RITESH BAKULESHBHAI MEHTA V. THE PRINCIPAL COMMISSIONER OF INCOME TAX 1

SCA/9469/2021

AI Insights

The case revolves around Ritesh Bakuleshbhai Mehta's petition against the rejection of his declaration under 'The Direct Tax Vivad se Vishwas Act, 2020' by the Principal Commissioner of Income Tax. The rejection was primarily based on the delay in filing the first appeal, which was not condoned by the Appellate Authority. The petitioner argued that despite the delay, the declaration should be accepted as the appeal was pending on the specified date, 31.01.2020. The court referenced a similar case (Special Civil Application No. 6232 of 2021) and the Supreme Court's decision in Commissioner of Income Tax v. Shatrusailya Digvijaysingh Jadeja, emphasizing that the appeal's pending status on the specified date suffices for the declaration's acceptance, irrespective of the delay's condonation.

• Counselvise Citation: [2021] 140 COUNSELVISE.COM (IT) 680425 (HC-GUJARAT)
• Appeal Type: Others
• Pronouncement Date: 10-08-2021
• Assessment Year: misc
• Other Referred Cases: Special Civil Application No. 6232 of 2021, Commissioner of Income Tax v. Shatrusailya Digvijaysingh Jadeja, Dr. Mrs. Renuka Delta v. Income Tax Officer, Raja Kulkarni v. The State of Bombay, Tirupati Balaji Developers (P) Ltd. v. State of Bihar & Others
• Laws Referred To: The Direct Tax Vivad se Vishwas Act, 2020
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: MAUNA BHATT
• Assessee Lawyers: HIREN TRIVEDI
• Keywords: Block assessment; Condonation of delay; Direct Tax Vivad Se Vishwas Act; Income Tax; Litigation Settlement Scheme
• Section: 226

Judgement Text

"C/SCA/9469/2021 JUDGMENT DATED: 10/08/2021 IN THE HIGH COURT OF GUJARAT AT AHMEDABAD R/SPECIAL CIVIL APPLICATION NO. 9469 of 2021 FOR APPROVAL AND SIGNATURE: HONOURABLE MS. JUSTICE BELA M. TRIVEDI and HONOURABLE DR. JUSTICE ASHOKKUMAR C. JOSHI ========================================================== 1 Whether Reporters of Local Papers may be allowed to see the judgment ? NO 2 To be referred to the Reporter or not ? NO 3 Whether their Lordships wish to see the fair copy of the judgment ? NO 4 Whether this case involves a substantial question of law as to the interpretation of the Constitution of India or any order made thereunder ? NO ========================================================== RITESH BAKULESHBHAI MEHTA Versus THE PRINCIPAL COMMISSIONER OF INCOME TAX 1 ========================================================== Appearance: HIREN J TRIVEDI(8808) for the Petitioner(s) No. 1 MRS MAUNA M BHATT(174) for the Respondent(s) No. 1,2,3 ========================================================== CORAM: HONOURABLE MS. JUSTICE BELA M. TRIVEDI and HONOURABLE DR. JUSTICE ASHOKKUMAR C. JOSHI Date : 10/08/2021 ORAL JUDGMENT (PER : HONOURABLE MS. JUSTICE BELA M. TRIVEDI) 1. Rule. Mrs. Mauna Bhatt, Senior Standing Counsel for the Respondent waives service of Rule. Page 1 of 9 C/SCA/9469/2021 JUDGMENT DATED: 10/08/2021 2. With the consent of learned learned Advocate for the parties, the Petition is taken up for final hearing. 3. The present Petition filed by the Petitioner – Ritesh Bakuleshbhai Mehta, under Article 226 of the Constitution of India, is directed against the impugned communication dated 26.04.2021 (Annexure- G), rejecting the Declaration filed by the Petitioner under “The Direct Tax Vivad se Vishwas Act, 2020 (hereinafter referred to as “the said Act”). 4. The facts in nutshell giving rise to the present petition are that after first round of litigation upto ITAT, remand proceedings were conducted by the Assessing Officer in case of the petitioner for the block assessment for the years 01.04.1195 to 13.12.2001. The Assessing Officer vide order dated 27.12.2011 framed the assessment for the said period. The petitioner assailed the said order before the CIT (Appeals) by filing an Appeal alongwith an application seeking condonation of delay. Thereafter, the Appeal was fixed from time to time, and was lastly fixed on 05.02.2016. It is further case of the Petitioner that the said Act having come into force, for settling the disputes, the Petitioner being desirous of settling the dispute involved in the Appeal pending on the specified date i.e. 31.1.2020, had decided to opt for availing the benefit under the said Act, and accordingly, had filed the Declaration in the Page 2 of 9 C/SCA/9469/2021 JUDGMENT DATED: 10/08/2021 prescribed Form Nos. 1 and 2 on 02.01.2021 under the said Act. However, it was displayed on the E-filing portal of the Respondent that the said Declaration was rejected on 26.04.2021, mainly on the ground that the First Appeal was filed belatedly and there was no information received from the Assessing Officer, as to whether, the delay occurred in filing the Appeal before the Appellate Authority was condoned or not. 5. Learned Advocate Mr. H.J.Trivedi appearing for the petitioner has submitted and learned Senior Standing Counsel Mrs. Mauna Bhatt has not disputed that the facts of the present case are similar to the facts in Special Civil Application No. 6232 of 2021, which has been allowed by the Court vide order dated 31.07.2021. In the said order it has been held as under: “7. Before adverting to the submissions made by the learned Advocates for the parties, it would be germane to reproduce the definition of the ‘Appellant’ as contained in Section 2(i) (a) of the said Act as well as the definition of the ‘specified date’ as contained in Section 2(i)(n) thereof: “2. (1) In this Act, unless the context otherwise requires,— (a)\"appellant\" means Page 3 of 9 C/SCA/9469/2021 JUDGMENT DATED: 10/08/2021 (i) a person in whose case an appeal or a writ petition or special leave petition has been filed either by him or by the income-tax authority or by both, before an appellate forum and such appeal or petition is pending as on the specified date; (ii) a person in whose case an order has been passed by the Assessing Officer, or an order has been passed by the Commissioner (Appeals) or the Income Tax Appellate Tribunal in an appeal, or by the High Court in a writ petition, on or before the specified date, and the time for filing any appeal or special leave petition against such order by that person has not expired as on that date; (iii) a person who has filed his objections before the Dispute Resolution Panel under section 144C of the Income-tax Act, 1961 (43 of 1961) and the Dispute Resolution Panel has not issued any direction on or before the specified date; (iv) a person in whose case the Dispute Resolution Panel has issued direction under sub-section (5) of section 144C of the Income-tax Act and the Assessing Officer has not passed any order under subsection (13) of that section on or before the specified date; (v) a person who has filed an application for revision under section 264 of the Income-tax Act and such application is pending as on the specified date;\" [Explanation.—For the removal of doubts, it is hereby clarified that the expression \"appellant\" shall not Page 4 of 9 C/SCA/9469/2021 JUDGMENT DATED: 10/08/2021 include and shall be deemed never to have been included a person in whose case a writ petition or special leave petition or any other proceeding has been filed either by him or by the income-tax authority or by both before an appellate forum, arising out of an order of the Settlement Commission under Chapter XIX-A of the Income-tax Act, and such petition or appeal is either pending or is disposed of.] 8. As per Section 2(i)(n), \"specified date\" means the 31st day of January, 2020; 9. In the light of the aforestated provisions, let’s examine as to whether the petitioner could be said to be an “Appellant” within the meaning of Section 2(i)(a) of the said Act or not. In the present Petition, there are certain undisputed facts. It is not disputed that the Appeal filed by the Petitioner electronically on 17.5.2016 against the order of assessment dated 25.2.2016 is pending with the Appellate Authority, though there was delay of 40 days occurred in filing the said Appeal. It is also not disputed that the said delay has not been condoned by the Appellate Authority since the filing of the Appeal. It is stated at the bar by the learned Senior Advocate Mr. Hemani, and not disputed by the learned Senior Standing Counsel Mrs. Mauna Bhatt that there is no practice of registering an application for condonation of delay separately at the office of the CIT (Appeals), and the same is heard along with the Appeal itself. Even in the prescribed Form No.35, there was Column No. 15, where the Petitioner – Appellant was required to mention about the number of days of delay occurred in filing the Appeal. It has also emerged from the record of the Petition that the Appellate Authority itself had issued various notices to the Page 5 of 9 C/SCA/9469/2021 JUDGMENT DATED: 10/08/2021 Petitioner with regard to the hearing of the said Appeal. Now, the Declaration made by the Petitioner under the said Act has been rejected as shown in the portal, on the following grounds: “In your case, the AO has reported that “As per form-35 the demand notice against the assessment order has been served on 25.2.2016. However, applicant has filed appeal on 17.05.2016, which is beyond the time limit prescribed for filing appeal before CIT appeal. It has has been reported by the AO that leter to CIT appeal have been issued regarding any condonation order passed for delay in filing of appeal by the assessee. However, till date no reply has been received from the CIT appeal. Further, as per minutes of meeting held with CBDT Chairman and Members through video Conference on 04.01.2021, it was conveyed that order disposing condonation applications of the assessee will be passed in all cases within week by CsIT (AU)s. However, no information has been received from NFAC / respective CsIT (AU)s as to whether the delay has been condoned in this case. Under the circumstance, declaration filed is hereby rejected.” 10. At this juncture, it would be relevant to refer to the decision of Supreme Court in case of Commissioner of Income Tax v. Shatrusailya Digvijaysingh Jadeja, relied upon by the learned Senior Advocate Mr. Hemani, in which the S.C. had an occasion to deal with the issue, as to whether, the department could have rejected the Declaration filed under the similar scheme called Kar Vivad Samadhan Scheme, introduced vide the Finance [No.2] Act 1998, on the ground that the Revision / Appeal filed by the concerned Page 6 of 9 C/SCA/9469/2021 JUDGMENT DATED: 10/08/2021 Petitioner was time barred or was not valid. In the said case, the Supreme Court considered the object of the said Scheme as also the other earlier decisions, and observed as under: “13. In our view, the Scheme was in substance a recovery scheme though it was nomenclatured as a \"litigation settlement scheme\" and was not similar to the earlier Voluntary Disclosure Scheme. As stated above, the said Scheme was a complete Code by itself. Its object was to put an end to all pending matters in the form of appeals, reference, revisions and writ petitions under the IT Act/WT Act. Keeping in mind the above object, we have to examine section 95(i)(c) of the Scheme, which was different from appeals under section 246, revisions under section 264, appeals under section 260A etc. of the IT Act and similar provisions under the W.T. Act. Under the I.T. Act, there is a difference between appeals, revisions and references. However, those differences were obliterated and appeals, revisions and references were put on par under section 95(i)(c) of the Scheme. The object behind section 95(i)(c) in putting on par appeals, references and revisions was to put an end to litigation in various forms and at various stages under the IT Act/Wealth Tax Act and, therefore, the rulings on the scope of appeals and revisions under the IT Act or on Voluntary Disclosure Scheme, will not apply to this case. 15. In the case of Dr. Mrs. Renuka Delta (supra), this Court has held on interpretation of section 95(i)(c) that if the appeal or revision is pending on the date of the filing of the declaration under section 88 of the Scheme, it is not for the DA to hold that the appeal/revision was Page 7 of 9 C/SCA/9469/2021 JUDGMENT DATED: 10/08/2021 \"sham\", \"ineffective\" or \"infructuous\" as it has. 16. In the case of Raja Kulkarni v. The State of Bombay reported in AIR 1954 SC 73, this Court laid down that when a section contemplates pendency of an appeal, what is required for its application is that an appeal should be pending and in such a case there is no need to introduce the qualification that it should be valid or competent. Whether an appeal is valid or competent is a question entirely for the appellate court before whom the appeal is filed to decide and this determination is possible only after the appeal is heard but there is nothing to prevent a party from filing an appeal which may ultimately be found to be incompetent, e.g., when it is held to be barred by limitation. From the mere fact that such an appeal is held to be unmaintainable on any ground whatsoever, it does not follow that there was no appeal pending before the Court. 17. To the same effect is the law laid down by the judgment of this Court in the case of Tirupati Balaji Developers (P) Ltd. v. State of Bihar & Others reported in (2004) 5 SCC 1, in which it has been held that an appeal does not cease to be an appeal though irregular and incompetent.” 11. In view of the aforestated legal position, there remains no shadow of doubt that appeal could be said to be pending, even if the delay occurred in filing the same was not condoned and even if it was allegedly irregular or incompetent. In the instant case therefore also, the Respondent could not have rejected the Declaration Form of the Petitioner filed under the said Act merely on the ground Page 8 of 9 C/SCA/9469/2021 JUDGMENT DATED: 10/08/2021 that the Appeal was not valid or competent, as the delay occurred in filing the Appeal was not condoned by the Appellate Authority. In the opinion of the Court, the Respondent had to only take into consideration, as to whether, the Petitioner had filed an Appeal, and the same was pending on the ‘specified date’ i.e. 31.1.2020. It was not for the Respondent to decide, as to whether, such Appeal was irregular or incompetent or invalid in the eye of law.” 6. In view of the above, the impugned communication dated 26.04.2021 rejecting the Declaration filed by the petitioner under the said Act, deserves to be quashed and set aside, and is accordingly quashed and set aside. The respondent is directed to accept the said Declaration under the said Act for the assessment year under consideration, if otherwise it is valid. The petition stands allowed accordingly. Rule is made absolute. (BELA M. TRIVEDI, J) (A. C. JOSHI,J) SINDHU NAIR Page 9 of 9 "