The circular excluding appeals against orders under section 143(1)(a)(i) or (ii) from the DTVSV scheme was unsustainable and set it aside.

JUDGMENT

Sunil P. Deshmukh, J. - Rule. Rule is made returnable forthwith. Heard learned Counsel appearing for the parties finally, by consent.

2. The petitioner-trust aggrieved by the communication on the website/portal of the Income Tax Department, rejecting declaration Form No.1 filed by the petitioner on 30/12/2020 under the Direct Tax Vivad Se Vishwas Act, 2020 (for short, hereinafter referred to as 'DTVSV Act') and the Direct Vivad Se Vishwas Rules, is before us.

3. The petitioner's case is that it is a registered charitable trust. It had filed return of income for financial year 2009-10 - assessment year 2010-11, belatedly disclosing income to be 'Nil'. Subsequently, an intimation/computation sheet purporting to be under section 143(1) of the Income Tax Act, 1961 ( IT Act ) had been received at its end on 22nd December, 2012, determining income of Rs.69,36,357/- and total tax liability to the tune of Rs.19,84,908/- with interest thereon totalling to Rs.31,83,240/-. It has been referred to by the petitioner that while preparing the return of income, audit report in Form No.10B was also prepared but the same remained to be filed along with the return of income. According to petitioner, there have been no reasons coming forth as to why the exemption under section 11 of the Act was disallowed or the adjustments could not have been made in the intimation under section 143(1)(a) of the IT Act.

4. Against aforesaid intimation, the petitioner preferred an appeal with the Commissioner of Income Tax (Appeals)-1, Mumbai ( CIT-A ) in November, 2018.

5. The appeal was dismissed on 31st January, 2020 on the ground of filing of the return belatedly.

6. Mr. Dharan Gandhi, learned counsel for the Petitioner states that in the meanwhile, the Direct Tax Vivad Se Vishwas Act, 2020, had been enacted ( hereinafter referred to as 'DTVSV' Act) and enforced for resolution of disputed tax and for the matters connected therewith or incidental thereto.

7. The learned counsel for Petitioner submits that against the CIT(A) decision dated 31.01.2020, time limit to file appeal is 60 days under Section 253(1)(a) of the Income Tax Act, 1961 ('IT Act'). A circular bearing No. 9 of 2020 dated 22.04.2020 had been issued by the Respondent No. 2 - CBDT clarifying in answers to questions no.1, 20, 33 & 29 particularly that where an order has been passed by the CIT(A) and time limit to file appeal to the Income Tax Appellate Tribunal ( ITAT ) has not expired, the Petitioner / Appellant is eligible to opt for DTVSV Scheme. He submits that time limit to file an appeal before ITAT had not expired on the specified date under DTVSV Act viz; 31.01.2020. The Petitioner, as such, was eligible to file a declaration as referred to under DTVSV Act and have resolution and settlement of the matter.

8. He submits as the scheme of the DTVSV Act covers the Petitioner's case and the Petitioner had accordingly applied pursuant to the provisions of the DTVSV Act and the rules and submitted Form No.1, giving requisite details referring to that time limit to file appeal before ITAT had not expired and also referring to amount payable under the scheme was Rs. 17,55,984/- and out of which, an amount of Rs. 16,79,770/- had already been paid and as such, net amount payable under the scheme of the DTVSV Act is Rs. 76,240/-.

9. The Petitioner became aware on 29.01.2021 that its declaration in Form No. 1 under the DTVSV Act and the rules has been rejected with following remarks which are re-produced hereinbelow :

"As per the CBDT circular no.21/2020 dated 04/12/2020 clarification given vide question no.71 it is seen that appeals filed against intimation u/s. 143(1) of the Act are eligible under Vivad Se Vishwas if adjustment has been made under sub-clauses (iii) to (vi) of clause (a) of section 143(1) of the Act. In the case of the assessee the adjustment has been made by CPC under sub-clause (ii) of clause (a) of section 143(1) read with explanation (a)(ii) to section 143(1). The application of t