Wp/22151/2023 Of Mahesh Goud Voruganti v. Income Tax Officer

[ [33861] HIGH COURT FOR THE STATE AT HYDERABAD(Special Original Jurisdiction) THURSDAY, THE TWELFTH DAY OF OCTOBERTWO THOUSAND AND TWENTY THREE PRESENT THE HONOURABLE SRI JUSTICE P.SAM KOSHYANDTHE HONOURABLE SRI JUSTICE LAXMI NARAYANA ALtSHETry WRIT PETITION NO: 22151 OF 2023 Between: Mahesh Goud Voruganti, S/o Gandaiah Goud [Voruganti, ][Aged ][about ][41]years, Occ. Business, H.No. 1-9, Thungini, Navipet Mandal, DistrictNizamabad' Telangana state' ...pETrroNER AND 1. lncome Tax Officer, Ward-3, District Nizamabad, [Telangana ][State.]2. The Principle Commissioner of lncome Tax-ll, 6th Floor Signature [Towers,]Kondapur, Opposite Botanical Gardens, Hyderabad.2. The Principle Commissioner of lncome Tax-ll, 6th Floor Signature [Towers,]Kondapur, Opposite Botanical Gardens, Hyderabad. ...RESPONDENTS Petition under Article 226 of the Constitution of [lndia ][praying ][that ][in ][the]circumstances stated in the affidavit filed therewith, the [High ][Court ][may ][be]pleased to issue a Writ, Order or orders, direction or more [particularly ][one ][in]nature of Writ of Mandamus declaring the order dated [1110712023, ][passed ][by ][the]Honourable lncome Tax Appellate Tribunal, Hyderabad, [Benches ][SMC,]Hyderabad in M.A.No.52|HYD|2O23 in ITA No.37lHYDl2020, [is ][against ][the]provisions of the Direct Taxes Vivad Se Viswas Act and against the [provisions]lncome Tax Act and set-a-side the said order and direct [the ][Honourable ][Tribunal]to revive the lncome Tax Appeal No.37lHYD/2020. lA NO: 1 OF 2023 Petition under Section 151 CPC [praying ]that [in the circumstances stated ][in]the affidavit filed in support of the [petition, ][the ][High ][Court may be ][pleased ][to ][stay]all further proceedings subsequent to the dismissal [of ][M.A.No.52lHYDl2O23 ][in ] No.37/HYD/2020, pending disposal of the Writ Petition. Counsel for the Petitioner: SRI SRINIVAS Counsel for the Respondents: SRI SUNDARI [PISUPATI, SR.SC ] TAX DEPARTMENT The Court made the following: 't HONOURABLE SRI JUSTICE P.SAM KOSHYANDHON'BLE SRI JUSTICE LAXMI NARAYANA ALISHETTYWRIT PETITION No.22151 oL2O23 ORDER: (per Hon'ble S.i Justice l-ox.ni N'arqllana AlishettA) The present writ petition has been filed to issue writ ofmandamus declaring the order dated 1 1.O7.2023 passed by theHon'ble Income Tax Appellate Tribunal, Hyderabad Bench"SMS", Hyderabad in MA No.52lHydl2023 in ITA No.37lHyd/2O2O and further direction to the Tribunal to revive the ITANo.37 /Hydl2O2O. 2. The briel facts leading to filing of rvrit petition are asunder: 3. i'he petitioner is the incomc tax assessee and fi1ed incometax returns for the assessment year 2Ol3-14 on 31.03.2015declaring total taxable income of Rs.5,20,576/-, which is derivedfrom the life stocks, breds and stocks, Shreshta Bore We1ls,Vasavi Ice Cream Parlour, construction of shed, water and otherservices and had paid tax of Rs.79,24O l-. The assessment of thepetitioner was completed under Section 1a3(3) of the Income TaxAct on 31.03.2016 and the Assessing Officer (A.O.) made anaddition of Rs.22,O0,OOO/- to the income declared theby petitioner i.e., Rs.5,20,580/- and thus, raised the clemand ofRs. 10,28,OO0/- to be paid by the petitionerRs. 10,28,OO0/- to be paid by the petitioner 4. Aggrieved by the same, petitioner preferred appeal beforethe Commissioner of Income Tax (Appeals)-S, Hyderabad [forshort, CIT(A)1, who vide order dated 25.07 .2017 deleted theaddition of Rs.5,63,636/- olut of Rs.22,0O,O00/- and confirmedthe balance addition of Rs. 16,36,364/-. petitioner i.e., Rs.5,20,580/- and thus, raised the clemand ofRs. 10,28,OO0/- to be paid by the petitionerRs. 10,28,OO0/- to be paid by the petitioner 4. Aggrieved by the same, petitioner preferred appeal beforethe Commissioner of Income Tax (Appeals)-S, Hyderabad [forshort, CIT(A)1, who vide order dated 25.07 .2017 deleted theaddition of Rs.5,63,636/- olut of Rs.22,0O,O00/- and confirmedthe balance addition of Rs. 16,36,364/-. 5. Aggrieved by the order of CIT(A), the petitioner approachedthe Hon'ble Income Tax Appellate Tribunal (for short, TribunalJand the Tribunal vide order dated 25.O4 .20 18 set aside additionof Rs. 16,36,364/- and directed the A.O., to verify thecontentions of assessee. Consequent to the orders of theAppellate Tribunal, the A.O., passed orders on 27.12.2018confirming addition of Rs. 16,36,364/-. 6. Aggrieved by the said order, petitioner filed appeal beforethe CIT (A) and by an order dated 18.1 1.2019, the CIT(A)reduced a sum of Rs.3,00,000/- out of Rs. 16,36,3641- and,conl-rrmed the addition of Rs. 13,36,364/-. Aggrieved by the orderof CIT(A), petitioner approached the Tribunal on O9.O7.2O2O.While the appeal was pending adjudication, the Government ofIndia announced a scheme in the form of Direct Taxes Vivad Se a -/ a' 3 Vishwas Scheme (for short, 'DTVSV'). Petitioner applied underthe said scheme and had received Form-3 dated 04.01.2021from the Income Tax Department raising a demand ofRs.5,75,026/- in accordance with the said scheme. 7. Consequent to the [rling of application under DTVSVScheme, petitioner approached the Tribunal with a prayer thatthe petitioner does not want to pr,rrsue the appeal since thepetitioner filed Form-I and Form-ll with the Department underthe DTVSV and the reply from the Department is awaited.Considering the prayer of the petitioner, the Tribunal vide orderdated 20.0 1 .2021 permitted the petitioner to withdraw theappeal and further, granted liberty to petitioner to reinstate theappeal if the application filed by the petitioner under DTVSVscheme is rejected. The operative portion of the Tribunal wasreproduced hereunder for ready reference. "4. After hearing both the parties, according to the requestof the assessee and its learned A.R., I hereby allow theappeal of the assessee to be rvithdrawn. I also make it clearthat the assessee shall be at liberty to approach theTribunal within the stipulated time as provided under theAct, in order to reinstate the appeal if the apptication withrespect to Vivad se Vishwas Scheme is rejected." 8. 8. However, petitioner failed to pay the amount ofRs-5,75,026/- demanded by the Department vide Form-3 dated '.ii*r',*. 04.Ol .2021 . The petitioner approached the Department onll .O4.2O23 informing the Department that the proceedingsunder DTVSV cannot be proceeded with since petitioner couldnot pay the demand raised under Form-3. Thereafter, petitionerlrled an application No.52/Hyd/2023 in ITA No.37lHyd/2O2Obefore the Tribunal seeking to recall the order dated 2O.O7.2027and revive the appeal. However, said application hled by thepetitioner was dismissed by the Tribunal vide order dated11.O7 .2023 with the following observations. "7. ln view of the above, the miscellaneous application hledby the petitioner is not maintainable as the time granted forrectification, as per Section 25aQ), is within six monthsand the order was passed by the Tribunal on 2O.O1.2O21,does not suffer from any error. Even otherwise, Sections 3and 5 under the Vivad Se Vishwas Scheme, 202i providesmandatory dismissal of appeal on issuance of Form No.3." 9. The order dated 1 1.O7 .2023 passed by the Tribunal isunder challenge in the present writ petition. 10. Heard learned counsel Sri Gangishetty Srinivas for thepetitioner and the learned standing counsel Smt. Sundari RPisupati for the respondent-Department. 1 1. lrarned counsel for petitioner would submit that due tounavoidable circumstances, petitioner could not pay the _=_F.y "7. ln view of the above, the miscellaneous application hledby the petitioner is not maintainable as the time granted forrectification, as per Section 25aQ), is within six monthsand the order was passed by the Tribunal on 2O.O1.2O21,does not suffer from any error. Even otherwise, Sections 3and 5 under the Vivad Se Vishwas Scheme, 202i providesmandatory dismissal of appeal on issuance of Form No.3." 9. The order dated 1 1.O7 .2023 passed by the Tribunal isunder challenge in the present writ petition. 10. Heard learned counsel Sri Gangishetty Srinivas for thepetitioner and the learned standing counsel Smt. Sundari RPisupati for the respondent-Department. 1 1. lrarned counsel for petitioner would submit that due tounavoidable circumstances, petitioner could not pay the _=_F.y amount Rs.5,75,O26/ - demanded by the Department videForm-3 under DTVSV scheme within stipulated time. He furthersubmitted that Tribunal erred in dismissing the applicationNo.52/Hydl2023 and by wrongly relying on Section 25aQl ofthe Income Tax Act, as per which, an application forrectification of order of Tribunal has to filed within a period ofsix months. He further submitted that Section 254(21 has noapplication to the petition fi1ed by the petitioner, which was liledfor revival of the appeal vide ITA No.37 lHydl2O2O. He furthersubmitted that the Tribunal itself vide its orders dated2O.O1.2O21 had granted liberty to petitioner to seek revival ofthe appeal if application filed by the petitioner under DTVSVscheme is rejected by the Department. Therefore, the orderdated 1 1 .O7 .2023 passed by the Tribunal is erroneous and isIiable to be set aside. 12. Per contra, learned standing counsel for Departmentwould submit that under Form-3 dated 04.01.2O21, wherein itwas determined to pay Rs.5,22,751/ - on or before 31.O3.2O21or to payRs.S,75,026/- after 31.O3.2021. The time for paymentof the said amount was further extended to 3 1 . 1O.2O2 1 .Petitioner failed to comply with the demand of the Departmentwithin the stipulated time and further, the time lapsed long .-'$q.:.ri* back and the petitioner approached the Department through hisauthorized representative on I | .O4 .2023 requesting that theproceedings under DTVSV cannot be proceeded with. Shefurther submitted that petitioner was aware of the default longback having failed to pay the amount within the stipulated time,which expired on 3 1 . 10.202 1. Therefore, there is an inordinatedelay on the part of petitioner in approaching the Departmentas well as Tribunal seeking for revival of the appeal. 13. She further submitted that the application i.e.,M.A.No.52l Hydl2o23 was itself hled by the petitioner underSection 25aQ\ of the Act, therefore, the Tribunal is justified indismissing the application. As per section 25aQl of the Act, anapplication for rectification can be filed within the period of sixmonths from the date of receipt of order. Admittedly, the orderwas passed on 20.O1.2O21, whereas the application i.e.,M.A.No.52lHydl2O23 was Iiled on O3.O7.2023 and as such,there is no illegalify in the order passed by the Tribunal indismissing the said application and no ground is made out tointerfere with the order dated 11.O7.2023. 14. Admittedly, the Tribunal vide order dated, 2O.O1.2O27granted liberly to the petitioner herein to approach the Tribunal to reinstate the appeal in case application submitted by thepetitioner under DTVSV scheme is rejected. It is pertinent tonote that the Tribunal had referred to Section 25aQl ol the Actwhile dismissing M.A.No.52lHydl20223, construing the timelimit as six months as stipulated under Section 254(2) of theAct. Section 254(21 of the Act stipulates that an application torectihcation has to be hled within a period of six months fromthe date of order. Section 25aQl is reproduced hereunder forready reference. "S.254. Orders of Appellate Tribunal.- (1) rcorx 14. Admittedly, the Tribunal vide order dated, 2O.O1.2O27granted liberly to the petitioner herein to approach the Tribunal to reinstate the appeal in case application submitted by thepetitioner under DTVSV scheme is rejected. It is pertinent tonote that the Tribunal had referred to Section 25aQl ol the Actwhile dismissing M.A.No.52lHydl20223, construing the timelimit as six months as stipulated under Section 254(2) of theAct. Section 254(21 of the Act stipulates that an application torectihcation has to be hled within a period of six months fromthe date of order. Section 25aQl is reproduced hereunder forready reference. "S.254. Orders of Appellate Tribunal.- (1) rcorx (2) The Appellate Tribunal may, at any time within2[sixmonths from the end of the month in which the order waspassedl, with a vrew to rectifying any mistake apparentfrom the record, amend any order passed by it under sub-section (1), and shall make such amendment if the mistakeis brought to its notice by the assessee or the AssessingOlficer: Provided that an amendment which has the effect ofenhancing an assessment or reducing a refund or otherwiseincreasing the liability of the assessee, shall not be madeunder this sub-section unless the Appellate Tribunal hasunder this sub-section unless the Appellate Tribunal hasgiven notice to the assessee of its intention to do so and hasallowed the assessee a reasonable opportunity of beingheard:allowed the assessee a reasonable opportunity of beingheard: Provided further that any application arled by theassessee in this sub-section on or after the 1s day ofOctober, 1998, shall be accompanied by a fee of fiftvrupees. "October, 1998, shall be accompanied by a fee of fiftvrupees. " 15. In considered opinion of this Bench, Section 254(2\ of theAct has no application to the petition filed by the petitioner,which was hled for revival of the appeal. Therefore, rectificationof an order and revival of an appeal are different and cannot beequated. Though there is delay on the part of the petitioner inapproaching the Tribunai, in the considered view of this bench,the petitioner should be afforded an opportunity to pursue hisappeal, to meet the ends of [justice ]or else he would be renderedremedyless. 16. Since the application under Section 254(2) itself was notmaintainable, using the inherent powers with the Tribunal, theyshould have treated the application under Section 25a Ql asone seeking revival of the appeal, in the light of the earlier orderof the Tribunal dated 20.O1.2021. 17. In the above factual matrix, the order dated 11.07.2023passed by the Tribunal is set aside and consequently, theapplication under Section 25aQl is ordered to be treated as anapplication for revival of the appeal. The Appeal videI.TA.No.32/Hyd/2O2O is restored and the Appellate Tribunal isdirected to dispose of the appeal as expediliously as possible inaccordance with law on its own merits. 18. Accordingly, the Appeal stands allowed. There shall be noorder as to costs. 19. Pending miscellaneous applications if any shall standclosed. SD/- V.KAVITHAASSISTANT REGISTRAR4_.SECTION OFFICER //rRUE COPY/I To1lncome Tax Officer, Ward-3, District Nizamabad, Telangana State.1lncome Tax Officer, Ward-3, District Nizamabad, Telangana State. 12The Principle Commissioner of lncome Tax-ll, 6th Floor Signature [Towers,]Kondapur, Opposite Botanical Gardens, Hyderabad.2The Principle Commissioner of lncome Tax-ll, 6th Floor Signature [Towers,]Kondapur, Opposite Botanical Gardens, Hyderabad. 3One CC to SRI SRINIVAS GANGISHETTI, Advocate 4One CC to SRI SUNDARI R PISUPATI, SR.SC FOR INCOME TAXDEPARTMENT TOPUC]4One CC to SRI SUNDARI R PISUPATI, SR.SC FOR INCOME TAXDEPARTMENT TOPUC]5Two CD CopiesPSK.GJt)-,GJt)-, HIGH COURT DATED:1211012023 ORDER WP.No.22151 of 2023 ALLOWING THE WRIT PETITIONWITHOUT COSTS. 3\[\][o\f] A\'{!. 1E- [16-]-)r)o 6 [l{0I ][1$8]-L:r;'.,J-,'*- .,, .r :.7