Wp/3270/2021 Of Jayantilal K Bhagat v. Asstt. Commissioner Of Income Tax Circle -22 And 3 Ors

PURTIPRASADPARABDigitally signed byPURTI PRASADPARABDate: 2021.12.2310:11:36 +0530 IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION WRIT PETITION NO. 3312 OF 2021ALONGWITHWRIT PETITION NO. 3332 OF 2021ALONGWITHWRIT PETITION NO. 3299 OF 2021ALONGWITHWRIT PETITION NO. 3365 OF 2021ALONGWITHWRIT PETITION NO. 2358 OF 2021ALONGWITHWRIT PETITION NO. 2360 OF 2021ALONGWITHWRIT PETITION NO. 3270 OF 2021ALONGWITH WRIT PETITION NO. 3174 OF 2021 Jayantilal K. Bhagat V/s.Asstt. Commissioner of IncomeTax Circle -22(1) and Ors. ….Petitioner …Respondents ---- Mr. P.S. Jetly, Senior Advocate a/w Mr. Sameer G. Dalal i/b Ms. Monika Dokhale Walve for Petitioner.Mr. Akhileshwar Sharma for Respondents-Revenue. ---- CORAM : K.R. SHRIRAM &AMIT B. BORKAR, JJ. DATED : 15[th] DECEMBER 2021 AMIT B. BORKAR, JJ. P.C. : 1.This is a group of eight petitions impugning the decision of theauthority in rejecting the declaration filed by petitioner under the Direct TaxVivad Se Vishwas Act, 2020 (the DTVSV Act) for the A.Y. 1983-84, 1984-85,1985-86, 1986-87, 1987-88, 1988-89, 1989-90 and 2006-07. 2.Petitioner claims to be the son and legal heir of one KalyanjiBhagat (deceased) who expired in the year 1993. Kalyanji Bhagat at thetime of his death, left behind five legal heirs namely, his widow, three sonsSuresh Bhagat, Jayantilal Bhagat (who is also petitioner) and Vinod Bhagat,and a married daughter Mrs. Shah. The five legal heirs decided amongstthemselves that one of them should be authorised by way of Power ofAttorney to handle all the tax affairs of Kalyanji Bhagat as there has beensearch operation conducted against Kalyanji Bhagat under Section 132 ofthe Income Tax Act, 1961 (the Act). There were other proceedings alsopending. 3.Suresh Bhagat who was solely handling the tax affairs of lateKalyanji Bhagat expired in the year 2008. It is stated that thereafter nobodywas really looking into the affairs. When the DTVSV Act came into force,the family of Kalyanji Bhagat decided to take advantage of the schemeunder the DTVSV Act. 4.Petitioner took charge of the affairs and after obtaining certifiedcopy of the orders passed for the assessment years mentioned in paragraphno.1 above against late Kalyanji Bhagat, filed appeals before the Income TaxAppellate Tribunal (ITAT). 5.Mr. Jetly submitted that petitioner filed declaration in Form 1under the DTVSV Act for each assessment year separately. Respondent didnot issue him Form 3 but instead addressed an E-mail dated 9[th] April, 2021giving year wise reasons for rejection of petitioner’s applications. A copy ofthe said E-mail is annexed to the petitions and is impugned in all thesepetitions. 6.We have considered the said E-mail with the assistance ofMr.Jetly and the rejection has been on two counts, (a) that there is noclarity of Legal Heir status till date as per the record available in the officeand hence there is no locus standi; and (b) the appeal is stated to havebeen filed on 23[rd] December, 2020 after a gap of nine years which is beyondthe time. 7.Mr. Sharma vehemently opposed the objections, but after sometime, in fairness concurred that the Legal Heir Status could not be a validreason for rejecting the declarations. If Revenue accept the declarations, inour view, it would not amount to certifying the entitlement of petitioner tothe estate of deceased. Petitioner, who claims to be the legal heir ofdeceased Kalyanji Bhagat, only wants to put end to all the appeals which arepending relating to the assessment of late Kalyanji Bhagat. Mr. Sharma alsoagreed that Revenue accepting the declarations filed by petitioner alsocannot be useful to petitioner to claim entitlement to the estate of late Kalyanji Bhagat. Therefore, the rejection on this ground is not correct.That leaves the second ground to be considered. 7.Mr. Sharma vehemently opposed the objections, but after sometime, in fairness concurred that the Legal Heir Status could not be a validreason for rejecting the declarations. If Revenue accept the declarations, inour view, it would not amount to certifying the entitlement of petitioner tothe estate of deceased. Petitioner, who claims to be the legal heir ofdeceased Kalyanji Bhagat, only wants to put end to all the appeals which arepending relating to the assessment of late Kalyanji Bhagat. Mr. Sharma alsoagreed that Revenue accepting the declarations filed by petitioner alsocannot be useful to petitioner to claim entitlement to the estate of late Kalyanji Bhagat. Therefore, the rejection on this ground is not correct.That leaves the second ground to be considered. 8.First of all, the authority who reviews or considers thedeclarations under the DTVSV Act is not empowered to decide the appealswhich have been filed before the ITAT on behalf of deceased KalyanjiBhagat. The said officer cannot adjudicate on the maintainability of theappeals and state that the appeals have been filed beyond time. It ispetitioner’s case in these appeals that it is filed within time and at therelevant time the ITAT may decide it as it deems fit. 9.Mr. Jetly submitted that petitioner’s case for the declarationfiled under the DTVSV Act would be covered under Section 2(1)(a)(ii) ofthe DTVSV Act which reads as under : 2. (1) In this Act, unless the context otherwise requires,— (a) “appellant” means—(i)xxxxx(i)xxxxx (ii)a person in whose case an order has been passed by the Assessing Officer, or an order has been passed by the Commissioner (Appeals) or the Income Tax Appellate Tribunal in an appeal, or by the High Court in a writ petition, on or before the specified date, and the time for filing any appeal or special leave petition against such order by that person has not expired as on that date.passed by the Assessing Officer, or an order has been passed by the Commissioner (Appeals) or the Income Tax Appellate Tribunal in an appeal, or by the High Court in a writ petition, on or before the specified date, and the time for filing any appeal or special leave petition against such order by that person has not expired as on that date. 10. Mr. Jetly submitted that the twin requirements as applicable to Petitioner under this provision are (a) an order has been passed by theCommissioner (Appeals) on or before the specified date and (b) the time for filing any appeal against such order by that person has not expired onthat date. The specified date, Mr. Jetly submitted, under clause (n) of SubSection (1) of Section (2) of the DTVSV Act was 31[st] January, 2020 and allthe orders were passed in 2011 and therefore the first condition has beenmet. As regards the second condition, Mr. Jetly submitted that anappeal against the order of the Commissioner (Appeals) has to be filedwithin 60 days of the conclusion of the appeal. According to Mr. Jetly theorder was communicated to petitioner only on 17[th] December, 2020 and thetime to file the appeals was to expire on or about 15[th] February, 2021 andthe declarations were filed on or about 13[th] January, 2021. Therefore,second condition has also been met. 11.Mr. Sharma submitted that one Tanuja Bhagat on behalf ofdeceased Kalyanji Bhagat had applied under the provisions of the Right ToInformation Act, 2005 for copies of these orders for the assessment yearsmentioned above and these were provided some time in circa 2017.Therefore, petitioner’s contention that time for filing appeal had not expiredas on the date of filing the declaration is not correct. 12.Mr. Jetly tendered a copy of order passed by the ITAT in twoWealth Tax Appeals concerning deceased Kalyanji Bhagat. Mr.Jetly 11.Mr. Sharma submitted that one Tanuja Bhagat on behalf ofdeceased Kalyanji Bhagat had applied under the provisions of the Right ToInformation Act, 2005 for copies of these orders for the assessment yearsmentioned above and these were provided some time in circa 2017.Therefore, petitioner’s contention that time for filing appeal had not expiredas on the date of filing the declaration is not correct. 12.Mr. Jetly tendered a copy of order passed by the ITAT in twoWealth Tax Appeals concerning deceased Kalyanji Bhagat. Mr.Jetly submitted that these Wealth Tax Appeals were also filed on the same dateon identical facts regarding date of receipt of order and the ITAT in its orderdated 2[nd] March, 2021 has accepted the explanation of appellant as to whythey could not participate in the proceedings earlier and the ordersimpugned in these appeals have been set aside and the matters have beenremanded for denovo consideration to the Commissioner of Wealth Tax(Appeals). Mr.Jetly therefore submitted that the contention of respondentthat the appeals were filed beyond time is not correct. 13.It is petitioner’s case that the legal heirs of the deceasedKalyanji Bhagat, by Power of Attorney dated 10[th] November, 1993,appointed Suresh Bhagat son of deceased Kalyanji Bhagat as ConstitutedAttorney and it was Suresh Bhagat who was pursuing all the appeals andproceedings arising from the assessments against the deceased KalyanjiBhagat. On 13[th] June, 2008 Suresh Bhagat died and as he was the onlyperson who was conversant with the facts and pending proceedings and ashis name was represented as legal representative of deceased KalyanjiBhagat in all the proceedings, revenue authority did not entertain any otherlegal heirs of deceased Kalyanji Bhagat because none of the legal heirsreceived any communication from the revenue. It is also alleged thatsudden death of Suresh Bhagat created a vacuum and the other legal heirsof Kalyanji Bhagat were unaware as to the facts of Kalyanji Bhagat’s caseand status of proceedings pending in different forums. 14.In the year 2018, Revenue Authorities initiated recoveryproceedings against estate of deceased Kalyanji Bhagat in the hands of otherlegal heirs and sought auction of the properties in the hands of the legalheirs. Proceedings of recovery of income tax dues of the deceased KalyanjiBhagat were also initiated against petitioner as the legal heir of KalyanjiBhagat and these proceedings were challenged in this court by way of twoWrit Petitions. By orders passed on 28[th] February, 2018 and 13[th] March,2018 this court disposed these Writ Petitions with directions to the PrincipalCommissioner of Income Tax – 20 to hear petitioner’s appeal filed underRule 86 Schedule II of the Act. It is also averred in the petition that duringthe course of hearing of these appeals Respondent No.2 initiated someactions including reference to valuation cell, constitution of Task Force todetermine the correct amount of tax arrears of the deceased assessee etc.Due to change in jurisdiction, these appeals are pending before RespondentNo.2 even as on the date of filing of the petition. As the RevenueAuthorities were not having complete records including assessment order,notice of demand issued against deceased Kalyanji Bhagat etc., Task Forceappointed by Respondent No.2 after co-ordinating with various wards/offices of the Income Tax Department tried to ascertain the correct taxliability of the deceased Kalyanji Bhagat in the course of the proceedings.Petitioner states that while co-ordinating with the Task Force constituted,some time in the year 2019, petitioner, for the first time, learnt that CIT (A) – 29, Mumbai had passed ex parte appellate orders in 2011. – 29, Mumbai had passed ex parte appellate orders in 2011. 15.In the meanwhile, after two petitions referred above weredisposed by this court in February/March, 2018, petitioner requested thedepartment to provide petitioner with the quantum and nature of arrearsand breakup of the tax arrears regarding deceased Kalyanji Bhagat. Due tovarious internal changes in the department where wards and ranges weremerged, recast or abolished or officers were transferred petitioner could notget all the details or documents. 16.On 15[th] January, 2019 Principal Commissioner – 21, Mumbaiwho had jurisdiction over the case of deceased Kalyanji Bhagat fixed hearingbefore him on 25[th] January, 2019. In the course of hearing it was deemedproper and in the interest of justice to constitute a task force to determinethe nature and break up of demands due as the matter was about 30 yearsold and even the Principal Commissioner of Income Tax had difficulty todetermine the correct tax liability of the deceased Kalyanji Bhagat. Butbefore the matter could be decided by the Principal Commissioner ofIncome Tax, Range – 21 was abolished and thereafter merged with Range –22 and thereafter the Head of Range – 22 was transferred. In the absenceof Range Head at Range – 22 it is stated that petitioner had difficulty in co-ordinating with various offices of the department and petitioner wasregularly co-ordinating with Range – 22. It is petitioner’s case that lot oftime was spent or lost in co-ordinating with the various department ofRevenue to procure documents/details including certified copies of the appellate orders which were required to file the appeals and proceed furtherafter ascertaining the correct liability of the deceased Kalyanji Bhagat.Mr. Jetly submitted that even though in 2017 Tanuja Bhagat, daughter ofpetitioner had received copies of orders through the Right To InformationAct, 2005, the same was not sufficient to file the appeal before the ITAT inthe absence of other details, documents and without verifying the same. Mr.Jetly submitted that finally all documents were received only on 17[th]December, 2020 and 60 days required to file appeal would have expired on16[th] February, 2021 and the declaration in Form 1 was filed on 13[th] January,2021 and hence the second condition required under Section 2(1)(a)(ii) ofthe DTVSV Act, i.e., the time for filing the appeal has not expired as on thedate of filing the declaration. Mr. Jetly concluded that therefore, therejection of petitioner’s application on the ground of it being time barred isincorrect. 17.Mr. Sharma submitted that nothing prevented petitioner fromapplying for certified copies of all the documents in 2017 itself and the courttherefore should not accept Mr. Jetly’s submissions. 18.We have considered the affidavit in reply as well in which thesubmissions is based primarily in the lines submitted by Mr. Sharma. In thereply, Revenue is not denying the fact that the task force was created on twooccasions and notwithstanding the appointment of task force, petitioner’s were not able to get documents on time because of various organisationalchanges in the department. In the reply it is stated that in the absence ofany material or documents in the Writ Petition, no credence could be givento the averment that the Task Force apparently constituted in the course ofrecovery proceedings appointed by Respondent No.2 could not provide acopy of the order passed by CIT (A) in September, 2011. Certainly, if onlythe affiant had gone through the files, he would have noted the notings inthe file and he could have filed copy of the notings or the order sheets in thefile, if according to him petitioner’s averment in the petition was not correct.Respondents cannot simply skirt their responsibility by putting onus onpetitioner to provide some documents constituting the task force. 19.Therefore, from the facts as narrated above, we find that thetime for filing the appeals against the order of CIT (A) had not expired as onthe date of filing the declaration. 19.Therefore, from the facts as narrated above, we find that thetime for filing the appeals against the order of CIT (A) had not expired as onthe date of filing the declaration. 20.Therefore, in the peculiar facts and circumstances of the case,the rejection of the declaration by petitioner under the DTVSV Act is notcorrect. 21.We hope the authorities will keep in mind the objective of theDTVSV Act, which is the Act to provide for resolution of disputed tax and formatters concluded there with or incidental thereto. Here is the legal heir who wants to put an end or wants of closure to all the disputes between the deceased Kalyanji Bhagat who was his father and the tax authorities. Wefail to understand why Revenue is rejecting these declarations without properly considering the facts and circumstances of the case. 22.All the petitions therefore has to be allowed, and are hereby allowed, in terms of prayer clause – (a) and (b) which reads as under : (a)that this Honourable Court be pleased to issue anyappropriate Writ, order or direction under Article 226 of theConstitution of India, quash and set aside the order ofrejection dated 9[th] April 2021 (Exhibit “H”) passed byRespondent No.2 on the application filed by the Petitionerbefore him under the Direct Tax Vivad Se Vishwas Act, 2020; (b)that this Honourable Court be pleased to issue anyappropriate Writ, order or direction under Article 226 of theConstitution of India, directing Respondent Nos.1 & 2 toverify the declaration filed by the Petitioner under section 4(1) of the Direct Tax Vivad Se Vishwas Act, 2020 dated 13[th]January 2021 – Form No.1 and 2 (Exhibit “G”) and directRespondent No.2 to issue Form No.3 determining the taxpayable by the Petitioner under section 3 of the Direct TaxVivad Se Vishwas Act, 2020. 23. We will only note that this order cannot be used by petitioner in any proceedings between petitioner and the legal heirs of late Kalyanji Bhagat to lay claim to any estate of deceased Kalyanji Bhagat if there areany such proceedings/disputes pending or may arise in future. 24.Petitions disposed. (AMIT B. BORKAR, J.) (K.R. SHRIRAM, J.)