Wp-1571-2021.Doc v. Assistant Commissioner Of Income-Tax-15(2), Mumbai

IN THE HIGH COURT OF JUDICATURE AT BOMBAYORDINARY ORIGINAL CIVIL JURISDICTION WRIT PETITION NO. 1571 OF 2021 Rishab Steel House 101/102, Rishab House, 30, Ducan Road, M.A. Road, Mumbai – 400004PAN:AACFR2807C…Petitioner Versus 1.Assistant Commissioner of Income-Tax-15(2), Mumbai, Room No. 206, 1[st] floor, Matru Mandir, Tardeo Road,Mumbai – 400027. 2Pr. Commissioner of Income-tax-19, Mumbai,Room No. 206, 1[st] floor, Matru Mandir, Tardeo Road,Mumbai – 400027. 3Central Board of Direct Taxes (CBDT),Ministry of Finance, CS Building, North Block, Parliament Street, New Delhi – 110001.…Respondents … WITH WRIT PETITION NO. 1519 OF 2021 Rishab Steel House 101/102, Rishab House, 30, Ducan Road, M.A. Road, Mumbai – 400004PAN:AACFR2807C…Petitioner Versus 1.Dy. Commissioner of Income-Tax-15(2), Mumbai, Room No. 206, 1[st] floor, Matru Mandir, Tardeo Road,Mumbai – 400027. 2Pr. Commissioner of Income-tax-19, Mumbai,Room No. 206, 1[st] floor, Matru Mandir, Tardeo Road,Mumbai – 400027. 3Central Board of Direct Taxes (CBDT),Ministry of Finance, CS Building, North Block, Parliament Street, New Delhi – 110001.… … WITH WRIT PETITION NO. 1537 OF 2021 Rishab Steel House 101/102, Rishab House, 30, Ducan Road, M.A. Road, Mumbai – 400004PAN:AACFR2807C… Versus 1.Income-tax Officer-19(3)(1) Mumbai, Room No. 206, 1[st] floor, Matru Mandir, Tardeo Road,Mumbai – 400027. 2Pr. Commissioner of Income-tax-19, Mumbai,Room No. 206, 1[st] floor, Room No. 206, 1[st] floor, Matru Mandir, Tardeo Road,Mumbai – 400027. 3Central Board of Direct Taxes (CBDT),Ministry of Finance, CS Building, Ministry of Finance, CS Building, North Block, Parliament Street, New Delhi – 110001. Respondents Petitioner Ms.Rutuja Pawar with Ms.Hetal Laghave for the Petitioner.Mr.Sham Walve for the Respondent. ... CORAM : K.R.SHRIRAM & ABHAY AHUJA, JJ DATED :25[th] August, 2021. WRIT PETITION NO. 1519 OF 2021 ORAL JUDGMENT : (PER K.R. SHRIRAM, J.) 1In view of the short issue involved and since pleadings are completed,Court decided to dispose the Petition at the Admission stage itself. 2One Nagraj Bhansali carries on business in the name of ‘Rishab SteelHouse’ (Petitioner). Petitioner decided to take advantage of the Direct TaxVivad se Vishwas Act, 2020 (DTVSV Act) to put an end to an Appeal whichPetitioner had filed relating to Assessment Year 2006-2007 that was pendingin this Court. Petitioner, therefore, filed its form No.1 being a declarationand undertaking under the DTVSV Act. The Appeal that Petitioner wantedto settle was Appeal No. ITXA(L)No.2084 of 2019 filed by Petitioner andpending in this Court. The Department accepted the Form and issued FormNo.3 being certificate under sub Section 1 of Section 5 of DTVSV Act r/wDTVSV Rules 2020. As stated in the Form No.3, the Department indicated 63-wp-1571-2021.doc the amount payable by Petitioner towards full and final settlement of the taxarrears covered by the declaration for Assessment Year 2006-2007.Respondent has quoted the details of the proceedings for which Petitionerhad filed the declaration but in its conclusion arrived at a figure muchhigher than what Petitioner was liable to pay as per the declaration filed inForm No.1. As per the declaration in Form No.1, the amount payable byPetitioner was Rs.34991/- whereas in Form No.3 Respondent wasdemanding an amount of Rs.444941/- if paid before 31/03/2021 andRs.480572/- if paid after 31/03/2021. 63-wp-1571-2021.doc the amount payable by Petitioner towards full and final settlement of the taxarrears covered by the declaration for Assessment Year 2006-2007.Respondent has quoted the details of the proceedings for which Petitionerhad filed the declaration but in its conclusion arrived at a figure muchhigher than what Petitioner was liable to pay as per the declaration filed inForm No.1. As per the declaration in Form No.1, the amount payable byPetitioner was Rs.34991/- whereas in Form No.3 Respondent wasdemanding an amount of Rs.444941/- if paid before 31/03/2021 andRs.480572/- if paid after 31/03/2021. 3According to Respondent, as stated in Form No.3 in ‘Remarks’ columnthe VSV application is filed against the appeal filed by the department anddisputed tax to be calculated as 62.5% as the addition was on the basis ofinformation received related to search action under Section 132. We haveto mention that there was an Appeal which Department had filed and waspending in this Court in which the Department has impugned the sameorder passed by the Income Tax Appellate Tribunal which Petitioner hadimpugned in its Appeal (L) No. 2084 of 2019. The Department in itsAffidavit-in-Reply has clarified they had erroneously calculated 62.5% of thedisputed tax considering Petitioner’s case as a search case whereas later 63-wp-1571-2021.docrealized that it is not a search case and it should be calculated only at 50%,in light of the order passed by this Court in the case of Bhupendra H. MehtaV/s PCIT-19, Mumbai and Others dated 27/04/2021. This clarification, ifwe may say so, does not satisfy the Petitioner’s case because according toPetitioner, Petitioner had filed a declaration to settle only the dispute in theAppeal filed by Petitioner and not the Appeal filed by the Department. Inthe Affidavit-in-Reply, according to Respondent, if a declarant wishes to availthe benefit of DTVSV Act and if there is more than one issue pending atAppellate Forum and both the Appeals are against the same Order of ITAT,Petitioner does not have a choice only to offer to settle the Appeal filed byPetitioner but Petitioner has to settle both the Appeals. 4Ms. Pawar brought to the notice of the Court Circular No.9 of 2020dated 22[nd] April, 2020 issued by Central Board of Direct Taxes clarifying theprovisions of DTVSV Act. Question No. 40 and the answer thereto isrelevant to the matter in hand and the same reads as under: It is trite that these clarifications are binding on the department and theofficer concerned cannot have his own interpretation which is at variance tothe clarification given by CBDT Circular. It is clear from the answer toQuestion No. 40 that Petitioner has an option to settle only the Appeal filedby Petitioner or Appeal filed by the department or both. Only requirement isthat the declaration form has to be filed Assessment Year wise and fordifferent Assessment Years separate declarations have to be filed. This isfurther clarified in the answer because it states “the declarant in thedeclaration Form No.1 needs to specify whether he wants to settle hisappeal, or department’s appeal or both for a particular assessment year”.Therefore, option is available to the declarant to decide which matter thedeclarant wants to settle. Nowhere does the Circular mention or evenindicate the interpretation given in the Affidavit-in-Reply to the QuestionNo.40 and Answer thereto. 63-wp-1571-2021.doc 5We have also to note that in the rejoinder Petitioner has annexed acopy of Order dated 21[st] July, 2019 passed by Prothonotary and SeniorMaster by which the department’s Appeal being Lodging No. 1861 of 2018has been rejected under Rule 986. Mr. Walve has no instructions as towhether any restoration application has been filed. At the same time, wewould hasten to add that even if department’s Appeal was pending, ourview expressed above will not be any different. 63-wp-1571-2021.doc 5We have also to note that in the rejoinder Petitioner has annexed acopy of Order dated 21[st] July, 2019 passed by Prothonotary and SeniorMaster by which the department’s Appeal being Lodging No. 1861 of 2018has been rejected under Rule 986. Mr. Walve has no instructions as towhether any restoration application has been filed. At the same time, wewould hasten to add that even if department’s Appeal was pending, ourview expressed above will not be any different. 6We are, therefore, of the view that Petitioner is entitled to filedeclaration in respect of his appeal and avail of the benefit of the DTVSTVScheme without being obliged to include the Department’s appeal on thesame issue. 7In the circumstances, this Court’s interference is called for. Form 3issued by designated authority is set aside. The Designated Authority isdirected to consider the Declaration made by Petitioner in Form 1 and toissue and upload revised Form No.3 in terms of this Order within a periodof two weeks from the date of uploading of this order and within two weeksthereafter Petitioner shall pay the amount as mentioned in the revised FormNo.3. 63-wp-1571-2021.doc 8The Designated Authority shall issue revised Form No.3 forAssessment Years 2007-2008 and 2010-2011 also in view of the orderpassed above. 9We are informed by Mr. Walve that the department will pursue itsAppeals independently for the three Assessment Years covered by thesePetitions. Department is at liberty to take such steps as advised and theCourt will consider the same on its own merits. 10Petitions disposed with no orders as to costs. 11In view of the above, Writ Petition No. 1571 of 2021 and Writ PetitionNo. 1537 of 2021 stand disposed. (ABHAY AHUJA, J.) (K.R.SHRIRAM, J.) Digitally signedREKHAby REKHAPRAKASHPRAKASH PATILDate:PATIL2021.09.0416:07:01 +0530