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TMI Blog2025 (1) TMI 509X X X X Extracts X X X X X X X X Extracts X X X X ..... the Petitioner to belatedly amend the Appeal Memo and challenge the addition. While giving the Petitioner benefits of the DTVSV Scheme, the Respondents correctly refused to consider this belated attempt to amend the Appeal Memo, claiming that even Rs. 2,02,50,919/- constituted a disputed tax . Such approbation and reprobation were quite correctly not appreciated by the Respondents. The Respondents' approach is consistent with the DTVSV Act and the CBDT circular dated 04 December 2020. DTVSV Act aims to settle tax disputes pending in Courts and other adjudicatory authorities as of the specified date. The petitioner attempted to post facto and belatedly expand the scope of the dispute to include amounts that the Petitioner had explicitly conceded as liable to additions. The Petitioner never appealed such additions and restricted its appeal only to the addition of Rs. 9,11,037/- under Section 69C of the Income Tax Act. The Petitioner also paid the tax on the added amount of Rs. 2,02,50,919/- towards LTCG. By such a belated expansion of the disputes, the object of the DTVSV Act or the amnesty schemes cannot be frustrated. The remedies under Articles 226 and 227 of the Constitution ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Competent Authority to the Petitioner within 30 (thirty) days from today, along with all consequential benefits. Claim for including addition u/s 68 for benefits under the DTVSV Act/Scheme is rejected. However, the Petitioner s contention about determining the amount payable at the rate of 100% of the disputed tax for the Assessment Year 2014-15 is allowed, and the Respondents are directed to issue the revised Form-3 as undertaken by them in their Affidavit within 30 (thirty) days from today along with all consequential benefits. - M.S. SONAK JITENDRA JAIN, JJ. For the Petitioner: Mr K. Gopal and Ms. Neha Paranjape,. For Respondent Nos. 1 to 3: Mr Siddharth Chandrashekhar,. JUDGMENT (PER M. S. SONAK, J.) 1. Heard learned counsel for the parties. 2. Rule. The rule is made returnable immediately at the request of and with the consent of learned counsel for the parties. 3. The Petitioner seeks the following substantive reliefs in this Petition:- a. That this Hon'ble Court may be pleased to issue under Article 226 of the Constitution of India an appropriate direction order or a writ including a writ in the nature of 'Certiorari' to call for the records and verify the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 435 ITR 220 (Bombay) , in support of this contention. 5. Mr. Gopal submitted that the non-consideration of the additional grounds raised by the Petitioner in the Appeals instituted before the specified date was illegal and arbitrary. He submitted that attempts were made to raise these grounds before 31 January 2020, but this was not possible because of transitional issues and software glitches. He submitted that on 04 December 2020, the Petitioner did raise additional grounds challenging the addition of Rs. 2,02,50,919/- on account of Long-Term Capital Gains ( LTCG ) under Section 68 of the Income Tax Act, 1961. However, the Respondents have not considered these grounds for determining the disputed tax under the Direct Tax Vivad Se Vishwas Act, 2020 ( DTVSV Act ). 6. Mr. Gopal submitted that the Respondents have also failed to consider and apply CBDT Circular No.21 of 2020, dated 04 December 2020, which specifies that additional grounds must be considered when computing disputed tax. He submitted that the CBDT Circulars are binding upon the Respondents, and their non-consideration or non-application is illegal and arbitrary. 7. Mr. Gopal submitted that the reliefs claimed in this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessment, the first Respondent, relying upon the information received from the Investigation wing, doubted the genuineness of the LTCG deduction. Accordingly, the petitioner was granted an opportunity to show cause and clear such doubts. 15. On 25 November 2016, the Petitioner tried to contend that the claim under Section 10 (38) was genuine and supportable by documents. However, to buy peace and avoid litigation, the Petitioner voluntarily offered this LTCG amount of Rs. 2,02,50,919/- to tax under Section 68 of the Income Tax Act. In the concluding paragraph of the communication dated 25 November 2016, the Petitioner pleaded against initiating any penalty proceedings under Section 271 (1) (c) of the Income Tax Act. 16. The penultimate and ultimate paragraphs of the Petitioner s communication dated 25 November 2016 are transcribed below for the convenience of reference: - Voluntarily Offering the LTCG to Tax Your assessee believes that the entire transaction as elucidated herein above was carried out in good faith and for value. The bonafides of the transaction have been clearly brought out in the above explanation as regards the LTCG on sale of 46250 shares of Sunrise Asian Li ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6. 19. On 27 January 2017, the Petitioner appealed the Assessment Order dated 26 December 2016 only to the extent of disallowance of Rs. 9,11,037/- under Section 69C of the Income Tax Act. However, the Petitioner did not appeal the addition of Rs. 2,02,50,919/- towards LTCG. This was obviously because the Petitioner had conceded and agreed that this amount was liable to be added to the total income and that the Petitioner was not claiming any deduction under Section 10 (38) of the Income Tax Act. This is evident from the perusal of the Appeal Memo at Exhibit-D (Pages 45 to 50 of the paper book of this Petition). The Petitioner even paid the tax on this added amount without any demur. 20. As indicated in the Assessment Order dated 26 December 2016, penalty proceedings were separately initiated against the Petitioner. On 29 June 2017, the Income Tax Officer passed an order under Section 271 (1) (c) of the Income Tax Act levying a concealment penalty of Rs. 72,07,774/ on the additions towards LTCG and commission. 21. The Petitioner, aggrieved by the penalty order dated 29 June 2017, instituted an Appeal on 01 August 2017. However, this appeal was only restricted to challenging the pen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 17, the Petitioner only challenged the penalty of Rs. 72,07,774/- on both the additions ordered in the Assessment Order dated 26 December 2016. As of the specified date, i.e. 31 January 2020, there was no challenge to adding Rs. 2,02,50,919/- towards LTCG. This was because the addition was based on Petitioner s concession and acknowledgement. 26. The CBDT issued Circular No.21 of 2020 on 04 December 2020. This circular contains certain Frequently Asked Questions ( FAQs ) in the context of implementing the DTVSV Act. The Petitioner relies on the Answer to FAQ 77. Therefore, FAQ 77 and the answer to the same are transcribed below for the convenience of reference: - Question No. 77 Whether any additional ground filed in relation to an appeal is to be considered while computing disputed tax? Answer If any additional ground has been filed on or before January 31, 2020, it shall be considered for the purpose of computing disputed tax. 27. Significantly, on 04 December 2020 itself, the Petitioner, vide the document at Exhibit-G (pages 63 to 66 of the paper book of this Petition), attempted to raise additional ground in the pending Appeal to belatedly challenge the addition of Rs. 2,02,50, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... some case of plea bargaining (assuming such plea bargaining is permissible) or that the concession or acknowledgement was based on the premise that no penalty could be levied upon the Petitioner. 31. In any event, the Assessment Order dated 26 December 2016 explicitly referred to the initiation of penalty proceedings under Section 271 (1) (c) of the Income Tax Act regarding the addition of Rs. 2,02,50,919/- and the disallowance of Rs. 9,11,037/-. Therefore, at that stage, nothing prevented the Petitioner from appealing the addition of Rs. 2,02,50,919/- in the Appeal instituted on 27 January 2017 to challenge the addition of Rs. 9,11,037/- under Section 69C of the Income Tax Act. Also, nothing prevented the Petitioner from amending the Appeal Memo for the lengthy period between 27 January 2017 and 31 January 2020. 32. By simply and vaguely alleging transitional issues or software glitches, the Petitioner cannot gloss over its apparent attempt to belatedly amend its appeal and see if any additional benefits could be availed under the DTVSV Act or Scheme. As noted earlier, the Petitioner appealed the penalty order dated 29 June 2017, levying a penalty on both additions. However, even ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eal lodged on 27 January 2017. By attempting to amend the appeal memo belatedly and after the specified date, this amount of Rs. 2,02,50,919/- towards LTCG cannot be considered the disputed tax amount. If this is permitted, the Petitioner, by such a subterfuge or by creating an artificial dispute, will claim a refund of the tax paid without demur or claim concessions even with respect to undisputed taxes already paid. 36. Accordingly, for all the above reasons, we are satisfied that the Respondents did not act illegally or arbitrarily in not considering the additional grounds concerning the addition of Rs. 2,02,50,919/ in determining the amount payable under the DTVSV Act. Therefore, the challenge on this count is liable to be rejected and is hereby rejected. 37. However, the Petitioner is on firm ground in contending that the Petitioner s case was not a search case , or that it was a non-search case , and therefore, the computation at the rate of 125% as also FAQ 70 of Circular dated 04 December 2020 could be adopted. The record shows, and in fact, it was conceded by the Respondents, that the Petitioner s case was a non-search case . Therefore, the computation could not be at the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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