Mahesh Goud Voruganti V. Income Tax Officer, Ward-3, District Nizamabad, Telangana State and The Principal Commissioner of Income Tax-ll, 6th Floor Signature Towers, Kondapur, Opposite Botanical Gardens, Hyderabad

WP/22151/2023

AI Insights

The case involves Mahesh Goud Voruganti, the petitioner, who challenged the order of the Income Tax Appellate Tribunal, Hyderabad, which dismissed his application seeking to revive an earlier appeal concerning income tax assessments. The dispute originated from the income tax assessments for the year 2013-14, where additional income was assessed, leading to a series of appeals and the invocation of the Direct Taxes Vivad Se Vishwas Scheme (DTVSV). The Tribunal initially allowed the withdrawal of the appeal with liberty to reinstate it if the DTVSV application was rejected. However, upon the petitioner's failure to pay the demanded amount within the stipulated time, the Tribunal dismissed his application for revival, citing non-maintainability under Section 25aQ of the Income Tax Act. The High Court found that the Tribunal erred in applying Section 25aQ, as the petitioner's application was not for rectification but for revival of the appeal, which should have been considered under the liberty granted in the Tribunal's earlier order.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 797514 (HC-TELANGANA)
• Appeal Type: Others
• Pronouncement Date: 12-10-2023
• Assessment Year: misc
• Laws Referred To: Article 226 of the Constitution of India, Direct Taxes Vivad Se Vishwas Act, Income Tax Act
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: SUNDARI PISUPATI
• Assessee Lawyers: SRINIVAS GANGISHETTY
• Keywords: Direct Taxes Vivad Se Vishwas Scheme; Income Tax; Income tax appellate tribunal; Revival of Appeal; Writ of Mandamus
• Section: 143(3); 254(2); 151 CPC; 25a Q); 254(21)

Judgement Text

"[ 33861 HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD (Special Original Jurisdiction) THURSDAY, THE TWELFTH DAY OF OCTOBER TWO THOUSAND AND TWENTY THREE PRESENT THE HONOURABLE SRI JUSTICE P.SAM KOSHY AND THE HONOURABLE SRI JUSTICE LAXMI NARAYANA ALtSHETry WRIT PETITION NO: 22151 OF 2023 Between: Mahesh Goud Voruganti, S/o Gandaiah Goud Voruganti, Aged about 41 years, Occ. Business, H.No. 1-9, Thungini, Navipet Mandal, District Nizamabad' Telangana state' ...pETrroNER AND 1. lncome Tax Officer, Ward-3, District Nizamabad, Telangana State. 2. The Principle Commissioner of lncome Tax-ll, 6th Floor Signature Towers, Kondapur, Opposite Botanical Gardens, Hyderabad. ...RESPONDENTS 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 orders, direction or more particularly one in nature of Writ of Mandamus declaring the order dated 1110712023, passed by the Honourable lncome Tax Appellate Tribunal, Hyderabad, Benches SMC, Hyderabad in M.A.No.52|HYD|2O23 in ITA No.37lHYDl2020, is against the provisions of the Direct Taxes Vivad Se Viswas Act and against the provisions lncome Tax Act and set-a-side the said order and direct the Honourable Tribunal to revive the lncome Tax Appeal No.37lHYD/2020. lA NO: 1 OF 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 to stay all further proceedings subsequent to the dismissal of M.A.No.52lHYDl2O23 in ITA No.37/HYD/2020, pending disposal of the Writ Petition. Counsel for the Petitioner: SRI SRINIVAS GANGISHETTI Counsel for the Respondents: SRI SUNDARI R PISUPATI, SR.SC FOR INCOME TAX DEPARTMENT The Court made the following: ORDER HONOURABLE SRI JUSTICE P.SAM KOSHY AND HON'BLE SRI JUSTICE LAXMI NARAYANA ALISHETTY WRIT PETITION No.22151 oL2O23 ORDER: (per Hon'ble S.i Justice l-ox.ni N'arqllana AlishettA) The present writ petition has been filed to issue writ of mandamus declaring the order dated 1 1.O7.2023 passed by the Hon'ble Income Tax Appellate Tribunal, Hyderabad Bench \"SMS\", Hyderabad in MA No.52lHydl2023 in ITA No.37lHyd/ 2O2O and further direction to the Tribunal to revive the ITA No.37 /Hydl2O2O. 2. The briel facts leading to filing of rvrit petition are as under: 3. i'he petitioner is the incomc tax assessee and fi1ed income tax returns for the assessment year 2Ol3-14 on 31.03.2015 declaring total taxable income of Rs.5,20,576/-, which is derived from the life stocks, breds and stocks, Shreshta Bore We1ls, Vasavi Ice Cream Parlour, construction of shed, water and other services and had paid tax of Rs.79,24O l-. The assessment of the petitioner was completed under Section 1a3(3) of the Income Tax Act on 31.03.2016 and the Assessing Officer (A.O.) made an addition of Rs.22,O0,OOO/- to the income declared by the 't PSK,J & LNA,J w.P.No.22151 of 2O2s petitioner i.e., Rs.5,20,580/- and thus, raised the clemand of Rs. 10,28,OO0/- to be paid by the petitioner 4. Aggrieved by the same, petitioner preferred appeal before the Commissioner of Income Tax (Appeals)-S, Hyderabad [for short, CIT(A)1, who vide order dated 25.07 .2017 deleted the addition of Rs.5,63,636/- olut of Rs.22,0O,O00/- and confirmed the balance addition of Rs. 16,36,364/-. 5. Aggrieved by the order of CIT(A), the petitioner approached the Hon'ble Income Tax Appellate Tribunal (for short, TribunalJ and the Tribunal vide order dated 25.O4 .20 18 set aside addition of Rs. 16,36,364/- and directed the A.O., to verify the contentions of assessee. Consequent to the orders of the Appellate Tribunal, the A.O., passed orders on 27.12.2018 confirming addition of Rs. 16,36,364/-. 6. Aggrieved by the said order, petitioner filed appeal before the CIT (A) and by an order dated 18.1 1.2019, the CIT(A) reduced a sum of Rs.3,00,000/- out of Rs. 16,36,3641- and, conl-rrmed the addition of Rs. 13,36,364/-. Aggrieved by the order of CIT(A), petitioner approached the Tribunal on O9.O7.2O2O. While the appeal was pending adjudication, the Government of India announced a scheme in the form of Direct Taxes Vivad Se a / -/ 2 a' PSK,J & LNA,J w.P.No.22 ) 5 ) of 2023 Vishwas Scheme (for short, 'DTVSV'). Petitioner applied under the said scheme and had received Form-3 dated 04.01.2021 from the Income Tax Department raising a demand of Rs.5,75,026/- in accordance with the said scheme. 7. Consequent to the [rling of application under DTVSV Scheme, petitioner approached the Tribunal with a prayer that the petitioner does not want to pr,rrsue the appeal since the petitioner filed Form-I and Form-ll with the Department under the DTVSV and the reply from the Department is awaited. Considering the prayer of the petitioner, the Tribunal vide order dated 20.0 1 .2021 permitted the petitioner to withdraw the appeal and further, granted liberty to petitioner to reinstate the appeal if the application filed by the petitioner under DTVSV scheme is rejected. The operative portion of the Tribunal was reproduced hereunder for ready reference. \"4. After hearing both the parties, according to the request of the assessee and its learned A.R., I hereby allow the appeal of the assessee to be rvithdrawn. I also make it clear that the assessee shall be at liberty to approach the Tribunal within the stipulated time as provided under the Act, in order to reinstate the appeal if the apptication with respect to Vivad se Vishwas Scheme is rejected.\" 8. However, petitioner failed to pay the amount of Rs-5,75,026/- demanded by the Department vide Form-3 dated 3 PSK,J & LNA,J W.P.No 22151 oI 2023 04.Ol .2021 . The petitioner approached the Department on ll .O4.2O23 informing the Department that the proceedings under DTVSV cannot be proceeded with since petitioner could not pay the demand raised under Form-3. Thereafter, petitioner lrled an application No.52/Hyd/2023 in ITA No.37lHyd/2O2O before the Tribunal seeking to recall the order dated 2O.O7.2027 and revive the appeal. However, said application hled by the petitioner was dismissed by the Tribunal vide order dated 11.O7 .2023 with the following observations. \"7. ln view of the above, the miscellaneous application hled by the petitioner is not maintainable as the time granted for rectification, as per Section 25aQ), is within six months and the order was passed by the Tribunal on 2O.O1.2O21, does not suffer from any error. Even otherwise, Sections 3 and 5 under the Vivad Se Vishwas Scheme, 202i provides mandatory dismissal of appeal on issuance of Form No.3.\" 9. The order dated 1 1.O7 .2023 passed by the Tribunal is under challenge in the present writ petition. 10. Heard learned counsel Sri Gangishetty Srinivas for the petitioner and the learned standing counsel Smt. Sundari R Pisupati for the respondent-Department. 1 1. lrarned counsel for petitioner would submit that due to unavoidable circumstances, petitioner could not pay the 4 '.ii*r',*. _=_F.y FY PSK,J & LNA,J w P No 22151 or 2023 amount Rs.5,75,O26/ - demanded by the Department vide Form-3 under DTVSV scheme within stipulated time. He further submitted that Tribunal erred in dismissing the application No.52/Hydl2023 and by wrongly relying on Section 25aQl of the Income Tax Act, as per which, an application for rectification of order of Tribunal has to filed within a period of six months. He further submitted that Section 254(21 has no application to the petition fi1ed by the petitioner, which was liled for revival of the appeal vide ITA No.37 lHydl2O2O. He further submitted that the Tribunal itself vide its orders dated 2O.O1.2O21 had granted liberty to petitioner to seek revival of the appeal if application filed by the petitioner under DTVSV scheme is rejected by the Department. Therefore, the order dated 1 1 .O7 .2023 passed by the Tribunal is erroneous and is Iiable to be set aside. 12. Per contra, learned standing counsel for Department would submit that under Form-3 dated 04.01.2O21, wherein it was determined to pay Rs.5,22,751/ - on or before 31.O3.2O21 or to payRs.S,75,026/- after 31.O3.2021. The time for payment of the said amount was further extended to 3 1 . 1O.2O2 1 . Petitioner failed to comply with the demand of the Department within the stipulated time and further, the time lapsed long I PSK,J & LNA,J W.P.No 22151 of 2023 back and the petitioner approached the Department through his authorized representative on I | .O4 .2023 requesting that the proceedings under DTVSV cannot be proceeded with. She further submitted that petitioner was aware of the default long back having failed to pay the amount within the stipulated time, which expired on 3 1 . 10.202 1. Therefore, there is an inordinate delay on the part of petitioner in approaching the Department as well as Tribunal seeking for revival of the appeal. 13. She further submitted that the application i.e., M.A.No.52l Hydl2o23 was itself hled by the petitioner under Section 25aQ of the Act, therefore, the Tribunal is justified in dismissing the application. As per section 25aQl of the Act, an application for rectification can be filed within the period of six months from the date of receipt of order. Admittedly, the order was passed on 20.O1.2O21, whereas the application i.e., M.A.No.52lHydl2O23 was Iiled on O3.O7.2023 and as such, there is no illegalify in the order passed by the Tribunal in dismissing the said application and no ground is made out to interfere with the order dated 11.O7.2023. 14. Admittedly, the Tribunal vide order dated, 2O.O1.2O27 granted liberly to the petitioner herein to approach the Tribunal 6 .-'$q.:.ri* I PSK,J & LNA,J W.P.No 22151 oI2023 to reinstate the appeal in case application submitted by the petitioner under DTVSV scheme is rejected. It is pertinent to note that the Tribunal had referred to Section 25aQl ol the Act while dismissing M.A.No.52lHydl20223, construing the time limit as six months as stipulated under Section 254(2) of the Act. Section 254(21 of the Act stipulates that an application to rectihcation has to be hled within a period of six months from the date of order. Section 25aQl is reproduced hereunder for ready reference. \"S.254. Orders of Appellate Tribunal.- (1) rcorx (2) The Appellate Tribunal may, at any time within2[six months from the end of the month in which the order was passedl, with a vrew to rectifying any mistake apparent from the record, amend any order passed by it under sub- section (1), and shall make such amendment if the mistake is brought to its notice by the assessee or the Assessing Olficer: Provided that an amendment which has the effect of enhancing an assessment or reducing a refund or otherwise increasing the liability of the assessee, shall not be made under this sub-section unless the Appellate Tribunal has given notice to the assessee of its intention to do so and has allowed the assessee a reasonable opportunity of being heard: Provided further that any application arled by the assessee in this sub-section on or after the 1s day of October, 1998, shall be accompanied by a fee of fiftv rupees. \" 7 PSK,J & I,NA,J W.P.N,.22151 of 2023 15. In considered opinion of this Bench, Section 254(2 of the Act has no application to the petition filed by the petitioner, which was hled for revival of the appeal. Therefore, rectification of an order and revival of an appeal are different and cannot be equated. Though there is delay on the part of the petitioner in approaching the Tribunai, in the considered view of this bench, the petitioner should be afforded an opportunity to pursue his appeal, to meet the ends of justice or else he would be rendered remedyless. 16. Since the application under Section 254(2) itself was not maintainable, using the inherent powers with the Tribunal, they should have treated the application under Section 25a Ql as one seeking revival of the appeal, in the light of the earlier order of the Tribunal dated 20.O1.2021. 17. In the above factual matrix, the order dated 11.07.2023 passed by the Tribunal is set aside and consequently, the application under Section 25aQl is ordered to be treated as an application for revival of the appeal. The Appeal vide I.TA.No.32/Hyd/2O2O is restored and the Appellate Tribunal is directed to dispose of the appeal as expediliously as possible in accordance with law on its own merits. 8 ( PSK,J & LNA,J W P No.22151 of 2023 18. Accordingly, the Appeal stands allowed. There shall be no order as to costs. 19. Pending miscellaneous applications if any shall stand closed. SD/- V.KAVITHA ASSISTANT REGISTRAR //rRUE COPY/I 4_. SECTION OFFICER lncome Tax Officer, Ward-3, District Nizamabad, Telangana State. The Principle Commissioner of lncome Tax-ll, 6th Floor Signature Towers, Kondapur, Opposite Botanical Gardens, Hyderabad. One CC to SRI SRINIVAS GANGISHETTI, Advocate [OPUC] One CC to SRI SUNDARI R PISUPATI, SR.SC FOR INCOME TAX DEPARTMENT TOPUC] Two CD Copies 9 To 1 2 3 4 5 PSK. GJt)-, I HIGH COURT DATED:1211012023 ORDER WP.No.22151 of 2023 ALLOWING THE WRIT PETITION WITHOUT COSTS. 1E- I TA 16- -) r) :r;'., o 6 l{0I 1$8 -L J-,' * 3 o f A '{!. - .,, .r :.7 "