[Direct Tax Vivaad Se Vishwas Act] Review Plea Against SLP Constitutes "Disputed Tax" U/S 2(i)(j): Delhi High Court
The Delhi High Court has held that a review petition, against the orders passed in SLP by the Supreme Court, is “Disputed Tax” under Section 2(1)(j) of the Direct Tax Vivad Se Vishwas Act, 2020 and the review petitioner would be eligible to take benefit of “Vivad Se Vishwas Scheme”. Section 2(1)(j) defines disputed tax in relation to Appeal, Writ Petition or Special Leave...
The Delhi High Court has held that a review petition, against the orders passed in SLP by the Supreme Court, is “Disputed Tax” under Section 2(1)(j) of the Direct Tax Vivad Se Vishwas Act, 2020 and the review petitioner would be eligible to take benefit of “Vivad Se Vishwas Scheme”.
Section 2(1)(j) defines disputed tax in relation to Appeal, Writ Petition or Special Leave Petition pending as on the specified date, in this case January 31, 2020.
The Petitioner herein sought benefit of the scheme, stating that its review petition before the Supreme Court against disputed tax was pending on the specified date.
The Income Tax Department had however dismissed its application to avail the scheme, stating that review petition is not covered under Section 2(1)(j).
The division bench of Justices Yashwant Varma and Ravinder Dudeja took note of a Clarification issued by the Central Board of Direct Taxes, stipulating that pendency of arbitration proceedings and miscellaneous applications in certain cases, as on cutoff date would meet the requirement of Section 2(1)(j), even though no Appeal, Writ Petition or Special Leave Petition may be pending in any Appellate Forum in terms of Section 2(1)(j).
It thus held that the Department had itself “mellowed down” the strict interpretation of Section 2(j) by including pending arbitrationproceedings and miscellaneous applications under the Scheme.
“There is no reason why the pendency of the review petition after the dismissal of the Special Leave Petition should not get covered under “Vivad Se Vishwas Scheme”. The review petition will also partake the character of pending proceedings and therefore the petitioner should not have been non-suited or treated as ineligible for claiming benefit under DTVSV Act,” it held.
The bench also highlighted that the intent of DTVSV Act is to reduce direct tax disputes and at the same time, generate revenue by collecting disputed taxes by granting waiver of penalty and interest.
It said,
“DTVSV Act is a beneficial legislation enacted with a definite purpose for the benefit of both the assessee and the department whereby the legislature has provided a mechanism under which pending income tax litigation is sought to be reduced as also ensuring that the revenue is generated in a timely manner for the Government. The DTVSV Act, in a sense, provides for a deviation from the strict application of tax laws towards achieving this purpose. If the provision in Section 2(j) and the Board Circular is to be construed in a restrictive manner as is contended by learned counsel for the respondent, the same will run contrary to the scheme of the Act of 2020.”
Accordingly, the petition was allowed and the Department was directed to process petitioner's application in accordance with DTVSV Act, 2020.
Appearance: Sr. Advocate Akhil Sibal with Advocates Ranjana Roy Gawai, Vasudha Sen, Vineet Wadhwa, Deboshree Mukherjee and Krishnesh Bapat for Petitioner; SSC Indruj Singh Rai with JSCs Sanjeev Menon, Rahul Singh and Advocate Anmol Jagga for Department
Case title: NRA Iron And Steel Pvt Ltd v. Income Tax Department & Ors.
Citation: 2024 LiveLaw (Del) 1286
Case no.: W.P.(C) 3537/2021