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TMI Blog2022 (11) TMI 1304X X X X Extracts X X X X X X X X Extracts X X X X ..... t have been treated fairly in the past. Such welfare, beneficent or social justice oriented legislation are also known as Remedial statutes. It is settled law that any ambiguity in a taxing statute enures to the benefit of the assessee, but any ambiguity in the amnesty act or exemption clause in an exemption notification has to be construed in favour of the revenue and amnesty/exemption has to be given only to those assesses who demonstrate that they satisfy all the conditions precedent for availing the amnesty/exemption. [See: Commissioner of Customs (Import), Mumbai vs. Dilip Kumar Company and Ors [ 2018 (7) TMI 1826 - SUPREME COURT] . For determining whether the DTVSV Act is a taxing statute or an amnesty act or a beneficial/remedial act, one has to examine what is the objective and intent behind enacting the statute. It is a statute which provides benefit as it recovers the taxes for the Department upfront without having to wait to succeed in the litigation which itself is uncertain. DTVSV Act also provides a sop to an assessee, as it puts an end to the litigation and the assessee is relieved of payment of interest and penalty if the same were to imposed. The DTVSV A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tured as a litigation settlement scheme and was not similar to the earlier VDI Scheme. It further held that the object of Kar Vivad Samadhan Scheme was to put an end to all pending matters in the form of appeals, reference, revisions and writ petitions under the IT Act/Wealth Tax Act and the object was to put an end to litigation in various forms and at various stages under the IT Act/Wealth Tax Act and therefore the rulings on the scope of appeals and revisions under the IT Act or VDI Scheme will not apply. Consequently, the judgment of the Supreme Court in Dilip Kumar (supra) which deals with interpretation of exemption notification, has no application to the present case. As under the DTVSV Act, 2020 each appeal, writ petition or SLP is treated as a separate dispute which is evident from Section 2(1)(j) read with Section 2(1)(a) of the Act - The unit for settlement of dispute under the DTVSV Act, 2020 is an appeal, writ petition or SLP and not the assessment year as had been canvassed by the revenue. Even assuming that the DTVSV Act is a taxing statute, there is no restriction on an assessee to choose an appeal to be settled under the DTVSV Act as Section 2(1)(j) u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Option to the assessee to choose appeals for the same assessment year, which are pending before different forums, to be settled under the provisions of DTVSV Act - The contention of the respondents-revenue that the option is available to the petitioner only in a case where there are cross appeals arising from the same order is incorrect as FAQ-19 in unequivocal terms indicates that the assessee has an option to choose the appeals to be settled under the DTVSV Act and there is no obligation on the petitioner to settle all the appeals filed by the assessee for a particular assessment year. This Court is of the view that an assessee is free to settle any appeal under the DTVSV Act and is not required to settle all the pending appeals filed by the respondent-revenue for an assessment year. - W.P.(C) 3973/2021 - - - Dated:- 25-11-2022 - HON'BLE MR. JUSTICE MANMOHAN AND HON'BLE MS. JUSTICE MANMEET PRITAM SINGH ARORA Petitioner Through : Mr. Percy Pardiwalla, Senior Advocate along with Mr. Nikhil Ranjan and Mr. Hiten Chande, Advocates. Respondents Through : Mr. Zoheb Hossain, Senior Standing Counsel for Revenue along with Mr. Vipul Aggarwal and Mr. Parth Semw ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the Assessing Officer passed an assessment order in the remand proceeding holding that the ECB interest earned by the Petitioner is taxable under the Act and levied interest under Section 234B and 234D of the Act. The Petitioner challenged the assessment order dated 28th July, 2016 by filing an appeal before the Tribunal. 6. On 01st December, 2017, the Supreme Court issued notice in the Special Leave Petition ( SLP ) filed by the Respondent-Department wherein the order of this Court dated 08th April, 2016, dismissing the Respondent-Department s appeal, was challenged on issues (a) (f). 7. On 16th September, 2019, the Tribunal passed an order allowing the appeal of the Petitioner against the order dated 28th July, 2016 passed in remand proceeding and deleted the addition made by the Assessing Officer on account of ECB interest and levy of interest under Section 234D of the Act. 8. On 17th March, 2020, the DTVSV Act was passed by the Parliament which allowed the assessees to settle any dispute pending before the Tribunal, High Court, Supreme Court or before any authorities under the Act. 9. On 08th December, 2020, the Petitioner filed an application under DTVSV Act to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xx xxx xxx Question No.11 In case where disputed tax contains qualifying tax arrears as also non-qualifying tax arrears (such as, tax arrears relating to assessment made in respect of undisclosed foreign income): (i) Whether assessee is eligible to the Vivad se Vishwas itself? (ii) If eligible, whether quantification of disputed tax can exclude/ignore non-qualifying tax arrears? Answer : If the tax arrears include tax on issues that are excluded from the Vivad se Vishwas, such cases are not eligible to file declaration under Vivad se Vishwas. There is no provision under Vivad se Vishwas to settle part of a pending dispute in relation to an appeal or writ or SLP for an assessment year. For one pending appeal, all the issues are required to be settled and if any one of the issues makes the declaration invalid, no declaration can be filed. xxx xxx xxx xxx Question No.14. Whether assessee can avail of the Vivad se Vishwas for some of the issues and not accept other issues? Answer : Refer to answer to question no 11. Picking and choosing issues for settlement of an appeal is not allowed With respect to one order, the appellant must chose to se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Income-tax Act; xxx xxx xxx 3. Amount payable by declarant.-Subject to the provisions of this Act, where a declarant files [under the provisions of this Act on or before such date as may be notified], a declaration to the designated authority in accordance with the provisions of section 4 in respect of tax arrear, then, notwithstanding anything contained in the Income-tax Act or any other law for the time being in force, the amount payable by the declarant under this Act shall be as under, namely:-- Sl.No. Nature of tax arrear Amount payable under this Act on or before the [31st day of December, 2020 or such later date as may be notified] Amount payable under this Act on or after [1st day of January, 2021 or such later date as may be notified] but on or before the last date (a) where the tax arrear is the aggregate amount of disputed tax, interest chargeable or charged on such disputed tax and penalty leviable or levied on such disputed tax. amount of the disputed tax. the aggregate of the amount of disputed tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssment year wise i.e. only one declaration for one assessment year. For different assessment years separate declarations have to be filed. So the appellant needs to specify in the declaration form whether he wants to settle his appeal, or department's appeal in his case or both for a particular assessment year. The computation of tax payable would be carried out accordingly. The Circular No.9/2020 issued by the CBDT is binding on the Department and the Department is not empowered to detract from the beneficial circular issued by the CBDT. In this regard, reliance is placed on the judgment of the Supreme Court in KP Verghese Vs. ITO (131 ITR 597), UCO Bank vs CIT (237 ITR 889) and UOI Vs. Azadi Bachao Andolan (263 ITR 706). 14. Learned senior counsel for the petitioner further submitted that the issue of taxability of ECB interest and levy of interest under Section 234D of the Act, which is a subject matter of the deemed appeal of the Respondent-Department, was arising from the fresh assessment proceeding carried out pursuant to the order of the Tribunal dated 19th September, 2014 and, therefore, was a separate proceeding from the original assessment proceeding carri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ided he settled the other issues with respect to which the appeal or deemed appeal (Assessee s or Revenue s) was pending. According to him it was inconceivable that when some issues were pending before the file of the Assessing Officer and some were before an appellate body, the assessee was required to settle all issues; however after passing of the fresh assessment order, when some issues are before one appellate body and some before another, the assessee could choose to settle only one set of issues. 18. Mr. Zoheb Hossain, learned counsel for the respondents-revenue, further submitted that even assuming without admitting that there is any ambiguity in the scheme of the DTVSV Act, the law being meant for amnesty must be construed strictly and any interpretation must lean in favour of the Revenue. In support of his submission he placed reliance on the judgment of the Supreme Court in Commissioner of Customs (Import), Mumbai vs. Dilip Kumar Company and Ors. (2018) 9 SCC 1 wherein it has been held as under:- 66. To sum up, we answer the reference holding as under: 66.1 Exemption notification should be interpreted strictly; the burden of proving applicability would ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ents did not have any grievance with the Petitioner not settling its own appeal pending before this Court for the A.Y. 2007-08 but, nevertheless, required the Petitioner to settle all the Departmental appeals pending for A.Y. 2007-08. According to him, the interpretation placed by the Respondents on the provisions of the Act was without any basis and wholly arbitrary. He submitted that on the contrary, the provisions of the DTVSV Act and DTVSV Rules treated each appeal as a separate appeal and gave an option to the assessee to settle any appeal under the provisions of the DTVSV Act. He stated that the contention of the Petitioner was further supported by the Circular No.9/2020 dated 22nd April, 2020 FAQ No.19, 36, 40, which clarified that an assessee had an option to settle the appeal arising from the same order and for the same assessment year. Therefore, he emphasised that the interpretation placed by the Department was contrary to intention of the legislature which was evident from the plain language of the law. 24. Learned senior counsel for the Petitioner further submitted that FAQ No.7 of the Circular was applicable when the assessment order was to be passed by the Asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as to be construed in favour of the revenue and amnesty/exemption has to be given only to those assesses who demonstrate that they satisfy all the conditions precedent for availing the amnesty/exemption. [See: Commissioner of Customs (Import), Mumbai vs. Dilip Kumar Company and Ors (supra)]. 29. For determining whether the DTVSV Act is a taxing statute or an amnesty act or a beneficial/remedial act, one has to examine what is the objective and intent behind enacting the statute. The relevant portion of the statement of objects and reasons of the DTVSV Act reads as under:- .Over the years, the 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 the 30th November, 2019, the amount of disputed direct tax arrears is Rs. 9.32 lakh crores. Considering that the actual direct tax collection in the financial year 2018-19 was Rs.11.37 lakh crores, the disputed tax arrears constitute nearly one year direct tax collection. 2. Tax disputes consume c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... statute must be so construed as to give the most complete remedy which the phraseology will permit, 2 so as to secure that the relief contemplated by the statute shall not be denied to the class intended to be relieved. 3 Consequently, the appropriate principles of interpretation to be applied having regard to the entire conspectus of facts are the principles of purposive and liberal interpretation. THE JUDGMENT OF DILIP KUMAR (SUPRA) WHICH DEALS WITH INTERPRETATION OF EXEMPTION NOTIFICATION, HAS NO APPLICATION. 32. The judgment of the Supreme Court in Commissioner of Customs vs. Dilip Kumar Co. (supra) is clearly inapplicable to the facts of the present case. In the case of the Dilip Kumar (supra), the assessee imported a consignment of Vitamin E50 Powder (feed grade) and claimed the benefit of concessional duty at 5% instead of standard 30% which was leviable. According to the assessee, the goods were classifiable under Chapter 2309.90 prawn feed in terms of Notification No. 20 of 1999. The benefit of the notification was denied to the assessee on the ground that the goods imported by the assessee contained chemical ingredient for animal feed and not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appeal, writ petition or SLP were to be decided against the assessee. Section 2(1)(a) of the Act use the words an appeal and Section 2(1)(j) of the Act uses the word any appeal both of which indicate that the unit for settlement of dispute under the provisions of DTVSV Act is an appeal or a writ petition or a SLP. The aforesaid position is further confirmed by the definition of dispute in Rule 2(b) of the DTVSV Rules, 2020 which defines each appeal, writ petition or SLP as a separate dispute for the purpose of computing disputed tax under Rules 9, 10 and 11 of the DTVSV Rules. This is also evident from the statutory Form No.5 issued by the designated authority prescribed under the Rules where the Column No.3 records the detail of the Details of dispute settled (Appeal Reference Number) . 35. The submission of the revenue that under the DTVSV Act the unit of settlement is an assessment year is contrary to its own stand as the Department has no grievance with the petitioner not settling the appeal filed by it for the same assessment year, but requires the petitioner to settle all the Departmental appeals for an assessment year. In fact, the aforesaid position is not borne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the AO. FAQ - 27 states that in the event the declarant decides to settle the issues remanded by an appellate authority, the declarant is also required to settle the issues which are not set aside by the appellate authority and further provides that the disputed tax for the issues remanded to the AO will be the same amount if the addition was to be repeated by the AO. 40. FAQ-27 has no application in the instant case as the Petitioner had filed a declaration with respect to a deemed appeal of the Department arising from the order of the Tribunal dated 16th September, 2019 and there were no issues pending before the AO for consideration. 41. This Court is of the view that FAQ No. 11 deals with cases where in one appeal a qualifying and a non-qualifying issue arise for consideration. However, the case of the Petitioner does not fall under any clauses of the section 9, which defines non-qualifying tax arrears. Consequently, FAQ-11 has no applicability to the present case. 42. This Court is also of the view that FAQ-14 supports the case of the Petitioner as it allows the assessee to make a declaration for settlement of a dispute with respect to one order and does not req ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd, if any, in accordance with law within eight weeks. ----------------- Notes: 1. Sayad Mir Ujmuddin Khan v. Ziaulnisa Begum, (1879) ILR 3 Bom 422. 2. Gover's, Re, Coal Economising Gas Co., (1875) 1 Ch D 182, referred to in In re, Hindu Women's Right to Property Act, AIR 1941 PC 72 and Antico v. Health Fielding Aust. Pty. Ltd., (1997) 71 AL JR 1210. 3. Raghuraj Singh v. Hari Kishan, AIR 1944 PC 35, B. Shah v. Presiding Officer, Labour Court, AIR 1978 SC 12 : (1977) 4 SCC 384; Krishnayya v. Seshachalam, AIR 1965 SC 639: (1965) 1 SCR 195; Associated Cement Co. v. Their Workmen, AIR 1960 SC 56: (1960) 1 SCR 703; Dahya Lala v. Rasul Mohomed, AIR 1964 SC 1320: 1963 (3) SCR 1; Central Rly. Workshop, Jhansi v. Vishwanath, AIR 1970 SC 488: (1969) 3 SCC 95; Surendra Kumar Verma v. Central Government Industrial Tribunal-cum Labour Court, (1980) 4 SCC 443: AIR 1981 SC 422; B.P. Khemka Pvt. Ltd. v. Birendrakumar Bhomick, (1987) 2 SCC 407: AIR 1987 SC 1010; D. (a minor) v. Berkshire County Council, (1987) 1 All ER 20 (HL), U.P.Drugs Pharmaceuticals Co. Ltd. v. Ramanuj, (2003) 8 SCC 334: AIR 2003 SC 3337, Rajesh Burman v. Mitul Chatterjee, (2009) ..... X X X X Extracts X X X X X X X X Extracts X X X X
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