Maheshbhai Shantilal Patel v. The Principal Commissioner Of Income Tax, Central, Ahmedabad

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD R/SPECIAL CIVIL APPLICATION NO. 7441 of 2021 FOR APPROVAL AND SIGNATURE: HONOURABLE MS. JUSTICE SONIA GOKANI andHONOURABLE MR. JUSTICE RAJENDRA M. SAREEN ========================================================== 1Whether Reporters of Local Papers may be allowedto see the judgment ?to see the judgment ?2To be referred to the Reporter or not ?3Whether their Lordships wish to see the fair copyof the judgment ?3Whether their Lordships wish to see the fair copyof the judgment ?4Whether this case involves a substantial questionof law as to the interpretation of the Constitutionof India or any order made thereunder ?of law as to the interpretation of the Constitutionof India or any order made thereunder ? ========================================================== MAHESHBHAI SHANTILAL PATEL VersusTHE PRINCIPAL COMMISSIONER OF INCOME TAX, CENTRAL,AHMEDABAD ==========================================================Appearance: MR BANDISH SOPARKAR and MRS SWATI SOPARKAR(870) for the Petitioner(s) No. 1MR MR BHATT, SR.ADV with MRS MAUNA M BHATT(174) for the Respondent(s) No. 1,2 ========================================================== CORAM: HONOURABLE MS. JUSTICE SONIA GOKANIand HONOURABLE MR. JUSTICE RAJENDRA M. SAREEN Date : 23/09/2021CAV JUDGMENT (PER : HONOURABLE MS. JUSTICE SONIA GOKANI) 1 In this petition under Article 226 of the Constitution of India challenge is made to therejection of the declaration Forms No.1 and 2filed by respondent No.1 on 30.04.2021, by thepetitioner under the Direct Tax Vivad se VishwasAct, 2020 (“VsV Act” for short) and the DirectTax Vivad se Vishwas Rules, 2020 (“VsV Rules”for short), which has been contrary to the lawand violating the fundamental rights of thepetitioner. rejection of the declaration Forms No.1 and 2filed by respondent No.1 on 30.04.2021, by thepetitioner under the Direct Tax Vivad se VishwasAct, 2020 (“VsV Act” for short) and the DirectTax Vivad se Vishwas Rules, 2020 (“VsV Rules”for short), which has been contrary to the lawand violating the fundamental rights of thepetitioner. 2 The facts in a capsulized form are as follows: 2.1 Search action under section 132 of the IncomeTax Act was carried out at the residential andoffice premises of the assessee in the months ofSeptember and October, 1993. Pursuant to whichthe orders under section 132(5) of the IncomeTax Act was passed and the notice under section148 of the Act was issued for making theassessment of earlier years on 03.10.1995. Tax Act was carried out at the residential andoffice premises of the assessee in the months ofSeptember and October, 1993. Pursuant to whichthe orders under section 132(5) of the IncomeTax Act was passed and the notice under section148 of the Act was issued for making theassessment of earlier years on 03.10.1995. 2.2 Application was made before the SettlementCommissioner under section 245C(1), whichCommissioner under section 245C(1), which allowed the application of the petitioner initiallybut later under section 245D(4) dismissed theapplication for non-payment of additional taxes. but later under section 245D(4) dismissed theapplication for non-payment of additional taxes. 2.3 This was challenged before this Court in Special Civil Application No. 4939 of 2015 and the Court 2.2 Application was made before the SettlementCommissioner under section 245C(1), whichCommissioner under section 245C(1), which allowed the application of the petitioner initiallybut later under section 245D(4) dismissed theapplication for non-payment of additional taxes. but later under section 245D(4) dismissed theapplication for non-payment of additional taxes. 2.3 This was challenged before this Court in Special Civil Application No. 4939 of 2015 and the Court allowed the said petition and directed theSettlement Commissioner not to dismiss thisapplication on the said grounds. The proceedingsbefore the Settlement Commissioner weredismissed on 11.07.2017 and the Assessing Officerassumed the jurisdiction. The Assessing Officerpassed the assessment orders for AssessmentYear 1991-92 to 1994-95 on 09.07.2018. Settlement Commissioner not to dismiss thisapplication on the said grounds. The proceedingsbefore the Settlement Commissioner weredismissed on 11.07.2017 and the Assessing Officerassumed the jurisdiction. The Assessing Officerpassed the assessment orders for AssessmentYear 1991-92 to 1994-95 on 09.07.2018. 3 Challenging the said order, the petitionerpreferred the appeal before the Commissioner ofIncome Tax (Appeals) (“CIT (Appeals)” for short),which was allowed partly on 09.10.2019. preferred the appeal before the Commissioner ofIncome Tax (Appeals) (“CIT (Appeals)” for short),which was allowed partly on 09.10.2019. 4 A copy of the order was received on 18.10.2019and, therefore, the appeal was to be preferredbefore the Income Tax Appellate Tribunaland, therefore, the appeal was to be preferredbefore the Income Tax Appellate Tribunal 5 (“ITAT” for short). The appeal before the ITATwas required to be filed by 18.12.2019 within 60days. The petitioner, since was hospitalized,there was a delay in preferring the appeal. Pandemic due to Covid-19 virus had furtherdelayed the filing of the appeal, as according tothe petitioner, most of Courts and Tribunalsfunctioned only for urgent matters. The ApexCourt in suo motu writ petition (Civil) No.3 of2020 vide order dated 23.03.2020 and the ITA-Office order dated 30.03.2020 extended the timefor filing of the appeal. There was a completelockdown from 25.03.2020 and all officesremained functional only for urgent board andordinance dated 31.03.2020 called “ Taxation andother laws (Relaxation of Certain Provision)Ordinance, 2020” was promulgated providingthat any action or compliance, due date forwhich was falling between 20.03.2020 to29.06.2020 shall be extended to 30.06.2020 ordelayed the filing of the appeal, as according tothe petitioner, most of Courts and Tribunalsfunctioned only for urgent matters. The ApexCourt in suo motu writ petition (Civil) No.3 of2020 vide order dated 23.03.2020 and the ITA-Office order dated 30.03.2020 extended the timefor filing of the appeal. There was a completelockdown from 25.03.2020 and all officesremained functional only for urgent board andordinance dated 31.03.2020 called “ Taxation andother laws (Relaxation of Certain Provision)Ordinance, 2020” was promulgated providingthat any action or compliance, due date forwhich was falling between 20.03.2020 to29.06.2020 shall be extended to 30.06.2020 or any other date as may be further extended by the Central Government by way of Notification. 6 The Notification dated 24.03.2020 was issued bythe Government for extending the time limit forcertain compliance under the Income Tax Act. the Government for extending the time limit forcertain compliance under the Income Tax Act. 6.1 A Notification dated 29.06.2020 was also issued any other date as may be further extended by the Central Government by way of Notification. 6 The Notification dated 24.03.2020 was issued bythe Government for extending the time limit forcertain compliance under the Income Tax Act. the Government for extending the time limit forcertain compliance under the Income Tax Act. 6.1 A Notification dated 29.06.2020 was also issued subsequently by the Central Government andtime for filing the return of income forAssessment Year 2019-2020 also was extended. Abill called “the Taxation and other Laws/Relaxation of Certain Provision) Bill, 2020” wasintroduced in the Parliament, which receivedassent of President of India on 29.09.2020 andthe same became the Act. Thereby, theNotification was issued on 30.09.2020 and thetime limit for the filing of the return forAssessment Year 2019-2020 was extended as ageneral rule for all due dates, which were fallingunder the period of 20.03.2020 to 30.03.2020have been extended to 31.03.2021.time for filing the return of income forAssessment Year 2019-2020 also was extended. Abill called “the Taxation and other Laws/Relaxation of Certain Provision) Bill, 2020” wasintroduced in the Parliament, which receivedassent of President of India on 29.09.2020 andthe same became the Act. Thereby, theNotification was issued on 30.09.2020 and thetime limit for the filing of the return forAssessment Year 2019-2020 was extended as ageneral rule for all due dates, which were fallingunder the period of 20.03.2020 to 30.03.2020have been extended to 31.03.2021. 7 The petitioner is averred to have suffered fromParkinson’s disease since long and has undergonetreatment and hospitalization due to kidney andabdominal issues from August, 2019. He also hadbeen re-hospitalized and on a bed rest till March,Parkinson’s disease since long and has undergonetreatment and hospitalization due to kidney andabdominal issues from August, 2019. He also hadbeen re-hospitalized and on a bed rest till March, 2020 and later due to pandemic, he wasmedically advised not to move out being a seniormedically advised not to move out being a senior citizen with various co-morbidities. 8 The petitioner preferred an appeal on 14.12.2020 before the ITAT. The ITAT on condoning thedelay by a speaking order on 23.02.2021, allowedthe petitioner to argue the case on merits or toopt for VsV Scheme. delay by a speaking order on 23.02.2021, allowedthe petitioner to argue the case on merits or toopt for VsV Scheme. 9 The VsV Act was passed on 17.03.2020 to provide for resolution of disputed tax and for mattersconnected therewith or incidental thereto. Foroperational Act, the VsV Rules also came to beframed. connected therewith or incidental thereto. Foroperational Act, the VsV Rules also came to beframed. 10 The petitioner, since was desirous of takingrecourse of the provisions of the said Act, filedrecourse of the provisions of the said Act, filed Form No.1 and 2 as per section 4 of the VsV Act and Rule 3 of the VsV Rules on 13.02.2021 firstly.However, he revised the same by filing on23.02.2021. The ITAT had dismissed the appealof the petitioner as withdrawn to let thepetitioner take the benefit of the VsV Scheme vide order dated 25.02.2021. 10.1 The petitioner awaited the issuance of Form No.3 by respondent No.1. However, no response 10 The petitioner, since was desirous of takingrecourse of the provisions of the said Act, filedrecourse of the provisions of the said Act, filed Form No.1 and 2 as per section 4 of the VsV Act and Rule 3 of the VsV Rules on 13.02.2021 firstly.However, he revised the same by filing on23.02.2021. The ITAT had dismissed the appealof the petitioner as withdrawn to let thepetitioner take the benefit of the VsV Scheme vide order dated 25.02.2021. 10.1 The petitioner awaited the issuance of Form No.3 by respondent No.1. However, no response was received. He had, on several occasions,reminded the respondents for issuance of FormNo.3 but in vein. He has annexed fourcommunications of 24.02.2021, 26.02.2021,11.03.2021 and 18.03.2021. He also maderepresentations to the Chairman urging toconsider his genuine hardship, who was keen totake recourse to the VsV Scheme. reminded the respondents for issuance of FormNo.3 but in vein. He has annexed fourcommunications of 24.02.2021, 26.02.2021,11.03.2021 and 18.03.2021. He also maderepresentations to the Chairman urging toconsider his genuine hardship, who was keen totake recourse to the VsV Scheme. 10.2 The petitioner had also provided the details ofthe taxes paid for Assessment Year 1991-92, 1992-93, 1993-94 and 1994-95. The total taxes paid bythe taxes paid for Assessment Year 1991-92, 1992-93, 1993-94 and 1994-95. The total taxes paid by him also have been expressly pointed out, which is as under: 11 Meanwhile, respondent No.2 issued the notice for penalty proceedings under section 274 readwith section 271(1)(c) on 01.03.2021 for havingnot accepted the application of the petitioner.On Income Tax portal status of his VsVapplication showed as rejected on 30.03.2021.with section 271(1)(c) on 01.03.2021 for havingnot accepted the application of the petitioner.On Income Tax portal status of his VsVapplication showed as rejected on 30.03.2021. Aggrieved petitioner, therefore, is before thisCourt seeking following reliefs:Court seeking following reliefs: “7.The Petitioner, therefore, prays that thisHon’ble Court be pleased to issue a writ ofmandamus or a writ in the nature of mandamus ora writ of certiorari or a writ in the nature ofcertiorari or any other appropriate writ, directionor order and be pleased to:(a)quash and set aside the impugned rejection atAnnexure-’A’ to this Petition and direct theRespondent No.1 to accept the application of thePetitioner;(b)pending the admission, hearing and finalHon’ble Court be pleased to issue a writ ofmandamus or a writ in the nature of mandamus ora writ of certiorari or a writ in the nature ofcertiorari or any other appropriate writ, directionor order and be pleased to:(a)quash and set aside the impugned rejection atAnnexure-’A’ to this Petition and direct theRespondent No.1 to accept the application of thePetitioner;(b)pending the admission, hearing and final disposal of this petition, to stay implementationand operation of the penalty proceedings initiatedvide notice at Annexure-’H’ and stay furtherproceedings; (c)any other and further relief deemed just andproper be granted in the interest of justice;(d)to provide for the cost of this petition.” 12 This Court (Coram: Ms. Bela M. Trivedi, as Her Ladyship then was, A.C. Joshi, JJ ), vide order dated 14.06.2021, passed the following order:- disposal of this petition, to stay implementationand operation of the penalty proceedings initiatedvide notice at Annexure-’H’ and stay furtherproceedings; (c)any other and further relief deemed just andproper be granted in the interest of justice;(d)to provide for the cost of this petition.” 12 This Court (Coram: Ms. Bela M. Trivedi, as Her Ladyship then was, A.C. Joshi, JJ ), vide order dated 14.06.2021, passed the following order:- “Learned advocate Mr. Bandish Soparkarappearing for the petitioner states that thepetitioner was not intimated in writing about theoutcome of the forms filed by the petitioner underSection 4 of the Direct Tax Vivad Se Vishwas Actand the Rule 3 of Direct Tax Vivad Se VishwasRules on 13.02.2021, and it was only on 26-27.02.2021, he was intimated orally that the saidforms / applications were not accepted as notfound valid. Thereafter, the petitioner filed forms /applications on 27.02.2021, the outcome of whichalso was not intimated to the petitioner, and thepetitioner came to know about the rejection of thesaid forms / applications only on 30.04.2021, whenhe Page 1 of 2 Downloaded on : Thu Sep 23 14:53:15IST 2021 C/SCA/7441/2021 ORDER DATED:14/06/2021 verified from the tax portal about thestatus of his applications, which showed “Rejected”In view of the above submission, issue Notice tothe respondents returnable on 21.06.2021. Directservice today is permitted.” 13 In response to the said notice, the respondents appeared and filed affidavit-in-reply of the Principal Commissioner of Income-Tax (Central) Ahmedabad having each and every avermentmade in this petition. According to therespondent, section 4(6)B of the VsV Act providesthat declaration filed shall be presumed never tohave been made, if the declarant violates any ofthe conditions referred to in the Act. Thepetitioner since was found not eligible to availthe benefit, his applications were rejected. Thereis no flaw in the decision making process andrejection is in accordance with law. 14 The respondent has also provided the relevant dates necessary for adjudication at paragraph No.4, which is as under : 15 It is further contended that section 21(a) of the Act defines for the appellant to be present inwhose case, the appeal has been filed by beforethe appellate forum and such appeal is pendingas on the specified date. The specified date isdefined under section 2(n) of the Act, which is31.01.2020. The Central Board of Direct Taxes( “the CBDT” for short) under its circular dated04.12.2020 relaxed certain conditions owing toCovid-19 pandemic and the relevant FAQ no.59also is forming part of the reply. It is contendedthat only those appeals with application forcondonation of delay filed before 04.12.2020 andadmitted before the date of filing the declarationwould be deemed as pending as on 31.01.2020.According to the respondents, in the presentcase, the appeal with application for condonationof delay came to be filed on 14.12.2020 and,therefore, the appeal cannot be deemed to bepending as on 31.01.2020 or extended date of04.12.2020, which is a condition precedent for availing the benefit under the Act. availing the benefit under the Act. 16 In parawise replies, justification is given forrejection of applications/declaration of FormNos.1 and 2. According to the respondent, in caseof Amina Abdulaziz Mastan, the CIT(Appeals)had accepted the application and issued FormNo.3. In that case, the order of CIT (Appeals) wasreceived on 14.12.2020 and, thereafter, the appealcame to be filed on 31.12.2020. Therefore, in thispeculiar set of facts, her application was acceptedand Form No.3 was issued, whereas in the instantcase, order dated 09.10.2019 of CIT (Appeals) wasreceived by the petitioner on 18.10.2019 andappeal with an application for condonation ofdelay came to be filed only on 14.12.2020, whichwas required to be filed on or before 04.12.2020as per the relaxation granted by CBDT and,therefore, the appeal cannot be deemed to bepending on 31.01.2020. rejection of applications/declaration of FormNos.1 and 2. According to the respondent, in caseof Amina Abdulaziz Mastan, the CIT(Appeals)had accepted the application and issued FormNo.3. In that case, the order of CIT (Appeals) wasreceived on 14.12.2020 and, thereafter, the appealcame to be filed on 31.12.2020. Therefore, in thispeculiar set of facts, her application was acceptedand Form No.3 was issued, whereas in the instantcase, order dated 09.10.2019 of CIT (Appeals) wasreceived by the petitioner on 18.10.2019 andappeal with an application for condonation ofdelay came to be filed only on 14.12.2020, whichwas required to be filed on or before 04.12.2020as per the relaxation granted by CBDT and,therefore, the appeal cannot be deemed to bepending on 31.01.2020. 17 It is further the say of the respondent that the petitioner’s application under the VsV Act wasuploaded in Forms No.1 and 2 through ITBA/E-Filing portal on 27.02.2021 in the Office ofPrincipal Commissioner of Income Tax (Central)and it was immediately undertaken andprocessed. After careful consideration and inlight of the Circular dated 04.12.2020, the statusof application was intimated on 30.04.2021through E-Filing portal. There was norequirement of passing a speaking order whilerejecting the application. uploaded in Forms No.1 and 2 through ITBA/E-Filing portal on 27.02.2021 in the Office ofPrincipal Commissioner of Income Tax (Central)and it was immediately undertaken andprocessed. After careful consideration and inlight of the Circular dated 04.12.2020, the statusof application was intimated on 30.04.2021through E-Filing portal. There was norequirement of passing a speaking order whilerejecting the application. 18 Affidavit-in-Rejoinder is filed urging that theBoard circular is construed in a restrictivemanner, which would run contrary to thescheme of the Act of 2020 and powers exercisedby Board under sections 10 and 11 to issuedirections or orders in public interest or toremove difficulties. Board circular is construed in a restrictivemanner, which would run contrary to thescheme of the Act of 2020 and powers exercisedby Board under sections 10 and 11 to issuedirections or orders in public interest or toremove difficulties. 19 According to the petitioner, after an appeal isfiled with an application for condonation offiled with an application for condonation of 18 Affidavit-in-Rejoinder is filed urging that theBoard circular is construed in a restrictivemanner, which would run contrary to thescheme of the Act of 2020 and powers exercisedby Board under sections 10 and 11 to issuedirections or orders in public interest or toremove difficulties. Board circular is construed in a restrictivemanner, which would run contrary to thescheme of the Act of 2020 and powers exercisedby Board under sections 10 and 11 to issuedirections or orders in public interest or toremove difficulties. 19 According to the petitioner, after an appeal isfiled with an application for condonation offiled with an application for condonation of delay after 04.12.2020 and if the same isadmitted by the appellate authority before thedate of filing of the declarant, the benefit is to beextended as otherwise it would lead to creationof a separate class of persons among thedeclarants without any reasonable basis, resultingin discrimination and thereby violating Articles14 of the Constitution of India. admitted by the appellate authority before thedate of filing of the declarant, the benefit is to beextended as otherwise it would lead to creationof a separate class of persons among thedeclarants without any reasonable basis, resultingin discrimination and thereby violating Articles14 of the Constitution of India. 20 After completion of pleadings, learned counselon both the sides have been extensively heard,who have, in support of their respectivepleadings argued at length. Mr. BandishSoparkar, learned advocate for the petitioner,also relied upon the decision of the High CourtBoddu Ramesh vs.on both the sides have been extensively heard,who have, in support of their respectivepleadings argued at length. Mr. BandishSoparkar, learned advocate for the petitioner,also relied upon the decision of the High CourtBoddu Ramesh vs.of Telengana PrincipalCommissioner of Income-Tax,Hyderabad,[2021] 128 taxmann.com 13 (TELANGANA)andthe decision of the Delhi High Court in the caseof Sunder Sethi vs.Shyam PrincipalCommissioner of Income-Tax,Hyderabad,[2021] 128 taxmann.com 13 (TELANGANA)andthe decision of the Delhi High Court in the caseof Sunder Sethi vs.Shyam PrincipalCommissioner of Income-Tax and others, W.P. (C) 2291/2021 and CM APPL.6677/2021. 21 At the outset, law on the subject, shall need to beregarded. The short question that needs to beaddressed by this Court is as to whether thepetitioner would fall within the definition of an“appellant” as given under the VsV Act andwhether his appeal can be said to have beened date aregarded. The short question that needs to beaddressed by this Court is as to whether thepetitioner would fall within the definition of an“appellant” as given under the VsV Act andwhether his appeal can be said to have beened date apending on the specifs provided underthe said Act.the said Act. 22 The VsV Act is enacted to provide for resolution of disputed tax and for matters connectedtherewith and incidental thereto. As is apparent,the Act has been brought to bring a aboutamicable and final solution to the direct taxlitigation pending over the years with an intentto collect the tax and by waiving the penalty andthe interest. This could be initiated at the level ofthe assessee or the department and this shortlycould be said to be a legislation for the largerinterest of all stakeholders. The intent of the billtherewith and incidental thereto. As is apparent,the Act has been brought to bring a aboutamicable and final solution to the direct taxlitigation pending over the years with an intentto collect the tax and by waiving the penalty andthe interest. This could be initiated at the level ofthe assessee or the department and this shortlycould be said to be a legislation for the largerinterest of all stakeholders. The intent of the bill is to reduce the tax disputes considering the notable pendency of the direct tax cases. 23 The provision of VsV Act shall need to be regarded for comprehending the issue, which is presented before this Court. 23.1 In this context, section 2 of the VsV Act requires reproduction, at this stage: “(1) In this Act, unless the context otherwise requires,-- (a) "appellant" means-- (i) a person in whose case an appeal or a writ petitionor special leave petition has been filed either by himor by the income-tax authority or by both, before anappellate forum and such appeal or petition ispending as on the specified date; (ii) a person in whose case an order has been passedby the Assessing Officer, or an order has been passedby the Commissioner (Appeals) or the Income TaxAppellate Tribunal in an appeal, or by the High Courtin a writ petition, on or before the specified date, andthe time for filing any appeal or special leave petitionagainst such order by that person has not expired ason that date; (iii) a person who has filed his objections before the Dispute Resolution Panel under section 144C of theIncome-tax Act, 1961 (43 of 1961) and the DisputeResolution Panel has not issued any direction on orbefore the specified date; (iv) a person in whose case the Dispute Resolution Panel has issued direction under sub-section (5) ofsection 144C of the Income-tax Act and the AssessingOfficer has not passed any order under sub-section(13) of that section on or before the specified date; (v) a person who has filed an application for revision under section 264 of the Income-tax Act and suchapplication is pending as on the specified date;; 1[Explanation.-For the removal of doubts, it is herebyclarified that the expression appellant shall notinclude and shall be deemed never to have beenincluded a person in whose case a writ petition orspecial leave petition or any other proceeding hasbeen filed either by him or by the income-taxauthority or by both before an appellate forum,arising out of an order of the Settlement Commissionunder Chapter XIX-A of the Income-tax Act, and suchpetition or appeal is either pending or is disposed of.](b) "appellate forum" means the Supreme Court orthe High Court or the Income Tax Appellate Tribunalor the Commissioner (Appeals); (c) "declarant" means a person who files declarationunder section 4; (d) "declaration" means the declaration filed under section 4; (e) "designated authority" means an officer not below the rank of a Commissioner of Income-tax notifiedby the Principal Chief Commissioner for thepurposes of this Act; xxx xxx xxx (k) "Income-tax Act" means the Income-tax Act, 1961(43 of 1961); (l) "last date" means such date as may be notified by the Central Government in the Official Gazette; (m) "prescribed" means prescribed by rules madeunder this Act; (n) "specified date" means the 31st day of January,2020;” 23.2 Section 2(a)(i) defines the appellant. Section 2(1)(3) defines designated authority and section2(1)(n) speaks of a specified date, which means 31[st] day of January, 2020. 23.3 It is clear that the person in whose case an appeal or writ petition or special leave petition has beenfiled either by himself or by Income-TaxAuthority or by both before the appellate forumand such appeal or petition when is pending as onthe specified date, he is to be construed as anappellant for the purpose of the said provision. filed either by himself or by Income-TaxAuthority or by both before the appellate forumand such appeal or petition when is pending as onthe specified date, he is to be construed as anappellant for the purpose of the said provision. 23.2 Section 2(a)(i) defines the appellant. Section 2(1)(3) defines designated authority and section2(1)(n) speaks of a specified date, which means 31[st] day of January, 2020. 23.3 It is clear that the person in whose case an appeal or writ petition or special leave petition has beenfiled either by himself or by Income-TaxAuthority or by both before the appellate forumand such appeal or petition when is pending as onthe specified date, he is to be construed as anappellant for the purpose of the said provision. filed either by himself or by Income-TaxAuthority or by both before the appellate forumand such appeal or petition when is pending as onthe specified date, he is to be construed as anappellant for the purpose of the said provision. 23.4 It further defines that a person in whose case anorder has been passed by the Assessing Officer orby the Commissioner (Appeals) or the ITAT or bythe High Court in a writ petition, on or before aspecified date and the time as for filing of appealor Special Leave Petition against such order bythat person has not expired as on the specifieddate, he also is an appellant within the definitiongiven in the said Act. order has been passed by the Assessing Officer orby the Commissioner (Appeals) or the ITAT or bythe High Court in a writ petition, on or before aspecified date and the time as for filing of appealor Special Leave Petition against such order bythat person has not expired as on the specifieddate, he also is an appellant within the definitiongiven in the said Act. 23.5 It is, thus, amply clear from this provision that ason the specified date i.e. on 31.01.2020, there shallneed to be pendency of appeal of an appellant,on the specified date i.e. on 31.01.2020, there shallneed to be pendency of appeal of an appellant, 24 25 which could be the appeal preferred by himself orby the revenue or by both before the appellateforum. In the case of Boddu Ramesh(supra), the HighCourt of Telangana was dealing with an assesseepetitioner, who had filed appeal on 19.02.2019under section 246A before the Commissioner(Appeals) against the order of Assessing Officerand the same was dismissed. Assailing the order,the appeal was filed before the Tribunal alongwith an application to condone the delay inpreferring the appeal. The Tribunal condoned thedelay on 15.02.2021 and allowed the appeal andremanded the matter back by restoring the matterback to the Commissioner of Appeals.Court of Telangana was dealing with an assesseepetitioner, who had filed appeal on 19.02.2019under section 246A before the Commissioner(Appeals) against the order of Assessing Officerand the same was dismissed. Assailing the order,the appeal was filed before the Tribunal alongwith an application to condone the delay inpreferring the appeal. The Tribunal condoned thedelay on 15.02.2021 and allowed the appeal andremanded the matter back by restoring the matterback to the Commissioner of Appeals. Applicant before the Telangana High Court hadsubmitted the application to avail the benefitunder the said scheme in a prescribed format, butthe application was rejected by the designatedauthority on the ground that there was no appealsubmitted the application to avail the benefitunder the said scheme in a prescribed format, butthe application was rejected by the designatedauthority on the ground that there was no appeal 25.1 pending as on specified date i.e. on 31.02.2020and the declaration, according to the department,was invalid. The petitioner re-submitted thedeclaration/application under the Act in FormNos.1 and 2 on 31.03.2021 opting to settle thedispute pending re-adjudication before theCommissioner (Appeals). However, that was againrejected by the designated authority and in thesescircumstances, the Telangana High Court held infavour of the assessee, interpreting the provisionsof the Act. 25.1 pending as on specified date i.e. on 31.02.2020and the declaration, according to the department,was invalid. The petitioner re-submitted thedeclaration/application under the Act in FormNos.1 and 2 on 31.03.2021 opting to settle thedispute pending re-adjudication before theCommissioner (Appeals). However, that was againrejected by the designated authority and in thesescircumstances, the Telangana High Court held infavour of the assessee, interpreting the provisionsof the Act. Some of the relevant paragraphs are reproduce as under: “19. Before adverting to the respective contentionsurged by the learned counsel, it is necessary tonote the intent and purpose for which the Act of2020 was enacted by the Parliament. Thestatement of objects and reasons appended to theAct of 2020 would throw light on this aspect, whichreads as under: “Over the years pendency ofappeals filed by taxpayers as well as Governmenthas increased due to the fact that the number ofappeals that are filed is much higher than thenumber of appeals that are disposed. As a result, ahuge amount of disputed tax arrears is locked-upin these appeals. As on 30th November, 2019, theamount of disputed direct tax arrears is Rs.9.32lakh crores. Considering that the actual direct tax collection in the financial year 2018-19 was Rs.11.3lakh crores, the disputed tax arrears constitutenearly one year direct tax collection. 2. Taxdisputes consume copious amount of time, energyand resources both on the part of the Governmentas well as taxpayers. More over, they also deprivethe Government of the timely collection ofrevenue. Therefore, there is an urgent need toprovide for resolution of pending tax disputes.This will not only benefit the Government bygenerating timely revenue but also the taxpayerswho will be able to deploy the time, energy andresources saved by opting for such disputeresolution towards their business activities. 3. It is,therefore, proposed to introduce direct tax VivadSe Vishwas Bill, 2020 for dispute resolution relatedto direct taxes, which, inter alia, provides for thefollowing, namely :-- (a) the provisions of the Billshall be applicable to appeals filed by taxpayers orthe Government, which are pending with theCommissioner (Appeals), Income Tax AppellateTribunal, High Court or Supreme Court as on 31stJanuary, 2020 irrespective of whether demand insuch cases is pending or has been paid; 10W.P.No.12038 of 2021 (b) the pending appeal maybe against disputed tax, interest or penalty inrelation to an assessment or re-assessment order oragainst disputed interest, disputed fees where thereis no disputed tax. Further, the appeal may also beagainst the tax determined on defaults in respect oftax deducted at source or tax collected at source; (c)in appeals related to disputed tax, the declarantshall only pay the whole of the disputed tax, if thepayment is made before 31st day of March, 2020and for the payments made after 31st day ofMarch, 2020, but on or before a date notified bythe Central Government, the amount payable shallbe increased by 10% of the disputed tax; (d) inappeals related to disputed penalty, disputedinterest, or disputed fee, the amount payable bythe declarant shall be 25 per cent of the disputedpenalty, disputed interest or disputed fee, as thecase may be, if the payment is made on or before 31st day of March, 2020. If the payment is madeafter 31st day of March, 2020, but on or before thedate notified by the Central Government, theamount payable shall be increased to 30% of thedisputed penalty, disputed interest, or disputed fee,as the case may be. 4. The proposed Bill shall comeinto force on the date it receives the assent of thePresident and declaration may be made thereafterup to the date to be notified by the Government.” 31st day of March, 2020. If the payment is madeafter 31st day of March, 2020, but on or before thedate notified by the Central Government, theamount payable shall be increased to 30% of thedisputed penalty, disputed interest, or disputed fee,as the case may be. 4. The proposed Bill shall comeinto force on the date it receives the assent of thePresident and declaration may be made thereafterup to the date to be notified by the Government.” 20. A reading of the statement of objects andreasons would indicate that the intent and purportbehind the introduction of the Vivad Se VishwasBill, 2020 (Act of 2020) was i) to reduce taxdisputes pertaining to direct taxes, ii) thestaggering disputed direct tax arrears, nearly asequal to nations one year direct tax collections ofthe year 2018-19. This was the cause of concernwhich was sought to be addressed by theGovernment with the introduction of the said Bill,which later, on receiving the assent of thePresident of India had become the Act of 2020w.e.f. 17.03.2020. 11 W.P.No.12038 of 2021. 21. Further, the intent of the Presenter of the Bill,i.e., the Hon’ble Finance Minister, was to reducetax litigations, as there is a huge pendency of directtax cases before various appellate forums. The taxpayer in whose cases the appeals are pendingbefore various forums can make use of the schemeand benefit, as he is required to pay only theamount of disputed taxes and would get completewaiver of interest and penalty. The relevantportion of the Budget Speech of the Hon’bleFinance Minister made on 1st February 2020,while placing the Bill before the Parliament, readsas under: “Sir, in the past our Government hastaken several measures to reduce tax litigations. Inthe last budget, Sub Ka Vishwas scheme wasbrought in to reduce litigation in indirect taxes. Itresulted in settling over 1,89,000 cases. Currently,there are 4,83,000 direct tax cases pending invarious appellate forums, i.e., Commissioner (Appeals), ITAT, High Court and Supreme Court.This year, I propose to bring a scheme similar tothe indirect tax, Sub Ka Vishwas for reducinglitigations even in the direct taxes. Under theproposed Vivad Se Vishwas scheme, a taxpayerwould be required to pay only the amount ofdisputed taxes and will get complete waiver ofinterest and penalty provided he pays, by 31stMarch, 2020. Those who avail the scheme after31st March 2020, will have to pay some additionalamount. The scheme will remain open till 30thJune 2020. Taxpayers in whose cases appeals arepending at any level can benefit from this scheme.I hope the taxpayers will make use of thisopportunity to get relief from vexatious litigationprocess.” 22. From a reading of the objects and reasons asappended to the Bill and the speech of the Moverof the Bill, it would be clear that the pendency oflitigation in relation to direct taxes before variousforums was considered as a vexatious litigationprocess. Further, it would also be clear that theGovernment intended to free up the revenueswhich were 12 W.P.No.12038 of 2021 blocked onaccount of the tax disputes pending considerationin appeals before various forums. 23. It is trite law that the speech of Mover of Bill isvery relevant for interpreting a new law, as held bythe Supreme Court in K.P.VARGHESE V/s.INCOME TAX OFFICER, ERNAKULAM1 . 24. Thus, it would be safe to conclude that thescheme was intended to give a quietus to hugepending direct tax litigation either at the behest ofthe assessee or by the Department and collect onlythe disputed taxes by granting waiver of penaltyand interest. If the above object is taken intoconsideration, the Act of 2020, as enacted, wouldhave to be considered as a beneficial piece oflegislation.” 26 The Court also interpreted Question No.59 and took note of filing of the appeal with application for condonation of delay and admission of the 23. It is trite law that the speech of Mover of Bill isvery relevant for interpreting a new law, as held bythe Supreme Court in K.P.VARGHESE V/s.INCOME TAX OFFICER, ERNAKULAM1 . 24. Thus, it would be safe to conclude that thescheme was intended to give a quietus to hugepending direct tax litigation either at the behest ofthe assessee or by the Department and collect onlythe disputed taxes by granting waiver of penaltyand interest. If the above object is taken intoconsideration, the Act of 2020, as enacted, wouldhave to be considered as a beneficial piece oflegislation.” 26 The Court also interpreted Question No.59 and took note of filing of the appeal with application for condonation of delay and admission of the appeal by the appellate authority to hold thus: “36. If Board circular is construed in such arestrictive manner, as is contended by respondents,the same would run contrary to the scheme of theAct of 2020 and the powers exercised by Boardunder Section 10 and 11 to issue directions ororders in public interest or to remove difficulties. 37. Therefore, we are unable to persuade ourselvesto confine the benefit of “deemed pendency ofappeal” only if an application for condonation isfiled on or before 04.12.2020, as in our view nosignificance can be attached to the said date ofissue of the circular, since, what is required to beconsidered is the pendency of the appeal with an 15W.P.No.12038 of 2021 application for condonationand the admission of the appeal as on the date offiling of declaration. 38. Thus, in our view, even after 04.12.2020, if anappeal is filed with an application for condonationof delay and the appeal is admitted by theappellate authority before the date of filing of thedeclaration, the benefit is to be extended, asotherwise, it would lead to creation of separateclass of persons among the declarants, without anyreasonable basis, resulting in discriminationthereby violating Article 14 of the Constitution ofIndia. 39. In the present case, the petitioner having filedan appeal before Tribunal along with anapplication for condonation and the Tribunal,having heard the matter on 05.02.2021 bycondoning the delay, it is to be construed as ‘pending’ appeal as on the date of filing ofdeclaration on 08.02.2021. As a matter of fact, theTribunal by order dt.15.02.2021, allowed the appealof the petitioner remitted the matter back byrestoring the appeal on the file of CIT, for freshadjudication. 39. In the present case, the petitioner having filedan appeal before Tribunal along with anapplication for condonation and the Tribunal,having heard the matter on 05.02.2021 bycondoning the delay, it is to be construed as ‘pending’ appeal as on the date of filing ofdeclaration on 08.02.2021. As a matter of fact, theTribunal by order dt.15.02.2021, allowed the appealof the petitioner remitted the matter back byrestoring the appeal on the file of CIT, for freshadjudication. 40. The natural corollary of the Tribunal acceptingthe application for condonation is to the effect thatthe appeal before the Tribunal as having been filedin time, since, such condonation would relate backto the date by which time, the appeal against theorder of CIT ought to have been filed by thepetitioner. Once it is considered that the appealbefore the Tribunal is deemed as having been filedin time, the same would have to be construed ashaving been filed before the “specified date”, andthus, an appeal can be stated to be pending beforethe appellate forum and the petitioner would haveto be considered as an ‘appellant’ as defined inSection 2(1)(a)(i) of the Act of 2020, and the tax asassessed would have to be considered as ‘disputedtax’, as defined under Section 2(1)(j)(B) of the Act of2020. 16 W.P.No.12038 of 2021 41. Alternatively, itis to be noted that since, the last date for filingdeclaration had been extended up to 31.03.2021and the Tribunal, having found cogent reasons tocondone the delay and allowing the appeal filed bythe petitioner and remitting the matter back to theCIT by its order dt.15.02.2021, would automaticallyrevive and restore the appeal, which was dismissedby the CIT by his order dt.18.09.2019. Thus, byorder of the Tribunal dt.15.02.2021, the appeal ofthe petitioner before of the CIT filed on 19.02.2019would stand revived, and such restoring of appealrelates back the original date of filing, which iswithin the “specified date” as per Act of 2020.” 27 The Delhi High Court in the case of Shyam Sunder Sethi(supra) was addressing the very C/SCA/7441/2021 CAV JUDGMENT DATED: 23/09/2021 issue of eligibility of the petitioner as theAppellant on the specified date under the VsVAct where a