Ritesh Bakuleshbhai Mehta v. The Principal Commissioner Of Income Tax 1

IN THE HIGH COURT OF GUJARAT AT AHMEDABADR/SPECIAL CIVIL APPLICATION NO. 9469 of 2021 FOR APPROVAL AND SIGNATURE: HONOURABLE MS. JUSTICE BELA M. TRIVEDI andHONOURABLE DR. JUSTICE ASHOKKUMAR C. JOSHI ========================================================== 1Whether Reporters of Local Papers may be allowedNOto see the judgment ?2To be referred to the Reporter or not ?NO3Whether their Lordships wish to see the fair copyNOof the judgment ?4Whether this case involves a substantial questionNOof law as to the interpretation of the Constitutionof India or any order made thereunder ? ========================================================== RITESH BAKULESHBHAI MEHTA Versus THE PRINCIPAL COMMISSIONER OF INCOME TAX 1 ==========================================================Appearance: HIREN J TRIVEDI(8808) for the Petitioner(s) No. 1MRS MAUNA M BHATT(174) for the Respondent(s) No. 1,2,3========================================================== CORAM: HONOURABLE MS. JUSTICE BELA M. TRIVEDI andHONOURABLE DR. JUSTICE ASHOKKUMAR C. JOSHI Date : 10/08/2021 ORAL JUDGMENT (PER : HONOURABLE MS. JUSTICE BELA M. TRIVEDI) 1.Rule. Mrs. Mauna Bhatt, Senior Standing Counsel for theRespondent waives service of Rule. 2. With the consent of learned learned Advocate for the parties, thePetition is taken up for final hearing. 3. The present Petition filed by the Petitioner – Ritesh BakuleshbhaiMehta, under Article 226 of the Constitution of India, is directedagainst the impugned communication dated 26.04.2021 (Annexure-G), rejecting the Declaration filed by the Petitioner under “TheDirect Tax Vivad se Vishwas Act, 2020 (hereinafter referred to as“the said Act”). 4.The facts in nutshell giving rise to the present petition arethat after first round of litigation upto ITAT, remand proceedingswere conducted by the Assessing Officer in case of the petitionerfor the block assessment for the years 01.04.1195 to 13.12.2001.The Assessing Officer vide order dated 27.12.2011 framed theassessment for the said period. The petitioner assailed the saidorder before the CIT (Appeals) by filing an Appeal alongwith anapplication seeking condonation of delay. Thereafter, the Appealwas fixed from time to time, and was lastly fixed on 05.02.2016. Itis further case of the Petitioner that the said Act having come intoforce, for settling the disputes, the Petitioner being desirous ofsettling the dispute involved in the Appeal pending on the specifieddate i.e. 31.1.2020, had decided to opt for availing the benefitunder the said Act, and accordingly, had filed the Declaration in the prescribed Form Nos. 1 and 2 on 02.01.2021 under the said Act.However, it was displayed on the E-filing portal of the Respondentthat the said Declaration was rejected on 26.04.2021, mainly on theground that the First Appeal was filed belatedly and there was noinformation received from the Assessing Officer, as to whether, thedelay occurred in filing the Appeal before the Appellate Authoritywas condoned or not. 5.Learned Advocate Mr. H.J.Trivedi appearing for thepetitioner has submitted and learned Senior Standing Counsel Mrs.Mauna Bhatt has not disputed that the facts of the present case aresimilar to the facts in Special Civil Application No. 6232 of 2021,which has been allowed by the Court vide order dated 31.07.2021.In the said order it has been held as under: “7. Before adverting to the submissions made by the learnedAdvocates for the parties, it would be germane to reproducethe definition of the ‘Appellant’ as contained in Section 2(i)(a) of the said Act as well as the definition of the ‘specifieddate’ as contained in Section 2(i)(n) thereof: “2. (1) In this Act, unless the context otherwiserequires,— (a)"appellant" means 5.Learned Advocate Mr. H.J.Trivedi appearing for thepetitioner has submitted and learned Senior Standing Counsel Mrs.Mauna Bhatt has not disputed that the facts of the present case aresimilar to the facts in Special Civil Application No. 6232 of 2021,which has been allowed by the Court vide order dated 31.07.2021.In the said order it has been held as under: “7. Before adverting to the submissions made by the learnedAdvocates for the parties, it would be germane to reproducethe definition of the ‘Appellant’ as contained in Section 2(i)(a) of the said Act as well as the definition of the ‘specifieddate’ as contained in Section 2(i)(n) thereof: “2. (1) In this Act, unless the context otherwiserequires,— (a)"appellant" means (i) a person in whose case an appeal or a writ petitionor special leave petition has been filed either by him orby the income-tax authority or by both, before anappellate forum and such appeal or petition is pendingas on the specified date; (ii) a person in whose case an order has been passed bythe Assessing Officer, or an order has been passed bythe Commissioner (Appeals) or the Income TaxAppellate Tribunal in an appeal, or by the High Court ina writ petition, on or before the specified date, and thetime for filing any appeal or special leave petitionagainst such order by that person has not expired as onthat date; (iii) a person who has filed his objections before theDispute 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 ResolutionPanel has issued direction under sub-section (5) ofsection 144C of the Income-tax Act and the AssessingOfficer has not passed any order under subsection (13)of that section on or before the specified date; (v) a person who has filed an application for revisionunder section 264 of the Income-tax Act and suchapplication is pending as on the specified date;" [Explanation.—For the removal of doubts, it is herebyclarified that the expression "appellant" shall not include and shall be deemed never to have beenincluded a person in whose case a writ petition orspecial leave petition or any other proceeding has beenfiled either by him or by the income-tax authority or byboth before an appellate forum, arising out of an orderof the Settlement Commission under Chapter XIX-A ofthe Income-tax Act, and such petition or appeal is eitherpending or is disposed of.] 8. As per Section 2(i)(n), "specified date" means the 31[st] day of January, 2020; 9. In the light of the aforestated provisions, let’s examine asto whether the petitioner could be said to be an “Appellant”within the meaning of Section 2(i)(a) of the said Act or not. Inthe present Petition, there are certain undisputed facts. It isnot disputed that the Appeal filed by the Petitionerelectronically on 17.5.2016 against the order of assessmentdated 25.2.2016 is pending with the Appellate Authority,though there was delay of 40 days occurred in filing the saidAppeal. It is also not disputed that the said delay has notbeen condoned by the Appellate Authority since the filing ofthe Appeal. It is stated at the bar by the learned SeniorAdvocate Mr. Hemani, and not disputed by the learnedSenior Standing Counsel Mrs. Mauna Bhatt that there is nopractice of registering an application for condonation ofdelay separately at the office of the CIT (Appeals), and thesame is heard along with the Appeal itself. Even in theprescribed Form No.35, there was Column No. 15, where thePetitioner – Appellant was required to mention about thenumber of days of delay occurred in filing the Appeal. It hasalso emerged from the record of the Petition that theAppellate Authority itself had issued various notices to the Petitioner with regard to the hearing of the said Appeal.Now, the Declaration made by the Petitioner under the saidAct has been rejected as shown in the portal, on the followinggrounds: “In your case, the AO has reported that “As per form-35the demand notice against the assessment order hasbeen served on 25.2.2016. However, applicant has filedappeal on 17.05.2016, which is beyond the time limitprescribed for filing appeal before CIT appeal. It hashas been reported by the AO that leter to CIT appealhave been issued regarding any condonation orderpassed for delay in filing of appeal by the assessee.However, till date no reply has been received from theCIT appeal. Further, as per minutes of meeting heldwith CBDT Chairman and Members through videoConference on 04.01.2021, it was conveyed that orderdisposing condonation applications of the assessee willbe passed in all cases within week by CsIT (AU)s.However, no information has been received fromNFAC / respective CsIT (AU)s as to whether the delay has been condoned in this case. Under thecircumstance, declaration filed is hereby rejected.” 10. At this juncture, it would be relevant to refer to thedecision of Supreme Court in case of Commissioner ofIncome Tax v. Shatrusailya Digvijaysingh Jadeja, reliedupon by the learned Senior Advocate Mr. Hemani, in whichthe S.C. had an occasion to deal with the issue, as towhether, the department could have rejected the Declarationfiled under the similar scheme called Kar Vivad SamadhanScheme, introduced vide the Finance [No.2] Act 1998, on theground that the Revision / Appeal filed by the concerned Petitioner was time barred or was not valid. In the said case,the Supreme Court considered the object of the said Schemeas also the other earlier decisions, and observed as under: “13. In our view, the Scheme was in substance arecovery scheme though it was nomenclatured as a"litigation settlement scheme" and was not similar tothe earlier Voluntary Disclosure Scheme. As statedabove, the said Scheme was a complete Code by itself.Its object was to put an end to all pending matters inthe form of appeals, reference, revisions and writpetitions under the IT Act/WT Act. Keeping in mind theabove object, we have to examine section 95(i)(c) of theScheme, which was different from appeals undersection 246, revisions under section 264, appeals undersection 260A etc. of the IT Act and similar provisionsunder the W.T. Act. Under the I.T. Act, there is adifference between appeals, revisions and references.However, those differences were obliterated andappeals, revisions and references were put on parunder section 95(i)(c) of the Scheme. The object behindsection 95(i)(c) in putting on par appeals, referencesand revisions was to put an end to litigation in variousforms and at various stages under the IT Act/WealthTax Act and, therefore, the rulings on the scope ofappeals and revisions under the IT Act or on VoluntaryDisclosure Scheme, will not apply to this case. 15. In the case of Dr. Mrs. Renuka Delta (supra), thisCourt has held on interpretation of section 95(i)(c) thatif the appeal or revision is pending on the date of thefiling of the declaration under section 88 of the Scheme,it is not for the DA to hold that the appeal/revision was "sham", "ineffective" or "infructuous" as it has. 15. In the case of Dr. Mrs. Renuka Delta (supra), thisCourt has held on interpretation of section 95(i)(c) thatif the appeal or revision is pending on the date of thefiling of the declaration under section 88 of the Scheme,it is not for the DA to hold that the appeal/revision was "sham", "ineffective" or "infructuous" as it has. 16. In the case of Raja Kulkarni v. The State of Bombayreported in AIR 1954 SC 73, this Court laid down thatwhen a section contemplates pendency of an appeal,what is required for its application is that an appealshould be pending and in such a case there is no needto introduce the qualification that it should be valid orcompetent. Whether an appeal is valid or competent isa question entirely for the appellate court before whomthe appeal is filed to decide and this determination ispossible only after the appeal is heard but there isnothing to prevent a party from filing an appeal whichmay ultimately be found to be incompetent, e.g., whenit is held to be barred by limitation. From the mere factthat such an appeal is held to be unmaintainable on anyground whatsoever, it does not follow that there was noappeal pending before the Court. 17. To the same effect is the law laid down by thejudgment of this Court in the case of Tirupati BalajiDevelopers (P) Ltd. v. State of Bihar & Others reportedin (2004) 5 SCC 1, in which it has been held that anappeal does not cease to be an appeal though irregularand incompetent.” 11. In view of the aforestated legal position, there remainsno shadow of doubt that appeal could be said to be pending,even if the delay occurred in filing the same was notcondoned and even if it was allegedly irregular orincompetent. In the instant case therefore also, theRespondent could not have rejected the Declaration Form ofthe Petitioner filed under the said Act merely on the ground that the Appeal was not valid or competent, as the delayoccurred in filing the Appeal was not condoned by theAppellate Authority. In the opinion of the Court, theRespondent had to only take into consideration, as towhether, the Petitioner had filed an Appeal, and the samewas pending on the ‘specified date’ i.e. 31.1.2020. It wasnot for the Respondent to decide, as to whether, suchAppeal was irregular or incompetent or invalid in the eye oflaw.” 6.In view of the above, the impugned communication dated26.04.2021 rejecting the Declaration filed by the petitioner underthe said Act, deserves to be quashed and set aside, and isaccordingly quashed and set aside. The respondent is directed toaccept the said Declaration under the said Act for the assessmentyear under consideration, if otherwise it is valid. The petition stands allowed accordingly. Rule is madeabsolute. (BELA M. TRIVEDI, J) SINDHU NAIR (A. C. JOSHI,J)