An appeal remains 'pending' under the VSV Act despite being filed late or being deemed incompetent, as eligibility for settlement is based solely on pendency.

JUDGMENT

Manmohan, J. Present writ petition has been filed by the petitioner challenging the action of respondent No.1 in partially settling dispute relating to penalty for Assessment Year 2014-15 pending before the Income Tax Act Tribunal (for short `ITAT') under the Vivad Se Vishwas Scheme (for short `VSV Scheme') without settling the dispute relating to quantum appeal for Assessment Year 2014-15 pending before the Commissioner of Income Tax (Appeals) [(for short `CIT(A)']. ARGUMENTS ON BEHALF OF THE PETITIONER

2. Learned counsel for the petitioner stated that respondent No.1 erred in holding that petitioner was ineligible to settle the quantum appeal for Assessment Year 2014-15 pending before CIT(A) on the grounds that (i) appeal had been filed before CIT(A) after limitation period for filing the appeal had expired, (ii) FAQ-59 did not cover the case of the petitioner and (iii) an order under Section 249(3) condoning delay was necessary for eligibility under VSV Act. The relevant portion of the impugned order dated 23rd January, 2021 is reproduced hereinbelow:

"CREDIT IN FORM 3 HAS BEEN GIVEN PROVISIONALLY ON THE BASIS OF OLTAS DATA. AO SHOULD ENSURE CONSUMPTIOIN OF ALL CHALLAS AGAINST CORRECT DEMANDS IMMEDIATELY. In this case penalty u/s 271(1)(c) of Rs.74290830/- was imposed which was confirmed by CIT(A) and appeal against the same is pending in ITAT. In respect of quantum, the AO passed order on 22.12.2016, as per Form-35. It was served on 23.06.2017 and appeal was filed on 24.05.2019, which is late appeal. FAQ 59 does not cover assesssee's case. Therefore, only penalty appeal is being settled on payment of 25% of penalty amount. Form 3 has been issued accordingly."

3. Learned counsel for the petitioner submitted that the respondent No.1 erred in not appreciating that in terms of the Section 2(1)(a)(i) read with Section 2(1)(b) read with Section 2(1)(n) of the VSV Act, the only requirement for being eligible to settle a dispute under the VSV Scheme was that the appeal should be "pending" before an appellate forum which includes CIT(A) and ITAT. He pointed out that there was no requirement that the appeal should be filed in time or that the appeal should have been `admitted' before the specified date. He further submitted that there was no requirement that there had to be a formal order of condonation of delay before the assessee could avail the benefit of the VSV Scheme.

4. In support of his submission, learned counsel for the petitioner relied on the judgment of this Court in the case of Shyam Sunder Sethi vs. PCIT in W.P.(C) 2291/2021 dated 3rd March 2021, wherein it has been held that "An appeal would be "pending" in the context of Section 2(1)(a) of the 2020 Act when it is first filed till its disposal. Section 2(1)(a) of the 2020 Act does not stipulate that the appeal should be admitted before the specified date, it only adverts to its pendency".

5. He further submitted that in any event in the present case the delay in filing the appeal had been condoned by CIT(A), NFAC vide letter dated 20th July, 2021 and the appeal had been admitted. According to him, in such circumstances, appeal against assessment order dated 22nd December, 2016 ought to be considered to have been has been filed on time i.e. by 21st January, 2017 (before specified date 31st January, 2020) as it is settled law that condonation of delay whenever is accepted by