Mufg Bank Ltd v. Commissioner Ofincome Tax 2 & Anr

$~ *IN THE HIGH COURT OF DELHI AT NEW DELHI +W.P.(C) 3973/2021 MUFG BANK LTD ..... PetitionerThrough :Mr. Percy Pardiwalla, Senior Advocate alongwithMr.NikhilRanjanandMr.HitenChande, Advocates. versus COMMISSIONER OFINCOME TAX 2 & ANR. ..... RespondentsThrough :Mr. Zoheb Hossain, Senior Standing Counselfor Revenue along with Mr.Vipul AggarwalandMr.ParthSemwal,JuniorStandingCounsel for Revenue. % Reserved On: 20[th]October, 2022Date of Decision : 25[th]November, 2022 CORAM:HON'BLE MR. JUSTICE MANMOHANHON'BLE MS. JUSTICE MANMEET PRITAM SINGH ARORA J U D G M E N T MANMOHAN, J: PRIMARY ISSUE 1.The primary issue that arises for consideration in the present case is whetheran assessee is free to settle any appeal under the Direct Tax Vivad se Vishwas Act,2020 (“DTVSV Act”) and is not required to settle all the pending appeals filed bythe respondents-revenue for an assessment year. RELEVANT FACTS 2.The relevant facts of the present case are that the Petitioner is a bankingcompany incorporated under the laws of Japan and carries on the banking businessin India through branches in various cities. The return of income filed by thepetitioner was selected for scrutiny assessment and a final assessment order dated29[th]October, 2010 under Section 143 read with Section 144C of the Income TaxAct, 1961 (for short ‘Act’) was passed by the Assessing Officer for the AssessmentYear 2007-08 making various adjustments to the total income of the Petitioner. 3.The Petitioner challenged the assessment order by filing an appeal before theTribunal which was disposed of vide order dated 19[th]September, 2014 deciding thevarious issues as under: a. Salary to expatriate employees – allowed in favour of petitioner-assessee. b. Deferred Guarantee Commission – allowed in favour of petitioner-assessee. c. Interest received by HO/overseas branches – allowed in favour ofpetitioner-assessee.petitioner-assessee. d. Deduction for interest paid to HO/overseas branches – allowed in favour ofpetitioner-assessee.petitioner-assessee. e. Interest received from HO/overseas branches – decided against thepetitioner-assessee.petitioner-assessee. f. Applicability of Section 115JB to foreign banks – allowed in favour ofpetitioner-assessee.petitioner-assessee. g. Taxability of ECB Interest – remanded back. h. Rate of tax – decided against the petitioner-assessee 4.The Petitioner challenged the order of the Tribunal on issues (e), (g) & (h)above and the Respondent-Department challenged the order of the Tribunal onissues (a), (b), (c), (d), (f) & (g) above by filing an appeal before this Court. By an Signature Not Verified Page 2 of 22 order dated 13[th]March, 2015 the appeal of the Petitioner was admitted by this Courton issues (e) & (h) and the remand by the Tribunal on issue (g) was modified. And,by an order dated 08[th]April, 2016, the appeal of the Respondent-Department onissues (a), (b), (c), (d), (f) & (g) was dismissed by this Court. 5.On 28[th]July, 2016, the Assessing Officer passed an assessment order in theremand proceeding holding that the ECB interest earned by the Petitioner is taxableunder the Act and levied interest under Section 234B and 234D of the Act. ThePetitioner challenged the assessment order dated 28[th]July, 2016 by filing an appealbefore the Tribunal. 6.On 01[st]December, 2017, the Supreme Court issued notice in the SpecialLeave Petition (“SLP”) filed by the Respondent-Department wherein the order ofthis Court dated 08[th]April, 2016, dismissing the Respondent-Department’s appeal,was challenged on issues (a) & (f). 7.On 16[th]September, 2019, the Tribunal passed an order allowing the appeal ofthe Petitioner against the order dated 28[th]July, 2016 passed in remand proceedingand deleted the addition made by the Assessing Officer on account of ECB interestand levy of interest under Section 234D of the Act. 6.On 01[st]December, 2017, the Supreme Court issued notice in the SpecialLeave Petition (“SLP”) filed by the Respondent-Department wherein the order ofthis Court dated 08[th]April, 2016, dismissing the Respondent-Department’s appeal,was challenged on issues (a) & (f). 7.On 16[th]September, 2019, the Tribunal passed an order allowing the appeal ofthe Petitioner against the order dated 28[th]July, 2016 passed in remand proceedingand deleted the addition made by the Assessing Officer on account of ECB interestand levy of interest under Section 234D of the Act. 8.On 17[th]March, 2020, the DTVSV Act was passed by the Parliament whichallowed the assessees to settle any dispute pending before the Tribunal, High Court,Supreme Court or before any authorities under the Act. 9.On 08[th]December, 2020, the Petitioner filed an application under DTVSVAct to settle the deemed appeal of the Department against the order of the Tribunaldated 16[th]September, 2019. 10.On 14[th]December, 2020, the Respondent-Department issued a show-causenotice proposing to reject the application filed by the Petitioner as the Petitioner wasnot settling the Respondent-Department’s SLP pending in the Supreme Court for the same assessment year. On 16[th]December, 2020, the Petitioner filed its response andsubmitted that there is no compulsion to settle the dispute pending in the SupremeCourt for Assessment Year 2007-08 as under the DTVSV Act, an applicant couldsettle one of various litigations that was pending with an appellate authority and itwas not necessary to settle all the appeals for a particular assessment year. 11.On 29[th]January, 2021, the application was rejected by the Respondent-Department on the ground that the Petitioner is settling part of the appeal and oughtto have also settled the Respondent-Department’s SLP pending in the SupremeCourt for the same assessment year. In this regard, the Respondents relied on FAQNos.7, 11, 14 and 36 issued by the CBDT vide Circular No.7/2020 dated 22[nd]April,2020 which are reproduced hereinbelow:- “Question No. 7.If assessment has been set aside for giving proper opportunity toan assessee on the additions carried out by the AO. Can he availthe Vivad se Vishwas with respect to such additions?an assessee on the additions carried out by the AO. Can he availthe Vivad se Vishwas with respect to such additions?Answer:If an appellate authority has set aside an order (except whereassessment is cancelled with a direction that assessment is to beframed de novo) to the file of the AO for giving properopportunity or to carry out fresh examination of the issue withspecific direction, the assessee would be eligible to avail Vivadse Vishwas. However, the appellant shall also be required tosettle other issues, if any, which have not been set aside in thatassessment and in respect of which either appeal is pending ortime to file appeal has not expired. In such a case disputed taxshall be the tax Ryour attle At a Ticcluding surcharge and cess)which would have been payable had the addition in respect ofwhich the order was set aside by the appellate authority was tobe repeated by the AO.assessment is cancelled with a direction that assessment is to beframed de novo) to the file of the AO for giving properopportunity or to carry out fresh examination of the issue withspecific direction, the assessee would be eligible to avail Vivadse Vishwas. However, the appellant shall also be required tosettle other issues, if any, which have not been set aside in thatassessment and in respect of which either appeal is pending ortime to file appeal has not expired. In such a case disputed taxshall be the tax Ryour attle At a Ticcluding surcharge and cess)which would have been payable had the addition in respect ofwhich the order was set aside by the appellate authority was tobe repeated by the AO. In such cases while filling the declaration form, appellant canindicate that with respect to the set-aside issues the appeal ispending with the Commissioner (Appeals).indicate that with respect to the set-aside issues the appeal ispending with the Commissioner (Appeals). xxxxxxxxxxxx Signature Not Verified Question No.11 In case where disputed tax contains qualifying tax arrears asalso non-qualifying tax arrears (such as, tax arrears relating toassessment made in respect of undisclosed foreign income):also non-qualifying tax arrears (such as, tax arrears relating toassessment 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 canexclude/ignore non-qualifying tax arrears?(ii)If eligible, whether quantification of disputed tax canexclude/ignore non-qualifying tax arrears? Answer:If the tax arrears include tax on issues that are excluded fromthe Vivad se Vishwas, such cases are not eligible to filedeclaration under Vivad se Vishwas. There is no provision underVivad se Vishwas to settle part of a pending dispute in relation toan appeal or writ or SLP for an assessment year. For onepending appeal, all the issues are required to be settled and ifany one of the issues makes the declaration invalid, nodeclaration can be filed.the Vivad se Vishwas, such cases are not eligible to filedeclaration under Vivad se Vishwas. There is no provision underVivad se Vishwas to settle part of a pending dispute in relation toan appeal or writ or SLP for an assessment year. For onepending appeal, all the issues are required to be settled and ifany one of the issues makes the declaration invalid, nodeclaration can be filed. xxxxxxxxxxxx Question No.14. Whether assessee can avail of the Vivad se Vishwas for someof the issues and not accept other issues?of the issues and not accept other issues? Answer:Refer to answer to question no 11. Picking and choosing issuesfor settlement of an appeal is not allowed With respect to oneorder, the appellant must chose to settle all issues and then onlyhe would be eligible to file declaration.”for settlement of an appeal is not allowed With respect to oneorder, the appellant must chose to settle all issues and then onlyhe would be eligible to file declaration.” 12.Accordingly, the present writ petitions were filed by the Petitionerchallenging the aforesaid rejection of the application filed under DTVSV Act videorder dated 29[th]January, 2021. ARGUMENTS ON BEHALF OF THE PETITIONER 13.Learned senior counsel for the Petitioner submitted that the DTVSV Acttreats an appeal and an SLP for the same assessment year as a separate dispute forthe purpose of settlement under the Act. He stated that this position is evident fromthe provisions of Section 2(1)(j) read with Section 2(1)(a) of DTVSV Act, which consider each appeal as a separate dispute for the purpose of computing disputed taxunder the Act. He pointed out that the definition of “dispute” under Rule – 2(b) ofthe Direct Tax Vivad se Vishwas Rules, 2020 (for short ‘DTVSV Rules’) considersan appeal or an SLP as a separate dispute for the purpose of Rules 9, 10 and 11 inrelation to computation of disputed tax in certain situations. He also emphasised thatSections 3 and 4 of the DTVSV Act allows an assessee to file a declaration for anyappeal or an SLP which is pending before an appellate authority and does notrequire the assessee to file a declaration for all the appeals pending for anassessment year and after the settlement of the dispute, only such appeal is to bewithdrawn for which the application was made by an assessee. In support of hiscontention, he relied on Circular No.9/2020 dated 22[nd]April, 2020 issued by CBDT.The relevant portion of the said Sections, Rules and Circular referred to hereinaboveare reproduced hereinbelow:- “2. Definitions.-(1) In this Act, unless the context otherwise requires,- “2. Definitions.-(1) In this Act, unless the context otherwise requires,- (j)“disputed tax” in relation to an assessmentyear or financialyear, as the case may be, means, the income-tax, including surcharge andcess (hereafter in this clause referred to as the amount of tax) payable bythe appellant under the provisions of the Income-tax Act, 1961 (43 of1961), as computed hereunder:- xxxxxxxxx (o)“tax arrear” means,-(i)the aggregate amount of disputed tax, interest chargeable orcharged on such disputed tax and penalty leviable or levied on suchdisputed tax; or (ii)disputed interest; or (iii)disputed penalty; or(iv)disputed fee, as determined under the provisions of the Income-tax Act; 3.Amount payable by declarant.—Subject to the provisions of thisAct, where a declarant files [under the provisions of this Act on or beforesuch date as may be notified], a declaration to the designated authority inaccordance with the provisions of section 4 in respect of tax arrear, then,notwithstanding anything contained in the Income-tax Act or any otherlaw for the time being in force, the amount payable by the declarant underthis Act shall be as under, namely:-- Signature Not Verified Rules 2.Definitions,--In these rules, unless the context otherwise requires,-xxxxxxxxxxxxxxxxxx (b)“dispute” means appeal, writ or special leave petition filed orappeal or special leave petition to be filed by the declarant or the income-tax authority before the Appellate forum, or arbitration, conciliation ormediation initiated or given notice thereof, or objections filed or to befiled before the Dispute Resolution Panel under section 144C of theIncome-tax Act, or application filed under section 264 of the Income-taxAct; FAQ No.36 Question No. 36. In a case ITAT has passed order giving relief on twoissues and confirming three issues. Time to file appeal has not expired ason specified date. The taxpayer wishes to file declaration for the threeissues which have gone against him. What about the other two issues asthe taxpayer is not sure if the department will file appeal or not? Answer: The Vivad se Vishwas allow declaration to be filed even whentime to file appeal has not expired considering them to be a deemedappeal. Vivad se Vishwas also envisages option to assessee to filedeclaration for only his appeal or declaration for department appeal ordeclaration for both. Thus, in a given situation the appellant has a choice,he can only settle his deemed appeal on three issues, or he can settledepartment deemed appeal on two issues or he can settle both. If hedecides to settle only his deemed appeal, then department would be free tofile appeal on the two issues (where the assessee has got relief) as per theextant procedure laid down and directions issued by the CBDT. FAQ No.40 Question No.40. Where there are two appeals filed for an assessment year– one by the appellant and one by the tax department, whether theappellant can opt for only one appeal? If yes, how would the disputed taxbe computed? Answer: The appellant has an option to opt to settle appeal filed by it orappeal filed by the department or both. Declaration form is to be filedassessment year wise i.e. only one declaration for one assessment year.For different assessment years separate declarations have to be filed. Sothe appellant needs to specify in the declaration form whether he wants tosettle his appeal, or department's appeal in his case or both for aparticular assessment year. The computation of tax payable would becarried out accordingly. The Circular No.9/2020 issued by the CBDT is binding on the Departmentand the Department is not empowered to detract from the beneficialcircular issued by the CBDT. In this regard, reliance is placed on thejudgment 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).” The Circular No.9/2020 issued by the CBDT is binding on the Departmentand the Department is not empowered to detract from the beneficialcircular issued by the CBDT. In this regard, reliance is placed on thejudgment 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 oftaxability of ECB interest and levy of interest under Section 234D of the Act, whichis a subject matter of the deemed appeal of the Respondent-Department, was arisingfrom the fresh assessment proceeding carried out pursuant to the order of theTribunal dated 19[th]September, 2014 and, therefore, was a separate proceeding fromthe original assessment proceeding carried out by the Respondent-Department.Consequently, according to him, the contention of the Respondent-Department thatthe Petitioner was required to settle the Departmental appeals in both theproceedings is incorrect and without any basis. In support of his submission, heplaced reliance on the Judgments of this Court in Nokia India (P.) Ltd. vs. DeputyCommissioner of Income-tax, [2018] 407 ITR 20 (Delhi), JCB India Ltd. vs.Deputy Commissioner of Income-tax, [2017] 398 ITR 189(Delhi) and Judgmentsof other High Courts in Kooka Sidhwa & Co. vs. Commissioner of Income-tax,[1964] 54 ITR 54 (Calcutta), Caltex Oil Refining (India) Ltd. vs. Commissioner ofIncome-tax, [1993] 202 ITR 375 (Bombay), Dimension Data Asia Pacific PTE Ltd. vs. Deputy Commissioner of Income-tax, [2018] 96 taxmann.com 182(Bombay). ARGUMENTS ON BEHALF OF THE RESPONDENTS 15.Per contra, Mr. Zoheb Hossain, learned counsel for the respondents-revenuestated that the DTVSV Act treats one assessment year as a whole and therefore ifissues arise out of one assessment year, then the assessee is required to settle allsuch issues relating to such assessment year which cannot be dissected at the choiceof the assessee. He submitted that the unit for settlement of dispute under theDTVSV Act is an assessment year and not an appeal or writ petition or a specialleave petition. He emphasised that the submissions of the Department were basedon the jurisdictional requirement of Section 2(j) of the DTVSV Act that there mustbe disputed tax qua an assessment year and not qua the issues relating to anassessment year. 16.He submitted that in terms of FAQ 11 of the Circular No. 9 of 2020, anassessee cannot settle part of a pending dispute for a single assessment year. Further,according to him FAQ 14 of Circular 9 of 2020 stipulated that the Petitioner mustsettle all the issues arising out of an assessment and picking and choosing of issueswas impermissible. The only exception was that when one appeal is filed by theassessee and other by the revenue, the assessee can settle his appeal/deemed appealor departments’ appeal/deemed appeal, in terms of FAQ 36 and 40 of the aforesaidCircular. 17.He submitted that when the matter was at the stage when first order of ITATwas passed, the assessee could have settled the issues with respect to which thematter was remanded back, provided he settled the other issues with respect towhich the appeal or deemed appeal (Assessee’s or Revenue’s) was pending. According to him it was inconceivable that when some issues were pending beforethe file of the Assessing Officer and some were before an appellate body, theassessee was required to settle all issues; however after passing of the freshassessment order, when some issues are before one appellate body and some beforeanother, the assessee could choose to settle only one set of issues. 17.He submitted that when the matter was at the stage when first order of ITATwas passed, the assessee could have settled the issues with respect to which thematter was remanded back, provided he settled the other issues with respect towhich the appeal or deemed appeal (Assessee’s or Revenue’s) was pending. According to him it was inconceivable that when some issues were pending beforethe file of the Assessing Officer and some were before an appellate body, theassessee was required to settle all issues; however after passing of the freshassessment order, when some issues are before one appellate body and some beforeanother, the assessee could choose to settle only one set of issues. 18.Mr. Zoheb Hossain, learned counsel for the respondents-revenue, furthersubmitted that even assuming without admitting that there is any ambiguity in thescheme of the DTVSV Act, the law being meant for amnesty must be construedstrictly and any interpretation must lean in favour of the Revenue. In support of hissubmission he placed reliance on the judgment of the Supreme Court inCommissioner of Customs (Import), Mumbai vs. Dilip Kumar & Company andOrs. (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 ofproving applicability would be on the assessee to show that his casecomes within the parameters of the exemption clause or exemptionnotification. 66.2 When there is ambiguity in exemption notification which is subjectto strict interpretation, the benefit of such ambiguity cannot be claimedby the subject/assessee and it must be interpreted in favour of theRevenue.” 19.He contended that in the present case, the Petitioner had only chosen to settlepart of the issues pending for the Assessment Year 2007-08 and was therefore noteligible to settle its case under the DTVSV Act. He emphasised that the Petitionerfor the same Assessment Year i.e. 2007-08, had sought to settle the Revenue’sdeemed appeal before this Court and had not sought settlement of the Revenue’spending SLP before the Supreme Court. Therefore, according to him, thedeclaration filed by the petitioner had been rightly rejected. 20.Mr. Zoheb Hossain, learned counsel for the respondents-revenue, stated thatthe reliance placed by the Petitioner upon FAQ 19 was misplaced, as the samemerely gave an option to the assessee in a specific situation wherein two assessmentorders are passed, one under Section 143(3) of the Act and the other under Section147/143(3).He pointed out that in the present batch of matters, the appeals pendingat different forums originated from the same first assessment order dated 29[th]October, 2010 that was subsequently set aside by the ITAT vide order dated 19[th]September, 2014. 21.He further submitted that FAQ 36, provided for deemed appeals, and allowsan assessee to seek settlement of either his appeal or the department’s appeal orboth, when actual appeals may not have been filed. 22.He also submitted that FAQ 40 applied to cases where one appeal was filedby revenue and another by the assessee. He stated that the same was not applicableto the present case where both the pending appeals had been filed by the revenue. REJOINDER ARGUMENTS 23.In rejoinder, learned senior counsel for the Petitioner submitted that theinterpretation of the Department that the assessee was required to settle all theDepartmental appeals for an assessment year was wholly incorrect and notsupported by any provision of the DTVSV Act. He stated that the absurdity of theinterpretation sought to be placed by the Respondent on the DTVSV Act wasevident from the fact that the Respondents did not have any grievance with thePetitioner not settling its own appeal pending before this Court for the A.Y. 2007-08but, nevertheless, required the Petitioner to settle all the Departmental appealspending for A.Y. 2007-08. According to him, the interpretation placed by theRespondents on the provisions of the Act was without any basis and wholly REJOINDER ARGUMENTS 23.In rejoinder, learned senior counsel for the Petitioner submitted that theinterpretation of the Department that the assessee was required to settle all theDepartmental appeals for an assessment year was wholly incorrect and notsupported by any provision of the DTVSV Act. He stated that the absurdity of theinterpretation sought to be placed by the Respondent on the DTVSV Act wasevident from the fact that the Respondents did not have any grievance with thePetitioner not settling its own appeal pending before this Court for the A.Y. 2007-08but, nevertheless, required the Petitioner to settle all the Departmental appealspending for A.Y. 2007-08. According to him, the interpretation placed by theRespondents 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 andDTVSV Rules treated each appeal as a separate appeal and gave an option to theassessee to settle any appeal under the provisions of the DTVSV Act. He stated thatthe contention of the Petitioner was further supported by the Circular No.9/2020dated 22[nd]April, 2020 FAQ No.19, 36, & 40, which clarified that an assessee had anoption to settle the appeal arising from the same order and for the same assessmentyear. Therefore, he emphasised that the interpretation placed by the Department wascontrary to intention of the legislature which was evident from the plain language ofthe law. 24.Learned senior counsel for the Petitioner further submitted that FAQ No.7 ofthe Circular was applicable when the assessment order was to be passed by theAssessing Officer and an application was filed by the assessee under the DTVSVAct. He stated that in the instant case, FAQ No.7 was not applicable as theapplication was filed by the Petitioner in respect of the deemed appeal of theDepartment arising from the order dated 16[th]September, 2019 passed by theTribunal. 25.He also stated that FAQ No.11 of the Circular was applicable when the taxarrears includes non-qualifying tax arrears on issues specified under section 9 of theDTVSV Act. He emphasised that, in the instant case, the application filed by thePetitioner did not include tax arrears on any of the issues specified under section 9of the DTVSV Act. He further submitted that FAQ No.14 of the Circular stated thatan assessee was not allowed to pick and choose issues for settlement of an appealand is required to settle all the issues with respect to one order. In the instant case,the application filed by the Petitioner covered all the issues arising from the order ofthe Tribunal dated 16[th]September, 2019. Therefore, according to him, the relianceplaced by the Department on the aforesaid FAQs was incorrect and bad in law. Page 13 of 22 COURT’S REASONING RULE OF INTERPRETATION TO BE APPLIED 26.Having heard learned counsel for the parties, this Court is of the view that theprimary question that needs to be answered is what is the rule of interpretation thatthe Court must apply while interpreting the DTVSV Act. 27.Every modern legislation is actuated with some policy. While the intent oftaxing statutes is to collect taxes, the intent of amnesty acts like VoluntaryDisclosure of Income Scheme (for short ‘VDI Scheme’) is to provide an opportunityto the assesses to declare their undisclosed income on fulfilling certain terms andconditions. There are also legislations which are directed to cure some mischief andbring into effect some type of reform by improving the system or by relaxing therigour of the law or by ameliorating the condition of certain class of persons whoaccording to present-day notions may not have been treated fairly in the past. Suchwelfare, beneficent or social justice oriented legislation are also known as Remedialstatutes. 27.Every modern legislation is actuated with some policy. While the intent oftaxing statutes is to collect taxes, the intent of amnesty acts like VoluntaryDisclosure of Income Scheme (for short ‘VDI Scheme’) is to provide an opportunityto the assesses to declare their undisclosed income on fulfilling certain terms andconditions. There are also legislations which are directed to cure some mischief andbring into effect some type of reform by improving the system or by relaxing therigour of the law or by ameliorating the condition of certain class of persons whoaccording to present-day notions may not have been treated fairly in the past. Suchwelfare, beneficent or social justice oriented legislation are also known as Remedialstatutes. 28.It is settled law that any ambiguity in a taxing statute enures to the benefit ofthe assessee, but any ambiguity in the amnesty act or exemption clause in anexemption notification has to be construed in favour of the revenue andamnesty/exemption has to be given only to those assesses who demonstrate that theysatisfy all the conditions precedent for availing the amnesty/exemption.[See:Commissioner of Customs (Import), Mumbai vs. Dilip Kumar & Company andOrs (supra)]. 29.For determining whether the DTVSV Act is a taxing statute or an amnesty actor a beneficial/remedial act, one has to examine what is the objective and intentbehind enacting the statute. The relevant portion of the statement of objects andreasons of the DTVSV Act reads as under:- “….Over the years, the pendency of appeals filed by taxpayers aswell as Government has increased due to the fact that the number ofappeals that are filed is much higher than the number of appeals that aredisposed. As a result, a huge amount of disputed tax arrears is locked-upin these appeals. As on the 30th November, 2019, the amount of disputeddirect tax arrears is Rs. 9.32 lakh crores. Considering that the actualdirect tax collection in the financial year 2018-19 was Rs.11.37 lakhcrores, the disputed tax arrears constitute nearly one year direct taxcollection. 2. Tax disputes consume copious amount of time, energy andresources both on the part of the Government as well as taxpayers.Moreover, they also deprive the Government of the timely collection ofrevenue. Therefore, there is an urgent need to provide for resolution ofpending tax disputes. This will not only benefit the Government bygenerating timely revenue but also the taxpayers who will be able todeploy the time, energy and resources saved by opting for such disputeresolution towards their business activities…” (emphasis supplied) 30.The Finance Minister of the Union of India in her Budget Speech 2020-2021outlined the objective of DTVSV Act as under:- “…Under the proposed 'Vivad Se Vishwas' scheme, a taxpayer wouldbe required to pay only the amount of the disputed taxes and will getcomplete waiver of interest and penalty provided he pays by 31st March,2020. Those who avail this scheme after 31st March, 2020 will have topay some additional amount. The scheme will remain open till 30thJune, 2020..... I hope that taxpayers will make use of this opportunity”to get relief from vexatious litigation process… Fromtheaforesaid,itisapparentthatDTVSVAct,2020isabeneficial/remedial piece of legislation enacted by the Parliament to reducependency of cases, generate timely revenue for the government and providecertainty and savings of resources that would be spent on the long drawn litigationprocess. It is a statute which provides benefit as it recovers the taxes for theDepartment upfront without having to wait to succeed in the litigation which itself is Fromtheaforesaid,itisapparentthatDTVSVAct,2020isabeneficial/remedial piece of legislation enacted by the Parliament to reducependency of cases, generate timely revenue for the government and providecertainty and savings of resources that would be spent on the long drawn litigationprocess. It is a statute which provides benefit as it recovers the taxes for theDepartment 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 thelitigation and the assessee is relieved of payment of interest and penalty if the samewere to imposed. The DTVSV Act also benefits the society as it reduces litigation,acrimony, decongests the Courts and relieves the system of unnecessary burden.Consequently, this Court is of the view that DTVSV Act is neither a taxing statutenor an amnesty act. It is a remedial/beneficial statute.31.In construing a remedial/beneficial statute, it has been held that the Courtsought to give to it “the widest operation” which its language will permit. The Courtshave only to see that the particular case is within the mischief to be remedied andfalls within the language of the enactment[1].” The words of such a statute must be soconstrued as “to give the most complete remedy which the phraseology willpermit,”[2]so as “to secure that the relief contemplated by the statute shall not bedenied to the class intended to be relieved.[3]Consequently, the appropriateprinciples of interpretation to be applied having regard to the entire conspectus offacts are the principles of purposive and liberal interpretation. THEJUDGMENTOFDILIPKUMAR(SUPRA)WHICHDEALSWITHINTERPRETATION OF EXEMPTION NOTIFICATION, HAS NO APPLICATION. 32.The judgment of the Supreme Court in Commissioner of Customs vs. DilipKumar & Co. (supra) is clearly inapplicable to the facts of the present case. In thecase of the Dilip Kumar (supra), the assessee imported a consignment of VitaminE50 Powder (feed grade) and claimed the benefit of concessional duty at 5% instead 1 Sayad Mir Ujmuddin Khan v. Ziaulnisa Begum, (1879) ILR 3 Bom 422. 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 andAntico v. Health Fielding Aust. Pty. Ltd., (1997) 71 AL JR 1210. 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 andAntico v. Health Fielding Aust. Pty. Ltd., (1997) 71 AL JR 1210. 1 Sayad Mir Ujmuddin Khan v. Ziaulnisa Begum, (1879) ILR 3 Bom 422. 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 andAntico v. Health Fielding Aust. Pty. Ltd., (1997) 71 AL JR 1210. 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 andAntico 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; Krishnayyav. Seshachalam, AIR 1965 SC 639: (1965) 1 SCR 195; Associated Cement Co. v. Their Workmen, AIR 1960 SC 56: (1960) 1 SCR 703; DahyaLala 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) 1 SCC 398paras 25 and 31 & Edukanti Kistamma v. So. Venkatareddy, (2010) 1 SCC 756:AIR 2010 SC 313. Raghuraj Singh v. Hari Kishan, AIR 1944 PC 35, B. Shah v. Presiding Officer, Labour Court, AIR 1978 SC 12 : (1977) 4 SCC 384; Krishnayyav. Seshachalam, AIR 1965 SC 639: (1965) 1 SCR 195; Associated Cement Co. v. Their Workmen, AIR 1960 SC 56: (1960) 1 SCR 703; DahyaLala 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) 1 SCC 398paras 25 and 31 & Edukanti Kistamma v. So. Venkatareddy, (2010) 1 SCC 756:AIR 2010 SC 313. of standard 30% which was leviable. According to the assessee, the goods wereclassifiable under Chapter 2309.90 "prawn feed" in terms of Notification No. 20 of1999. The benefit of the notification was denied to the assessee on the ground thatthe goods imported by the assessee contained chemical ingredient for animal feedand not animal feed/ prawn feed as such. Therefore, the question before theSupreme Court was whether the assessee who is seeking exemption from taxationunder the provisions of the Act is covered by the said exemption notification. It wasin this context that the Supreme Court held that the exemption notification isrequired to be construed strictly and any ambiguity in the exemption notificationmust enure to the benefit of the revenue. As already held hereinabove, the DTVSVAct is neither an amnesty act nor an exemption scheme as it does not provide forany exemption or benefit solely to the taxpayer. 33.In fact, while interpreting “Kar Vivad Samadhan Scheme”, the SupremeCourt in Commissioner of Income Tax, Rajkot Versus Shatrusailya Digvijaysingh 33.In fact, while interpreting “Kar Vivad Samadhan Scheme”, the SupremeCourt in Commissioner of Income Tax, Rajkot Versus Shatrusailya Digvijaysingh Jadeja, (2005) 7 SCC 294 held that the object of the said Scheme was to settle taxarrears locked in litigation at a substantial discount and it provided that any taxarrears could be settled by paying the prescribed amount of tax arrears, and itoffered benefits and immunities from penalty and prosecution. The Supreme Courtheld that the “Kar Vivad Samadhan Scheme” was in substance a recovery schemethough it was nomenclatured as a "litigation settlement scheme" and was not similarto the earlier VDI Scheme. It further held that the object of “Kar Vivad SamadhanScheme” 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 toput an end to litigation in various forms and at various stages under the ITAct/Wealth Tax Act and therefore the rulings on the scope of appeals and revisionsunder 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 exemptionnotification, has no application to the present case. THE UNIT FOR SETTLEMENT OF DISPUTE UNDER THE DTVSV ACT, 2020 ISAN APPEAL, WRIT PETITION OR SLP AND NOT THE ASSESSMENT YEAR. 34.This Court is further of the view that under the DTVSV Act, 2020 eachappeal, writ petition or SLP is treated as a separate dispute which is evident fromSection 2(1)(j) read with Section 2(1)(a) of the Act. The said Sections provide thatdisputed tax for each appeal, writ petition or SLP is to be computed and, thedisputed tax payable by the declarant is the amount as if such appeal, writ petition orSLP were to be decided against the assessee. Section 2(1)(a) of the Act use thewords “an appeal” and Section 2(1)(j) of the Act uses the word “any appeal” bothof which indicate that the unit for settlement of dispute under the provisions ofDTVSV Act is an appeal or a writ petition or a SLP. The aforesaid position isfurther 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 thepurpose 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 authorityprescribed under the Rules where the Column No.3 records the detail of the ‘Detailsof dispute settled (Appeal Reference Number)’. 35.The submission of the revenue that under the DTVSV Act the unit ofsettlement is an assessment year is contrary to its own stand as the Department hasno grievance with the petitioner not settling the appeal filed by it for the sameassessment year, but requires the petitioner to settle all the Departmental appeals foran assessment year. In fact, the aforesaid position is not borne out from anyprovision of the DTVSV Act or the Rules. Consequently, the unit for settlement of dispute under the DTVSV Act, 2020 is an appeal, writ petition or SLP and not theassessment year as had been canvassed by the revenue. 36.Even assuming that the DTVSV Act is a taxing statute, there is no restrictionon an assessee to choose an appeal to be settled under the DTVSV Act as Section2(1)(j) uses the words “any appeal” which even on a literal interpretation wouldmean any one or more appeals. dispute under the DTVSV Act, 2020 is an appeal, writ petition or SLP and not theassessment year as had been canvassed by the revenue. 36.Even assuming that the DTVSV Act is a taxing statute, there is no restrictionon an assessee to choose an appeal to be settled under the DTVSV Act as Section2(1)(j) uses the words “any appeal” which even on a literal interpretation wouldmean any one or more appeals. 37.Moreover, the issues raised by the Department in the SLP filed before theSupreme Court is in respect of deduction for salary paid to expatriates and theapplicability of Section 115JB of the Act.However, this issue is not at allconnected with the deemed appeal arising from the order of the Tribunal dated 16[th]September, 2019 wherein the issue of taxability of ECB interest and levy of interestunder Section 234D of the Act is involved. Since, the issues involved in both theappeals are different and unconnected, this Court is of the view that the contentionof the Department that the Petitioner ought to have settled the SLP pending in theSupreme Court, along with the deemed appeal of the Department is incorrect andbad in law. -THE RESPONDENTS RELIANCE ON FAQ7, 27, 11 AND 14 IS MISCONCEIVEDAND UNTENABLE IN LAW. 38.The respondents’-revenue reliance on FAQ-7, 27, 11 and 14 is misconceivedand untenable in law. The DTVSV Act permits the settlement of a dispute which ispending either in appeal, writ petition or SLP. The assessee cannot settle any issuewhich may arise in the assessment proceeding pending before the AO. However,FAQ-7 of the Circular dilutes the rigour and by a concession, enables the assessee tomake an application under DTVSV Act for the issues remanded to the AO by anappellate authority; the only condition being that the assessee must also settle the issues which are not remanded back by the appellate authority as the assessee is notallowed to pick and choose the issues for settlement. This cannot be regarded aslaying down a principle that the declarant is required to settle all the appeals for anassessment year. 39.FAQ - 27 is consequential to FAQ - 7, as it provides for the manner ofcomputing disputed tax when the declarant files a declaration for settlement ofissues which are remanded by an appellate authority to the AO. FAQ - 27 states thatin the event the declarant decides to settle the issues remanded by an appellateauthority, the declarant is also required to settle the issues which are not set aside bythe appellate authority and further provides that the disputed tax for the issuesremanded to the AO will be the same amount if the addition was to be repeated bythe AO. 40.FAQ-27 has no application in the instant case as the Petitioner had filed adeclaration with respect to a deemed appeal of the Department arising from theorder of the Tribunal dated 16[th]September, 2019 and there were no issues pendingbefore the AO for consideration. 41.This Court is of the view that FAQ No. 11 deals with cases where in oneappeal a qualifying and a non-qualifying issue arise for consideration. However, thecase of the Petitioner does not fall under any clauses of the section 9, which definesnon-qualifying tax arrears.Consequently, FAQ-11 has no applicability to thepresent case. 42.This Court is also of the view that FAQ-14 supports the case of the Petitioneras it allows the assessee to make a declaration for settlement of a dispute withrespect to "one" order and does not require the assessee to settle all the disputesarising from different orders for a particular year. -FAQ19 IN UNEQUIVOCAL TERMS INDICATES THAT THE ASSESSEE HAS ANOPTION TO CHOOSE THE APPEAL TO BE SETTLED UNDER THE DTVSVACT. 43.In any event, any doubt which one may have with regard to interpretation ofDTVSV Act is put to rest by FAQ-19 which gives an option to the assessee tochoose appeals for the same assessment year, which are pending before differentforums, to be settled under the provisions of DTVSV Act. FAQ-19 is reproducedhereinbelow:- “FAQ No.19 42.This Court is also of the view that FAQ-14 supports the case of the Petitioneras it allows the assessee to make a declaration for settlement of a dispute withrespect to "one" order and does not require the assessee to settle all the disputesarising from different orders for a particular year. -FAQ19 IN UNEQUIVOCAL TERMS INDICATES THAT THE ASSESSEE HAS ANOPTION TO CHOOSE THE APPEAL TO BE SETTLED UNDER THE DTVSVACT. 43.In any event, any doubt which one may have with regard to interpretation ofDTVSV Act is put to rest by FAQ-19 which gives an option to the assessee tochoose appeals for the same assessment year, which are pending before differentforums, to be settled under the provisions of DTVSV Act. FAQ-19 is reproducedhereinbelow:- “FAQ No.19 Question No.19. The assessment order under section 143(3) of the Actwas passed in the case of an assessee for the assessment year 2015-16.The said assessment order is pending with ITAT. Subsequently anotherorder under section 147/143(3) was passed for the same assessment yearand that is pending with CIT (Appeals)? Could both or one of the ordersbe settled under Vivad se Vishwas? Answer: The appellant in this case has an option to settle either of thetwo appeals or both appeals for the same assessment year. If he decidesto settle both appeals then he has to file only one declaration form. Thedisputed tax in this case would be the aggregate amount of disputed tax inboth appeals. (emphasis supplied) 44.Consequently, the contention of the respondents-revenue that the option isavailable