LATE SMT. MAMTA CHOUDHARY V. PRINCIPAL COMMISSIONER OF INCOME TAX

CW/5366/2021

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The case involves a petition filed by Shri Sanjeev Kumar Choudhary, the legal heir of the late Smt. Mamta Choudhary, challenging the decision of the Principal Commissioner of Income Tax, Jaipur-2, which rejected their application for settlement under the VSVS Act. The original assessment for the year 2009-10 was conducted ex-parte due to the assessee's illness, and no appeals were filed during her lifetime. The petitioner sought to take advantage of the VSVS Act introduced in 2020, but the department contended that the appeal was filed too late, long after the statutory period for filing an appeal had expired. The court examined the applicability of the VSVS Act to the petitioner's case, particularly focusing on the conditions under which an appeal could be considered 'pending' as per the scheme.

• Counselvise Citation: [2022] 140 COUNSELVISE.COM (IT) 767843 (HC-RAJASTHAN)
• Appeal Type: Others
• Pronouncement Date: 22-02-2022
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961, Direct Tax Vivad Se Vishwas Act, 2020
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: AMIT MALANI
• Assessee Lawyers: SIDDHARTH RANKA
• Keywords: Assessment; Condonation of delay; Ex-parte; Income Tax; Settlement Scheme; Vivad Se Vishwas Act
• Section: 147; 148; 144; 271(1)(c); 271B; 271F

Judgement Text

"HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR D.B. Civil Writ Petition No. 5366/2021 Late Smt. Mamta Choudhary, Through Her Legal Heir Shri Sanjeev Kumar Choudhary Resident Of Gram Hetamsar, District Jhunjhunu In The State Of Rajasthan ----Petitioner Versus 1. Principal Commissioner Of Income Tax, Jaipur-2, Jaipur Having Its Office At New Central Revenue Building, Statue Circle, Bhagwan Das Road, C-Scheme, Jaipur. 2. Central Board Of Direct Taxes, New Delhi Having Its Office At North Block, Central Secretariat, New Delhi-110001 Through Its Chairman. ----Respondents For Petitioner(s) : Mr. Siddharth Ranka For Respondent(s) : Mr. Amit Malani on behalf of Mr. R.B. Mathur (Sr. Adv.) HON'BLE THE CHIEF JUSTICE MR. AKIL KURESHI HON'BLE MR. JUSTICE SUDESH BANSAL Order 22/02/2022 1. The petitioner has challenged the decision of the respondent No.1-Principal Commissioner of Income Tax, Jaipur-2 rejecting the petitioner's application for settlement of a case under the Direct Tax Vivad Se Vishwas Act, 2020 (hereinafter to be referred as 'VSVS Act'). Brief facts are as under:- 2. The petitioner is husband of deceased Mamta Choudhary. For the assessment year 2009-10 late Smt. Mamta Choudhary had filed return of income which was taken in reassessment. An order under Section 144 read with Section 147 of the Income Tax Act, 1961 (for short 'the Act') was passed after issuing notice under Section 148 of the Act on 25.02.2014 assessing total income at (2 of 5) [CW-5366/2021] Rs.51,40,000/-. Penalty proceedings under Sections 271B, 271(1) (c) and 271F of the Act were initiated. Case of the petitioner is that his wife was suffering from cancer. She therefore could not participate in the assessment proceedings. Assessment order was passed ex-parte. She expired on 25.09.2015. 3. Neither during her lifetime nor after her death any appeal for and on behalf of the assessee was filed against the said order of assessment. On 03.02.2020 the settlement scheme under the VSVS Act was introduced. As per this scheme with respect to a pending case assessees were given moratorium if application for settlement was filed before the appropriate authority and accepted. On 04.03.2020 the petitioner filed an appeal as a legal heir of deceased Mamta Choudhary against the order of assessment dated 25.02.2014. He also filed an application for condonation of delay. 4. The Central Board of Direct Taxes (for short 'the CBDT') issued a circular on 04.12.2020 issuing certain clarifications with respect to frequently asked questions in relation to the said scheme. We are concerned with question No.59 contained in the said circular. The question and the clarification issued by the CBDT read as under:- Q.No.59. Whether the taxpayer in whose case the time limit for filing of appeal has expired before 31st Jan 2020 but an application for condonation of delay has been filed is eligible? Answer: If the time limit for filing appeal expired during the period from 1st April 2019 to 31st Jan, 2020 (both dates included in the period), and the application for condonation is filed before the date of issue of this circular, and appeal is admitted by the appellate authority before the date of filing of the declaration, such appeal will be deemed to be pending as on 31st Jan 2020. (3 of 5) [CW-5366/2021] 5. This clarification thus concerns the aspect as to when in a case the time limit for filing appeal has expired before 31.01.2020 but an application for condonation for delay has been filed, whether the same would be treated as a pending case. The clarification issued by the CBDT provides that if time limit for filing appeal expired during the period from 01.04.2019 to 31.01.2020 and the application for condonation is filed before the date of issue of the circular and the appeal has been admitted by the appellate authority before the date of filing of the declaration, such appeal will be deemed to be pending as on 31.01.2020. For application of this clarification thus first condition was that the time limit for filing appeal has expired during the period from 01.04.2019 to 31.01.2020. 6. The case of the petitioner is that this condition is directory and not mandatory and must be seen in the background of the appeal filed by the petitioner along with the application for condonation of delay. If the delay is condoned, the institution of appeal should relate back to the original period of limitation after passing of the order of assessment and looked from such angle, the appeal should be treated as pending in terms of the clarification issued by the CBDT in the said circular. In this context learned counsel for the petitioner strenuously urged that the petitioner's application for condonation of delay has not yet been disposed of. In view of the introduction of faceless assessment procedure the petitioner is not aware before which Appellate Commissioner his appeal and application for delay condonation are pending. 7. On the other hand counsel for the department submitted that petitioner does not fulfill the very first condition contained in the (4 of 5) [CW-5366/2021] clarification of the CBDT. The period of limitation for filing appeal had expired long before the settlement scheme was introduced. The petitioner cannot revive a dead cause by filing a belated appeal with application for condonation of delay. 8. Having heard learned counsel for the parties and having perused the documents on record we find that admittedly the order of assessment was served on the assessee on or around 25.02.2014. Till 04.03.2020 i.e. six years after the order of assessment was communicated, no appeal was filed challenging the assessment. The appeal was filed only on 04.03.2020 i.e. just over a month after introduction of the settlement scheme under the VSVS Act. In the application for condonation of delay also it is primarily stated that petitioner was not aware about the passing of the order of assessment. He came to know only when department raised recovery of outstanding demand. He also stated that petitioner wants to take benefit of scheme under the VSVS Act and therefore the delay should be condoned. In this application the petitioner has not stated when did the department serve notice of recovery upon which he came to know about the order of assessment being passed. Even this general assertion of not being aware of assessment earlier does not seem quite correct since we find that at Page 148 of the paper book there is a copy of the letter written by the petitioner to the Income Tax Officer on or around 20.03.2015 conveying that he was unable to attend the rectification proceedings and that the date may be postponed. 9. We do not think that the benefit of the scheme under the VSVS Act is meant to be given to the assessees without any reference point. In other words an assessee cannot revive an old dead cause and contend that now that I have filed an appeal along (5 of 5) [CW-5366/2021] with application for condonation of delay, my right to apply for settlement under the scheme exists. This is precisely why the CBDT in its clarification in question has provided that time limit for filing appeal should have expired during the period from 01.04.2019 to 31.01.2020. This ensures that the cases in which limitation for filing appeal has expired long before could be screened out. Removal of this requirement would open flood gates and enable the assessees without any limit to revive a cause which may have been abandoned. This can never be the intention of the scheme. The terms of the scheme cannot be expanded in this manner. 10. In the result we do not find any merit in the petition and the same is dismissed. (SUDESH BANSAL),J (AKIL KURESHI),CJ KAMLESH KUMAR/S-67 "