Chandrakala Kasani V. The Principal Commissioner of Income Tax 2, Hyderabad

WP/18470/2023

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The case involves Chandrakala Kasani, the petitioner, who sought a writ of mandamus to compel the Principal Commissioner of Income Tax, Hyderabad, to issue Form 5 under the Direct Tax Vivad Se Vishwas Act, 2020. This request was based on the petitioner's partial compliance with the payment schedule under the Act, despite a two-month delay in the final payment due to the COVID-19 pandemic. The respondent had refused to issue Form 5, citing lack of authority post the cutoff date. The court considered precedents from the High Courts of Rajasthan and Delhi, which had allowed similar petitions under extraordinary circumstances, and decided in favor of the petitioner.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 796621 (HC-TELANGANA)
• Appeal Type: Others
• Pronouncement Date: 27-12-2023
• Assessment Year: misc
• Other Referred Cases: Agroha Electronics vs. Union of India, I.A. Housing Solution Private Limited vs. Principal Commissioner of Income Tax
• Laws Referred To: Direct Tax Vivad Se Vishwas Act, 2020, Article 226 of the Constitution of India
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: SUNDARI R PISUPATI
• Assessee Lawyers: P SOMASHEKAR REDDY
• Keywords: Covid-19; Delay in payment; Direct Tax Vivad Se Vishwas Act; Form 5; Writ of Mandamus
• Section: 151 CPC

Judgement Text

"[ 337e ] HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD (Special Original Jurisdiction) WEDNESDAY, THE TWENTY SEVENTH DAY OF DECEMBER TWO THOUSAND AND TWENTY THREE PRESENT THE HON'BLE SRI JUSTICE P. SAM KOSHY AND THE HON'BLE SRI JUSTICE N. TUKARAMJI WRIT PETITI ON NO: 18470 OF 2023 Between: Chandrakala Kasani,, Dlo PAN.AFCPK8546E Rt/O H.NO. Hyderabad. Telangana, 500090 Muthvalu Komaravinna 57 Years 1-50. 6achupally, Quthubullapur Mandal, ...PETITIONER AND The Principal Commissioner of lncome Tax 2, Hyderabad lncome Tax Towers, lviasab Tank, Hyderabad. Telangana -500004 ...RES'.NDENT 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 Direction, more particularly one in a nature of writ of Mandamus, by directing the Respondent to issue Form 5 under the Direct Tax Vivad Se Vishwas Acl, 2O2O in view of the total payments made by the Petitioner herein as per Form-3 amounting to Rs. 1,21,38,8741 (Rupees One Crore Twenty-One Thirty-Eight Lakhs Eight Hundred Seventy-Four Only) by condoning a delay of 2 months in payment of part of the amount. lA NO: 1 OF 23 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 be pleased to direct {he Respondent herein, to keep the demand in abeyance till the settlement of dispute of tax arrears under lhe Direct Tax Vivad Se Vishwas Act, 2020 in the interest of lustice 7 IAN i 20F 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 pleased to vacate the interim order granted on 14loll2O23 in lA 1 of 2023 in WP 18470 of 2023 Counsel for the Petitioner: SRI P SOMA SHEKAR REDDY Counsel for Respondents: SMT. SUNDARI R PISUPATI SR.SC FOR INCOME TAX DEPARTMENT The Court made the following: ORDER -aa 3 I THE HON'BLE SRI JUSTICE P.SAM KOSHY AND THE HON'BLE SRI JUSTICE N.TUKARAMJI WRJT PETITIO N No.1847O of2o23 ORDER iber Hon'ble Si Justice P.SAM KOSHY) The instant writ petition has been filed seeking for a direction to the respondent to issue Vishwas Act, 2O2O. Form 5 under the Direct Tax Vivad Se 2. Heard Mr. P. Soma Shekar Reddy, Iearned counsel for the petitioner and Ms. Sundari R Pisupati, learned Senior Standing Counsel for Income Tax Department appearing for the respondent' 3. From the pleadings it appears that the petitioner in order to avail the benefit of the scheme under Direct Tax Vivad Se Vishwas Act,2O2O, was required to make a payment of Rs' 1,1O,35'340/ - up tilt 31.03.202 1 and with interest at the rate of lO%o amount of Rs. 1,21,38,874l- uP till 3l.rO.2O2l' 4, As is known to all, the said period was one when the whole world was reeling with COVID pandemic There were compelling circumstances for the business world in making payments all around' Nonetheless, under the aforesaid scheme, the petitioner was able to Ii 4 make 7 5o/o of the payment out of the total of Rs. 1,21,38,874/- i.e. Rs.90,OO,000/- by 3I.10.2021 itself which is admitted by the respondent in their Counter as well. In terms of the aforesaid scheme, there was only balance of 25o/o amount payable by the petitioner which in the instant case has also been paid by the petitioner on 31.12.2021 i.e. which is within sixty (60) days time from the date the payment of the 7 5o/o earlier made. Thus, there appears to be delayed payment of just 25olo of the amount by the petitioner and that too of a period which is around two (2) months. lt is in this context when the petitioner approached the respondent for issuance of Form 5 the same was rcfused on the ground that that the respondent do not have power for issuance of Form 5 beyond the cutoff date leading to filing of the instant writ petition. 5. The High Court of Rajasthan in the case of Agroha Electronlcs ys. Union OJ India and. Ors. r under similar circumstances particularly in respect of the fact that the transaction therein was also under the COVID period had while allowing the writ petition in favour of the petitioner held as under: \"After hearing learned counsel {or the parties and perusing the material available on record, this Court a.\"-\" ii fit tt,.t in the given facts arrd circumsta;rces that the petitioner is a ' s.8. Civit w.it petition No. LOiTt/2o2}dated 2S.03.2021 of the High Coun of Rajasthan -7 5 6. A similar issue came up before the High Court of Delhi in the case of I.A. Houslng Solation Prtuate Llmited Vs' Principal Commissloner of Income Tax'tP decided on O2' 1 l '2022 wherein the High Court of Delhi in paragraph Nos l9 !o 24 had held as under: bona fide businessman and is prepared to pay the amount in question in accordance wlth the scheme along witJl inteiest for the period which he has defaulted in scheme and Iooking into the extreme pandemic conditions of COVID and the dJath of petitioner's father, this is a ht case {or invocation of tl.e powers under Article 226 of the Constitution of India.\" '19. One of us (Manmoha-n, J) in Siddharth lnternational Public Schoot v. ilotor Accident Claim Tribunal, (20I6) SCC O\"Li\"\" O\"f 4797 , para 4 l has held, \" it is settled laut that n* Coun trls extremety broad jurisdiction under Ariicle 226 of thE Con-stitution and under the said Article it can pass ihot\"u\", ord.ers ore necessary for doing equitg and justice' Th, Srpr\"^\" Court in N.S. Miraikar D' State of ^Malrurashtra' lgAA S SCn 744 hl:s held that \"unlike a iaferior court' in ,\"ip.\"l ,f \" High Court, uLhich is also a Court of Reard' it i's ;;\"r*i tLat\"euery action is ruithin its juisdiction' unless expresslg shoun otheruise\" ' 20. Consequently, the power of the High Court under iiti.t zzo or tni c\".,\"titution of lndia to grant relief in extraordinary and exceptional circumstances cannot be taken away or curtailed by any legislatioh' 21. In fact, the Supreme Court in DaI Chandra Rastogi v' CBDT (2019) 104 taxmann.com 34I (SC) wherein the assessee hai ftta a declaration of undisclosed income ,rrrJ\". tfr\" Income Declaration Scheme,2O16 and had failed to f\"y tt \" third installment of the remaining 5o per cent of iL] -J\".lnrtg\" and pena-lty permitted the assessee to make i.t\" a\"p*it- of t\"* und\"i Income Declaration Scheme \"G\"\"i'J i.a\"rest at the rate of 12o/o per annum lt is ;;;;;;L m\"rrtion that there was no provision for late '?2022 scc onLine Del 3647 :(2023) 330 crR 167 6 deposit of tax in the Income Declaration Schemc, 2O 16. yet the Supreme Court taking note of the genuine hardship faced by the assessee and short delay in payme.rt, ruted in favour of the taxpayer. NO PRE]UDICE CAUSED TO THE RESPONDENTS BY ACCEPTING THE PRAYER OF THE PETITIONERS. RATHER, SUCH ACTION SHALL HELP ACHIEVE THE OBJECTIVES OF THE VSV ACT. 22. This is a_lso a fit case where no prejudice will be caused to the Respondents by accepting the prayer of the Petitioners. Rather, the Respondents benefit and achieve the purpose of the Scheme, narnely, to red.uce pendency of cases, generate timely revenue for the government and provide certainty and savings of resourcei that rvould be spent on the long-drawn litigation process. 23. Consequently as the delay in payment in the present cases were unintentional and supported by justifiable reasons, this Court is of the opinion that the cause of substantial justice deserves to be preferred, a.rtd this unintentional delay desetves to bc condoned. This approach will only further the object and purpose of the VSV Aci. RELIEF 24. Keeping in view the aforesaid, the present writ petitions are allowed and the respondents .ri dir\"ct\"d to accept the declarations/applications (Forms- I and 2) dated O4th March, 2O2l filed. by the petitioners as valid declarations/applications within two weeks and accept the balance disputed amounts as stipulated by respondents in Forms-3 dated OTth May, 2O2l and 2ind June, 2O2l issued under VSV Act along with simple interest @ 9o/o per annum till the date the amounts are paid within foir weeks. 7. Keeping in view the aforesaid two decisions rendered by the High court of Rajasthan as also by the High court of Derhi, if we rook into the facts of the present case, where there appears to be certain payment of tax which was due on the part of the petitioner herein. That under the provisions of Direct Tax Vivad Se Vishwas Act,2O2O, on an application made by the petitioner, the respondent had offered 7 for settlement of the said case by payment of Rs. i, l o,3S ,3ao / _ by 31.03.202I.If for any reason the amount was not able to be paid by the said date, the pedtioner would be required to make a payment of Rs. 1,21,3g,g7a/_ by. 31.1O.2O21. OI rhis amounr, rhe peririoner admittedly paid Rs.9O,00,0OO/- on 31 .10.2O21i.e. the petirioner had paid about Z So/o of the amount payabie by him. 8. We cannot brush aside the fact that it was admitt€dly COVID pandemic period and there were compelling circumstances faced by every person including the business entities. Nonetheless, the petltioner herein had cleared the balance of 25%o as well within a further period ol sixty (60) days i.e. 31.12.2021 clearing rhe enrire amount payable by him i.e. balance amount of Rs.31,3g,g 74/_ which was the total amount payable by him by 31.1O.2O21. 9. Thus, pima facie, we are of the considered opinion that the petitioner had not tried to evade payment of tax at any point of time and if at all there is any delay, the delay is only to the extent of 2s%o of the total tax payable which too he has paid in its entire[z within sixty (60) days beyond the date of 31.10.2021. 10. In the given factual circumstances, we are inclined to endorse the views taken by the High Court of Rajasthan as a.lso by the High Court of Delhi in the aforesaid two decisions referred above. And as a 8 consequence, we are inclined to allow the writ petition with a direction to the respondent to rmmediateiy take necessary steps for issuance of Form 5 under the Direct Tax Vivad Se Vishwas Act' 2O2O ' However' the petitioner would be liabre to make paymerrt of extra payment of interest for the period 3l 'lO '2021 to 3l'12'2021 for the amount which was paid belatedly on 3l '12'2021 within a period of thirty (30) days from today. Immediately upon the petitioner making payment' the respondent shall issue Form 5 to the petitioner forthwith' 11. The writ petition accordingly stands allowed' No order as to costs Consequently, miscellaneous petitions, pending if any' shall stand closed. //TRUE COPY// SD/.B, SARASWATH] ASSrsrANr,S:rsrRAR SECTION OFFICER To, Buildings, Hyderabad. 5. one CC to Sri p Soma Shekar Reddy Advocate tOpUCl ,\"iF-f eff'3,.,',ti^\"'v3:3ltffJ'rti\"i(sn'sc*FiiR}vcoiurernx GJP fr\"rq^ One Fair Copy to THE HON'BLE SRI JUSTICE P' SAM KOSHY -(For His LordshiPs' Kind Perusal) One Fair Copy to THE HON'BLE SRI JUSTICE N. TUKRAMJI ' (For His LordshiPs' Kind Perusal) 1. The Princioal Commissioner of lncome Tax 2, Hyderabad lncome Tax Towers, Iilasab Tank, Hyderabad. Telangana -500004 2. 1'1 LRCoPies. g. fhe UnO€;r Secretary, Union of lndia Ministry of Law, Justice and Company Affairs, New Delhi. +. ine Secretary, Telangana Advocates' Association Library, High Court : I I 'i I -'- -'----. i HIGH COURT DATED: 2711212023 { 6E STAI€ 2 3 JIN 2[21 v o .b j. .t- q J o o + D ii ORDER WP.No.18470 of 2023 ALLOWING THE WRIT PETITION WTHOUI COSTS r.-L t [r-tt - "