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IN THE HIGH COURT OF DELHI AT NEW DELHI
Rajiv Shakdher, Tara Vitasta Ganju, JJ.
Ardent Info Systems Pvt. Ltd. – Appellant
Versus
Principal Commissioner of Income Tax-1 & Ors. – Respondents
W.P.(C) 5649 of 2021
Decided On : 21-04-2023
Direct Tax Vivad Se Vishwas Act - Rejection of Declarations - Section 143(1) of the Income Tax Act, 1961 - Section 147, Section 144 of the 1961 Act - Circular No.20/2016 dated 26.05.2016 - Section 254(2) of the 1961 Act - Section 2(n) of the 2020 Act
Fact of the Case:
The writ petition challenges rejection orders passed by the designated authority under the Direct Tax Vivad Se Vishwas Act, 2020. The rejection was based on the ground that the petitioner's appeal was not pending before the Income Tax Appellate Tribunal or the Commissioner of Income Tax (Appeals) on the specified date. The petitioner had a complex history of appeals, remand orders, and fresh appeals, leading to the rejection of its declarations under the 2020 Act.
Finding of the Court:
The court found that the petitioner's appeal was pending on the specified date, contrary to the rejection orders by the designated authority. The court criticized the simplistic view taken by the Tribunal and held that the petitioner should not suffer due to its lawyer's mistake. The impugned orders were set aside, and the designated authority was directed to progress the declarations made by the petitioner in accordance with the provisions of the 2020 Act.
Issues: The main issue was whether the petitioner's appeal was pending on the specified date under the 2020 Act. The court also addressed the impact of remand orders, condonation of delay, and the petitioner's inadvertent mistakes.
Ratio Decidendi: The court emphasized that the provisions of the 2020 Act should be construed liberally, and the petitioner should not suffer due to procedural complexities or inadvertent mistakes. It held that the appeal was pending on the specified date, considering the history of appeals and the condonation of delay by the Tribunal.
Final Decision: The impugned orders were set aside, and the designated authority was directed to progress the declarations made by the petitioner in accordance with the provisions of the 2020 Act.
JUDGMENT
[Physical Hearing/Hybrid Hearing (as per request)]
Rajiv Shakdher, J. (Oral):
CM APPL. 17597/2021
1. Allowed, subject to just exceptions.
W.P.(C) 5649/2021
2. This writ petition is directed against three rejection orders passed by respondent no.1, which is the designated authority under the Direct Tax Vivad Se Vishwas Act, 2020 [in short, "2020 Act"].
3. The three rejection orders which have been assailed are dated 31.01.2021, 25.03.2021 and 09.04.2021. The orders are almost identical in their width and scope.
4. However, as is evident on a bare perusal of the said orders, these orders came to be passed on account of declarations made by the petitioner on various dates.
4.1 Thus, insofar as the rejection order dated 31.01.2021 is concerned, a declaration in the prescribed form i.e., Form-1 and Form-2 under the 2020 Act, was made on 21.11.2020.
4.2 Likewise, as regards the rejection order dated 25.03.2021 is concerned, the declaration was filed, as indicated above, on 31.01.2021.
4.3 Similarly, the third declaration was filed by the petitioner, once again, in the prescribed form on 25.03.2021, which was rejected on 09.04.2021.
5. The ground on which the petitioner's declarations were rejected was that on the specified date i.e., 31.01.2020, its appeal was not pending.
6. To appreciate the issue at hand, which is: whether or not the appeal was pending either before the Income Tax Appellate Tribunal [in short, "Tribunal"] or the first appellant authority i.e., the Commissioner of Income Tax (Appeals) [in short, "CIT(A)"]- the following broad facts are required to be noticed.
6.1 The petitioner had filed its return for Assessment Year 2008-09 on 31.03.2009.
6.2 The return was processed under Section 143(1) of the Income Tax Act, 1961 [in short, "1961 Act"].
6.3 On 23.03.2015, a notice under Section 148 of the 1961 Act was issued.
6.4 Consequentially, respondent no.2 passed an assessment order on 16.03.2016 under Section 147, read with Section 144 of the 1961 Act. Resultantly, the petitioner's income chargeable to tax was reassessed and pegged at Rs.20,32,181/-.
6.5 Since the petitioner was dissatisfied with the outcome in the reassessment proceedings, it preferred an appeal, albeit, in physical form as against an appeal in digital mode on 28.04.2016. This appeal was lodged before respondent no.3.
6.6 It appears that the petitioner, in line with CBDT's Circular No.20/2016 dated 26.05.2016, filed an appeal with respondent no.3 via online mode as well. This appeal was uploaded on 07.06.2017.
6.7 Respondent no.3, on 06.07.2018, passed two separate orders. The first order concerned the appeal filed by the petitioner in physical mode, (i.e., Appeal No.79/16-17). This appeal was dismissed on the ground that an appeal filed in physical form was not viable i.e., could not be entertained.
6.8. The second order which was passed by respondent no.3 concerned the appeal (i.e., Appeal No.39/17-18), which had been preferred digital mode. This order considered the petitioner's case on merits. Respondent no.3, however, disagreed with the petitioner, and thereby sustained the reassessment order dated 16.03.2016 passed by respondent no.2.
7. As would be evident, there were two orders available on record, of even date i.e., 06.07.2018. The petitioner, it appears, made things difficult for itself, inasmuch as, while filing an appeal against the order passed by respondent no.3 with the Tribunal, it appended the order passed by respondent no.3 on its appeal preferred in physical form.
8. We are informed that the petitioner had preferred an appeal with the Tribunal on 11.09.2018.
8.1 The Tribunal via order dated 01.04.2019 set aside the order dated 06.07.2018 passed in Appeal No.79/16-17, which was the order passed in the appeal preferred by the petitioner in physical form, and remanded the matter to respondent no.3.
8.2 Pertinently, this order was passed by the Tribunal without the petitioner being represented on the said date. It appears th
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