent no.2 had rightly rejected such declaration of the petitioner. 10. Learned counsel for the petitioner has relied upon Circular No.21 of 2020 issued by the Central Board of Direct Taxes (C.B.D.T.) on 04.12.2020, more particularly, to the answer given to Question No.59 and also to a co-ordinate Bench decision of this Court in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... filed before the Income Tax Appellate Tribunal on 24.02.2021 against the order of the first appellate authority dated 10.10.2019. As no appeal was pending as on the specified date, i.e., on 31.03.2020 (should be dated 31.01.2020 as we shall see), and as the time to file the appeal had expired, the assessee (petitioner) was not eligible to file the declaration under the Vivad Se Vishwas Act, and accordingly she was not treated as a valid declarant. However, respondent no.2 proceeded further and also held that the declaration was not maintainable on merit as well by holding that the dispute was of disputed interest, whereas as per the grounds of appeal before the first appellate authority and the Income Tax Appellate Tribunal the dispute was on quantum of addition and not on interest portion. 15. At the outset, we are of the view that when the declaration of the petitioner was rejected on the ground of non-maintainability / ineligibility, it was unnecessary for respondent No.2 to have entered into the merit of the claim made by the declarant and thereafter to hold that declarant was not entitled to the relief under the Vivad Se Vishwas Act. 16. Let us now examine the said deci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble Finance Minister, while introducing the related bill, indicates or reveals the intention behind introduction of the bill leading to enactment of the Vivad Se Vishwas Act. To remove any doubts in this regard, we may advert to the statement of objects and reasons necessitating enactment of the aforesaid act, 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 constitute nearly one year direct tax collection. 2. Tax disputes consume copious amount of time, energy and resources both on the part of the Government as well as taxpayers. More over, they also deprive the Government of the timely collection of revenue. Therefore, there is an urgent need to provide for resolution of pending ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d tax arrears is locked up in these appeals. Noting that tax disputes consume copious amount of time, energy and resources, both on the part of the Government as well as taxpayers besides depriving the Government from timely collection of revenue, it was noted that there was an urgent need to provide for resolution of pending tax disputes. Such resolution would not only benefit the Government by generating timely revenue but also the taxpayers who would be able to deploy the time, energy and resources saved by opting for such dispute resolution towards their business activities. 20. Thus, a conjoint reading of the speech of the Hon ble Finance Minister as well as the statement of objects and reasons would indicate that the intent and purport behind enactment of the above act was to reduce tax disputes (appeals) pertaining to direct taxes in such a manner that it would be beneficial both to the Government as well as to the assessees. Huge amount of disputed tax arrears is locked up in large number of pending appeals for early resolution of which the above act has been enacted. 21. Keeping the above in mind, we may now refer to some of the provisions of the Vivad Se Vishwas Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct to the provisions of Section 5, the designated authority shall not institute any proceeding in respect of an offence or impose or levy any penalty or charge any interest under the Act in respect of tax arrear. 29. It may be mentioned that by subsequent notifications issued by the Ministry of Finance, Government of India, various dates relevant for the Vivad Se Vishwas Act were extended. Ultimately, by the notification dt.26.02.2021, the last date for filing of declaration was extended up to 31.03.2021. However, we do not find anything on record to suggest that the specified date initially fixed on 31.01.2020 was extended. 30. From a reading of the Vivad Se Vishwas Act, it is seen that a declarant would be eligible to file a declaration under Section 4 of the aforesaid Vivad Se Vishwas Act if his appeal or Writ Petition or Special Leave Petition filed by him or by the Income Tax authority or by both is pending as on the specified date, i.e., 31.01.2020. 31. Reverting back to the facts of the case, we find that against the order of the first appellate authority, i.e., respondent no.3, dated 10.10.2019, petitioner had filed appeal before the Income Tax Appellate Tribunal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ualised was whether the taxpayer in whose case the time limit for filing of appeal had expired before 31.01.2020, but an application for condonation of delay had been filed before the date of issuance of the circular i.e., 04.12.2020, and whether such a taxpayer would be construed to be eligible. Clarification given by the C.B.D.T. is that if the application for condonation of delay was filed before the date of issue of the circular, i.e., 04.12.2020 and if the appeal was admitted by the appellate authority before the date of filing of the declaration, such appeal would be deemed to be pending as on 31.01.2020. In other words, the appeal need not be filed on or before 31.01.2020 to be construed as pending. If the application for condonation of delay was filed before 04.12.2020 (which was after the specified date of 31.01.2020) and the appeal was admitted, then it would be deemed that the appeal was pending as on 31.01.2020. 35. Thus, Central Board of Direct Taxes (C.B.D.T.), which is the highest body under the Act, has clarified by way of its answer that if the time limit for filing appeal had expired during the period from 01.04.2019 to 31.01.2020 and the application for condon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ff date is mentioned as 31st day of January 2020, by Notification No.21/2020, dt. 04.12.2020, which has been issued by the Board exercising powers conferred under Sections 10 and 11 of the Act of 2020, it has been stated that even in respect of appeals where time for filing appeal has expired during the period 1st April 2019 to 31st January 2020, and an application for condonation of delay is filed before the date of issue of Circular No.21/2020 on 04.12.2020, and the appeal is admitted before the filing of declaration, such appeal is to be treated as deemed pending as on 31st January 2020. 30. It is to be noted that the date for filing of declaration under the Act of 2020 opting to avail the benefit of Scheme was originally notified as 30.03.2020, which was extended from time to time, including up to 31.12.2020. 31. Subsequently the time for filing declarations under the Act of 2020 was finally extended by Notification No.9/2021 dt.26.02.2021 up to 31.03.2021. So petitioners application filed on 08.02.2021, was with in time. 32. However, while providing answer to Q.No.59, in Circular No.21/2020 issued on 04.12.2020, the last date for filing declaration under the Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. 40. The natural corollary of the Tribunal accepting the application for condonation is to the effect that the appeal before the Tribunal as having been filed in time, since, such condonation would relate back to the date by which time, the appeal against the order of CIT ought to have been filed by the petitioner. Once it is considered that the appeal before the Tribunal is deemed as having been filed in time, the same would have to be construed as having been filed before the specified date , and thus, an appeal can be stated to be pending before the appellate forum and the petitioner would have to be considered as an 'appellant' as defined in Section 2(1)(a)(i) of the Act of 2020, and the tax as assessed would have to be considered as disputed tax', as defined under Section 2(1)(j)(B) of the Act of 2020. 41. Alternativel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Leave Petition has been preferred against the said decision of the coordinate Bench, but he fairly concedes that there is no stay order. 41. Insofar the present case is concerned, petitioner filed her declaration on 03.03.2021 which was before the last extended date for filing declaration i.e., 31.03.2021. But, before 03.03.2021, the appeal was filed by the petitioner before the Income Tax Appellate Tribunal on 24.02.2021 along with an application for condonation of delay. The delay was condoned on 23.03.2021 on which date the appeal was also disposed of considering the submission of the petitioner that she would file declaration under the Vivad Se Vishwas Act which was not objected to by the Revenue. 42. On due consideration, we are in agreement with the view taken by the coordinate Bench in Boddu Ramesh (1 supra) more particularly to those expressed in paragraph nos.40 and 43 thereof. 43. That apart, we find that rejection of the declaration was not preceded by any notice or hearing. Though such notice or hearing is not provided under Section 5 of the Vivad Se Vishwas Act, it is axiomatic that principles of natural justice, which is the very essence of fairness, demands ..... X X X X Extracts X X X X X X X X Extracts X X X X
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