Vivad Se Vishwas Act Does Not Stipulate That Appeal Should Be Admitted Before Cut-Off Date; It Only Adverts To Its Pendency: Delhi High Court
The Delhi High Court has held that benefits under the Direct Tax Vivad Se Vishwas Act, 2020 may be availed by an assessee whose tax dispute is 'pending' before any appellate forum as on January 31, 2020. A Division Bench comprising of Justices Rajiv Shakdher and Talwant Singh has made it clear that it is not necessary that such appeal has been 'admitted' by the Appellate...
The Delhi High Court has held that benefits under the Direct Tax Vivad Se Vishwas Act, 2020 may be availed by an assessee whose tax dispute is 'pending' before any appellate forum as on January 31, 2020.
A Division Bench comprising of Justices Rajiv Shakdher and Talwant Singh has made it clear that it is not necessary that such appeal has been 'admitted' by the Appellate forum.
It held,
"An appeal would be "pending" in the context of Section 2 (1) (a) of the 2020 Act when it is first filed till its disposal. Section 2(1)(a) of the 2020 Act does not stipulate that the appeal should be admitted before the specified date, it only adverts to its pendency."
The Vivad Se Vishwas Act was introduced to resolve the pending disputes concerning income-tax payable by the assessees.
Section 2(1)(a)(i) of the Act states— a person in whose case an appeal or a writ petition or special leave petition has been filed either by him or by the income-tax authority or by both, before an appellate forum and such appeal or petition is pending as on the specified date (31st day of January, 2020) may avail benefits under the Act.
In the instant case, the Petitioner's application under the Act was rejected on the ground that his appeal before the CIT, against rejection of exemption under Section 54 of the Income Tax Act, was not admitted.
It may be noted that the Petitioner had filed an appeal before the CIT along with an application for condonation of delay.
During pendency of the above appeal and application, the Vivad Se Vishwas Act was notified, following which the Petitioner took requisite steps under the 2020 Act to resolve his pending disputes with the revenue and to avail the benefits available thereunder.
However, in January 2021, the Petitioner's request for processing of forms filed under the 2020 Act was rejected, without assigning any reasons thereof.
In the instant writ proceedings, Jr. Standing Counsel Shailendera Singh submitted that the limitation for preferring an appeal before CIT in the Petitioner's case had expired on February 2, 2019, whereas the appeal had been filed on July 11, 2019. Therefore, the Petitioner could not have preferred the appeal and thus, it could not be said that his appeal was pending for the purpose of Vivad Se Vishawas Act.
He submitted that if the limitation for filing the appeal expires during the period April 1, 2019 and January 31, 2020 (both dates included) and the application for condonation is filed before the date of issuance of the said clarification, the appeal can be construed as pending on the specified date i.e. January 31, 2020, only if it is "admitted" by the appellate authority before the filing of the declaration under the 2020 Act.
Findings
At the outset, the Bench opined that the Respondent-authority seems to have wrongly equated admission of the appeal with pendency.
It noted that the Petitioner had filed the appeal with application for condonation of delay on July 11, 2019, that is, well before the specified date (January 1, 2020). It observed,
"We were not referred to any provision under the 2020 Act, which provided that limitation qua the subject appeal should be expired within the period spread out between 01.04.2019 and 31.01.2020 (both dates included) and it ought to have been admitted for it to be considered as "pending" under the 2020 Act," it added.
The Bench opined that since the appeal included a plea of condonation of delay, therefore, the appeal could not have been admitted unless the delay was condoned. However, that by itself does not efface the fact that the appeal was pending.
"In our view, as noted above, the appeal would be pending as soon as it is filed and up until such time it is adjudicated upon and a decision is taken qua the same," the Division bench ruled.
It referred to Prem's Judicial Dictionary, Vol. III 196 which prescribes that a legal proceeding is pending as soon as commenced and until it is concluded i.e., so long as the Court having original cognizance of it can make an order on the matters in issue, or to be dealt with, therein.
The plea was disposed with directions to the Respondent authority to process the forms filed by the Petitioner under the 2020 Act.
Advocates Sumit Lalchandani, Soumya Singh and Ananya Kapoor appeared for Petitioners.
Sr. Standing Counsel Vibhooti Malhotra and Jr. Standing Counsel Shailendera Singh for Respondents.
Case Title: Shyam Sunder Sethi v. Pr. Commissioner of Income Tax & Ors.
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