{"id":22577,"date":"2021-04-14T10:21:03","date_gmt":"2021-04-14T04:51:03","guid":{"rendered":"https:\/\/itatonline.org\/archives\/?p=22577"},"modified":"2021-04-14T10:21:03","modified_gmt":"2021-04-14T04:51:03","slug":"sadruddin-tejani-vs-ito-bombay-high-court-the-dtvsv-act-2020-is-an-act-to-provide-for-resolution-of-disputed-tax-and-matters-connected-therewith-or-incidental-thereto-the-emphasis-is-on-disputed-tax","status":"publish","type":"post","link":"https:\/\/itatonline.org\/archives\/sadruddin-tejani-vs-ito-bombay-high-court-the-dtvsv-act-2020-is-an-act-to-provide-for-resolution-of-disputed-tax-and-matters-connected-therewith-or-incidental-thereto-the-emphasis-is-on-disputed-tax\/","title":{"rendered":"Sadruddin Tejani vs. ITO (Bombay High Court)"},"content":{"rendered":"
\n

DTVSV Act, 2020<\/strong><\/p>\n

S. 4(1): Declaration –The Designated Authority cannot reject the declaration filed under section 4(1) of the DTVSV Act,unless thedeclarant’s case does not fall under section 4(6) (False )  and in any of the disqualifications mentioned in section 9 of the said Act ( Act not to apply in certain cases .) -Order of rejection was quashed . [ S.154,  264 Art , 226  ]<\/strong><\/p>\n

SadruddinTejani vs. ITO Circle  <\/u><\/strong>[WP No: 611, 606, 626, 590, 612, 601, 638, 593, 592,596, 625 of 2021]Order dated 09.04.2021  )(Bom) HC )<\/strong><\/p>\n

The Hon’ble High Court directed the Designated Authority to act upon the declaration of the Petitioner in Form 1 as per law within a period of two weeks.    <\/strong><\/p>\n

Honourable Justice  Mr . Sunil .P. Deshmukh  &       Honourable Justice  Mr. Abhay  Ahuja <\/strong>
\n Mr .K. Gopal  with  Ms. Neha Paranjape Advocates for the Petitioners <\/strong>
\n Mr . Sham Valve Advocate for the Respondents  <\/strong><\/p>\n

Petitioners filed eleven writ petitions challenged the arbitrary and unreasonable action of the Pr. CIT [Designated Authority] of rejecting the declaration filed under section 4(1) of the Direct Tax Vivad Se Vishwas Act, 2020 [DTVSV Act] for the AYs 1988-89 to 1998-99 with the remark as ‘Rejected’ without giving any justification for the same.<\/p>\n

Facts: <\/strong><\/p>\n

The Petitioner is an Individual and had filed return of income for the AY 1987-88 to 1998-99. The assessments for the AY 1987-88 to 1995-96 were reopened u\/s 147 of the Income Tax Act, 1961 [hereinafter referred to as ‘the Act’] and the assessment orders were passed u\/s 143(3) r.w.s 147 of the Act. For the AYs 1996-97 to 1998-99, the assessments were finalised u\/s 143(3) of the Act by raising substantial demand. The additions made in the said assessments were challenged in appeals before CIT(A), who confirmed the action of the AO. Further, the appeal was preferred before ITAT contesting the additions confirmed in the appellate proceedings. The ITAT set aside the order of CIT(A) and directed the AO to grant relief. <\/p>\n

Pending the appellate proceedings, the TRO initiated the recovery proceedings and the Petitioner to avoid any coercive action handed over the cheques totalling to an amount of Rs.12,43,000\/- against the demand raised for the AYs 1986-87 to 1998-99. However, while preparing the challans, the TRO wrongly mentioned only AY 1986-87 in all the challans and adjusted the said amount only against the demand for AY 1986-87 and not for the AYs 1987-88 to 1998-99. <\/p>\n

After the ITAT order, when the AO gave effect to the same, the demand for all the assessment years had substantially reduced. But, the credit for the taxes recovered was given only in the AY 1987-88, which resulted into refund in theAY 1987-88. Consequently, huge tax and interest demand was created in all the other years i.e AY 1988-1989 to 1998-99. <\/p>\n

Thus, the Petitioner sought rectification of the same by moving an application u\/s 154 of the Act. However, the same was rejected.The Petitioner therefore, moved an application u\/s 264 of the Act for all the AYs 1987-88 to 1998-99.
\n Pending the application u\/s 264 of the Act, the Petitioner preferred to settle the litigation under DTVSV Act, 2020. On filing the declaration u\/s 4(1) of DTVSV Act, 2020, the Petitioner was asked to justify his claim that there is a ‘disputed tax’ when there is no ‘disputed income’ as per the relief sought in the applications filed u\/s 264 of the Act. The Petitioner responded to the same and submitted that as per section 2 (1)(a)(v), an assessee whose application is pending on the specified date is an ‘appellant’ for the purpose of DTVSV Act, 2020. The disputed tax in such cases is defined in section 2(1)(j)(F) as the amount of tax payable by the appellant, if such application for revision was not accepted. In the Petitioner’s case there are ‘tax arrears’ as per the definition in section 2(1)(o) of the DTVSV Act, 2020. Thus, the Petitioner determined the amount payable u\/s 3(a) of DTVSV Act, 2020. The Designated Authority did not appreciate the said explanation of the Petitioner and rejected the declaration without assigning any reason for the same. <\/p>\n

Contention before Hon’ble High Court:<\/strong><\/p>\n

Before Hon’ble High Court, the Petitioner challenged the arbitrary and unreasonable action of the Designated Authority (Respondent No.2) in rejecting the declarationfiled under the DTVSV Act. It was argued before the Hon’ble High Court that thePetitioner’s case doesn’t fall under any of the disqualifications mentioned in section 9 of the DTVSV Act, 2020 and therefore, the Designated Authority has no power to reject the application without assigning any reason for the same. It was submitted before the Hon’ble Court that the Petitioner has satisfied all the conditions to make the declaration under the DTVSV Act, 2020 and therefore, he is eligible to seek all the benefits under the said Act. On the other hand, the department argued that the declaration of the Petitioner is not valid as there cannot be any disputed tax in the absence of any disputed income. Thus, the declaration of the Petitioner has been rightly rejected.<\/strong><\/p>\n

Held:<\/strong><\/p>\n

The Hon’ble High Court in paragraph 38, observed that the DTVSV Act, 2020 is an Act to provide for resolution of disputed tax and matters connected therewith or incidental thereto. The emphasis is on disputed tax and not on disputed income. It was further, held in paragraph 50 of the decision that “from a plain reading of the provisions of the DTVSV Act, 2020 and the Rules set out above, it emerges that the Respondent – Designated Authority would have to issue Form 3 as referred to in section 5(1) specifying the amount payable in accordance with section 3 of the DTVSV Act. In the case of the declarant who is an eligible appellant not falling under section 4(6) nor within the exceptions in section 9 of the DTVSV Act, 2020, which fact appears to be undisputed”. <\/p>\n

The Hon’ble Court further held that as the Petitioner’s case is covered by the definition of disputed tax as per section 2(1)(j)(F) of the DTVSV Act, 2020, the Designated Authority is not justified in rejecting the declaration of the Petitioner. <\/p>\n<\/blockquote>\n

IN THE HIGH COURT OF JUDICATURE AT BOMBAY
\nORDINARY ORIGINAL CIVIL JURISDICTION
\nWRIT PETITION NO.611 OF 2021
\nWITH
\nWRIT PETITION NO.606 OF 2021
\nWITH
\nWRIT PETITION NO.626 OF 2021
\nWITH
\nWRIT PETITION NO.590 OF 2021
\nWITH
\nWRIT PETITION NO.612 OF 2021
\nWITH
\nWRIT PETITION NO.601 OF 2021
\nWITH
\nWRIT PETITION NO.638 OF 2021
\nWITH
\nWRIT PETITION NO.593 OF 2021
\nWITH
\nWRIT PETITION NO.592 OF 2021
\nWITH
\nWRIT PETITION NO.596 OF 2021
\nWITH
\nWRIT PETITION NO.625 OF 2021
\nSadruddin Tejani ]
\nL-143, Maker Tower, ]
\nJ D Somani Road, Cuffe Parade, ]
\nMumbai 400 005. ] .. Petitioner.
\nv\/s.
\n1 Income Tax Officer \u2013 Circle 17(3) ]
\n(1), having office at Kautilya Bhavan,]
\nBandra. ]
\n2 Principal Commissioner of Income ]
\nTax 17 (Designated Authority under ]
\nDirect Tax Vivad se Vishwas Act, ]
\n2020) having office at Room No.127, ]
\nKautilya Bhavan, Bandra. ] .. Respondents.
\nMr. K. Gopal with Ms. Neha Paranjape, Advocate for the Petitioner in all
\nthe Petitions.
\nMr. Sham Walve, for the Respondent in all the Petitions.
\nS.R.JOSHI 1 of 33
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\nCORAM: SUNIL P. DESHMUKH &
\nABHAY AHUJA, JJ.
\nRESERVED ON : 17th MARCH, 2021.
\nPRONOUNCED ON : 09th APRIL, 2021.
\nPER COURT:-
\nBy these Petitions filed under Article 226 of the Constitution
\nof India, 1950, Petitioner is challenging the rejection of its declarations
\nfiled on 18th November, 2020 under Section 4(1) of the Direct Tax Vivad-
\nSe-Vishwas Act, 2020 (\u201cDTVSV\u201d Act) for the eleven Assessment Years from
\nA.Y. 1988-89 to 1998-99.
\n2 Petitioner has filed these Petitions for the following reliefs :-
\n\u201c(a) That this Hon\u2019ble Court may be pleased to issue under Article
\n226 of the Constitution of India an appropriate direction order or a
\nwrit including a writ in the nature of \u2018Certiorari\u2019 to call for the
\nrecords and verify the declaration filed under section 4(1) of the
\nDTVSV Act and direct the Respondent No.2 to accept the same;
\n(b) That the Hon\u2019ble Court may be pleased to issue under Article
\n226 of the Constitution of India appropriate writ or order or
\ndirection including a writ in the nature of \u2018Mandamus\u2019 directing the
\nRespondent No.2 to accept the declaration made by the Petitioner
\non 18th November, 2020 under section 4(1) of the DTVSV Act;
\n(c) That this Hon\u2019ble Court may be pleased to issue under Article
\n226 of the Constitution of India an appropriate writ or order or
\ndirection including a writ in the nature of \u2018Prohibition\u2019 restraining
\nthe Respondent No.2 disposing off the application filed under
\nsection 264 of the Act and recover the outstanding disputed
\ndemand thereunder\u201d.
\n3 A sojourn into the facts will be helpful to appreciate the
\ncontroversy. Petitioner who is stated to be engaged in the business of retail
\nfootwear under the shop name \u201cJolly Shoes\u201d, has filed declarations in
\nForm-1 and undertaking in Form-2 in respect of each of the Assessment
\nYear from 1988-89 to 1997-98 under Section 4 (1) of the DTVSV Act on
\n18th November, 2020. However, the same has been rejected by updating
\nS.R.JOSHI 2 of 33
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\nthe status on the e-filing portal of the Petitioner on 30th January, 2021,
\nwhich shows the action on the DTVSV Forms filed by the Petitioner from
\nAssessment Year 1988-89 to 1997-98 as \u201cRejected\u201d. Aggrieved by the
\nsame, Petitioner is before us.
\n4 Petitioner had earlier filed returns of income for the
\nAssessment Years 1987-88 to 1998-99. Assessments for the Assessment
\nyears 1987-88 to 1995-96 were reopened by issuance of notices under
\nSection 148 (1) of the Income Tax Act, 1961 (the Income Tax Act) and the
\nre-assessment proceedings were completed by passing of Assessment
\nOrders under Section 144 read with Section 147 of the Income Tax Act by
\nmaking additions on account of gross profit and unsecured loan. For the
\nAssessment Years 1996-97 to 1998-99, assessments were finalized under
\nSection 143(3) of the Income Tax Act. Pursuant to the said Assessment
\nOrders, Respondent No.1 raised following demands for those years by
\nissuing notice under Section 156 of the Income Tax Act:-
\nAssessment Year Demand raised u\/s. 156 of the Act
\n1987-88 1,19,170\/-
\n1988-89 5,53,774\/-
\n1989-90 13,68,068\/-
\n1990-91 23,57,128\/-
\n1991-92 1,72,706\/-
\n1992-93 13,21,156\/-
\n1993-94 58,89,474\/-
\n1994-95 29,75,306\/-
\n1995-96 24,70,199\/-
\n1996-97 15,21,293\/-
\n1997-98 8,79,899\/-
\n1998-99 1,37,122\/-
\nTotal:- 1,97,65,295\/-
\nS.R.JOSHI 3 of 33
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\n5 Being aggrieved by the Assessment Orders for the Assessment
\nYears 1987-88 to 1998-99, Petitioner preferred Appeals before the
\nCommissioner of Income Tax (Appeals) (CIT(A)), who confirmed the
\nAssessment Orders and passed a consolidated order dated 9th October,
\n2002 for all the Assessment Years.
\n6 Further, appeals were preferred by Petitioner before the
\nIncome Tax Appellate Tribunal (ITAT) and the ITAT set aside the order of
\nthe CIT(A) by its order dated 20th August, 2004 and restored the issue
\nback to the file of the first Respondent- Assessing Officer.
\n7 It is submitted that pending the proceedings before the
\nCIT(A) and the ITAT, proceedings to recover the outstanding demands
\nwere initiated by the Tax Recovery Officer (TRO) and to avoid any
\ncoercive action, Petitioner handed over cheques totaling to an amount of
\nRs.12,43,000\/- from time to time to the TRO, which appears to be
\npursuant to an order of stay of demand by the ITAT.
\n8 Petitioner submits that the said amount of Rs.12,43,000\/-
\nwas adjusted only against the demand for Assessment Year 1987-88 and
\nnot for demands for the various Assessment Years 1987-88 to 1998-99.
\nThis, according to the Petitioner, was despite the fact that, the original
\ndemand for the Assessment Year 1987-88 was only Rs.19,170\/- and,
\ntherefore the entire amount of Rs.12,43,000\/- could not have been
\nadjusted for the tax liability for that year alone.
\n9 It is submitted that, pursuant to the order dated 20th August,
\n2004, passed by the ITAT, Respondent No.1 passed the Assessment Order
\non 13th March, 2006 under Section 143(3) of the Income Tax Act for the
\nAssessment Years 1987-88 to 1998-99 against which, Petitioner filed
\nappeals before CIT(A). Vide order dated 23rd November, 2006, the CIT(A)
\ngranted partial relief to the Petitioner, pursuant to which, Respondent
\nS.R.JOSHI 4 of 33
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\nNo.1 passed order on 23rd January, 2007, giving effect to the order passed
\nby the CIT(A). However, it is submitted that no credit for taxes paid on
\nregular assessment of Rs.15,86,151\/- including Rs.12,43,000\/- was given
\nwhile determining the demands for the respective years.
\n10 Being aggrieved by the partial relief granted by CIT(A),
\nRevenue filed appeals before the ITAT for Assessment Years 1988-89 to
\n1990-91 and 1992-93 to 1998-99, which were disposed of by order dated
\n18th December, 2008.
\n11 It is submitted that as the revised demand for Assessment
\nYear 1987-88 was only Rs.936\/-, the payment of Rs.12,43,000\/- has
\nbeen made to be adjusted against the revised demand for the Assessment
\nYears 1988-89 to 1998-99 as under:-
\nAssessment Year Disputed Tax (Amount in Rs.)
\n1988-89 3,122
\n1989-90 74,228
\n1990-91 96,577
\n1991-92 3,370
\n1992-93 46,971
\n1993-94 1,34,400
\n1994-95 1,48,535
\n1995-96 76,127
\n1996-97 75,555
\n1997-98 2,79,116
\n1998-99 17,432
\nTotal:- 9,55,433\/-
\n12 It is submitted that Petitioner filed rectification application
\nunder Section 154 of the Income Tax Act for the Assessment Year 1987-88
\nto 1998-99, seeking credits for payments of Rs.15,86,151\/- including
\nRs.12,43,000\/-, for adjustment of payments to the tune of Rs.12,43,000\/-
\nagainst revised demand for the Assessment Year 1988-89 to 1998-99. This
\nS.R.JOSHI 5 of 33
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\nrectification application was decided on 16th April, 2018, rejecting the
\nrequest for the aforesaid adjustment as credit of tax as per challan was
\ngiven to the Petitioner for Assessment Year 1987-88. The Assessing Officer,
\nvide order dated 16th April, 2018 gave credit of the taxes paid of regular
\nassessment of Rs.15,86,151\/- and determined the refund for Assessment
\nYear 1987-88 of Rs.23,64,620\/-(including interest u\/s. 244A of the
\nIncome Tax Act of Rs.11,22,380\/-) and total tax demand for Assessment
\nYear 1988-89 to Assessment Year 1998-99 of Rs.90,77,160\/- (including
\ninterest u\/s 220(2) of the Income Tax Act of Rs.47,75,722\/-).
\n13 Aggrieved by the same, Petitioner sought remedy by filing
\nRevision Application dated 15th May, 2018 under Section 264 of the
\nIncome Tax Act before the Principal Commissioner of Income Tax to
\ncompute the tax demand for Assessment Year 1987-88 to Assessment Year
\n1998-99 after giving credit of Rs.12,43,000\/- for the Assessment Years
\n1988-89 to 1998-99, which has been adjusted in the impugned order
\nagainst Assessment Year 1987-88 only, and which is pending.
\n14 Learned Counsel for the Petitioner, Mr. K. Gopal, submits that
\npending this application under Section 264 of the Income Tax Act, the
\nDirect Tax Vivad Se Vishwas Act, 2020 came to be enacted on 17th March,
\n2020 to reduce pending income tax litigations, generate timely revenue
\nfor the Government and benefit tax payers by providing for peace of mind,
\ncertainty and saving time and resources that would otherwise be spent on
\nthe long drawn and vexatious litigation process. The Direct Tax Vivad Se
\nVishwas Rules, 2020 (the \u201cDTVSV Rules\u201d) were notified on 19th March,
\n2020, pursuant to which, Petitioner has filed declaration in Form \u2013 1 and
\nundertaking in Form-2 as per Rule 3 of the DTVSV Rules with the
\nDesignated Authority viz: Respondent No.2 on 18th November, 2020.
\nPetitioner claims that he is an Appellant as per Section 2(1)(a)(v) of the
\nDTVSV Act, inasmuch as he is a person who has filed an application for
\nS.R.JOSHI 6 of 33
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\nrevision under Section 264 of the Income Tax Act and the said
\napplication is pending on the specified date viz: 31st January, 2020 as
\ndefined in Section 2(1)(m) of the DTVSV Act. It is submitted that as
\nsuch he is an eligible Appellant as his application under Section 264 of
\nthe Income Tax Act is pending on the specified date. He further submits
\nthat in the Petitioner\u2019s case, resolution of disputed tax has been
\nsought for. This he says is because as per Section 2(1)(j)(F) of the DTVSV
\nAct, \u201cdisputed tax\u201d means the income tax (including surcharge and cess)
\nthat would become payable by the Appellant under the provisions of
\nthe Income Tax Act as computed in a case where an application for
\nrevision under Section 264 of the Income Tax Act is pending as on the
\nspecified date, was not to be accepted. He, therefore, submits that
\nPetitioner satisfies all the conditions to file declaration under Section 4 of
\nthe DTVSV Act and has accordingly done so by filing declarations for
\neach of the Assessment Years 1988-89 to 1998-99.
\n15 Upon receipt of the said applications, Respondent No.1 sent a
\nmail on 3rd December, 2020 to the Petitioner, stating that there is no
\ndispute in income tax calculation and requested Petitioner to give a
\nworking of the disputed tax in relation to undisputed income for
\nAssessment Years 1987-88 to 1998-99 within 3 days, failing which, the
\napplications would be processed, considering the \u2018disputed tax\u2019 in relation
\nto disputed income as \u201cNil\u201d. Learned Counsel for Petitioner has taken us
\nthrough the said mail from the 1st Respondent, relevant portion of which
\nis extracted as under:-
\n\u201c Kindly refer to the above.
\nReceived your application under DTVsV Scheme for above
\nmentioned assessment years. On perusal of the same, it is seen that
\nyou have opted for the scheme since your revision petition u\/s. 264
\nof the I. T. Act is pending before the Pr. C.I,T. 17 Mumbai for A Y
\n1988 \u2013 89 to 1998-99. The main ground of appeal as per your
\npetition u\/s. 264 of the I.T. Act is to direct the A. O. to give credit to
\nregular tax paid challan\u2019s of A. Y. 1987-88 at Rs.12,43,000\/- to
\nS.R.JOSHI 7 of 33
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\nvarious years i.e. for A. Y. 1988 to 1998 so that the interest u\/s.
\n234B and 220(2) of the Act could be reduced considerably. There is
\nno dispute on the income arrived for A. Y. 1987 to 1998 in the
\norder passed u\/s. 154 of the I. T. Act dated 16.04.2018 whereas in
\nyour application in form \u2013 1 Schedule X for A. Y. 1988 to 198
\ndisputed income is shown nil, however, you have calculated
\ndisputed tax. On perusal of the order passed u\/s. 154 of the I. T. Act
\nand I.T. N. S-150 for A. Y. 1987 to 1998 dated 16-04-2108 it is seen
\nthat Income Tax is correctly calculated, there is no dispute in
\nincome tax calculation however you have mentioned disputed tax
\nagainst undisputed income in Form-1.
\nIn view of the above, you are hereby given an opportunity to
\nsubmit your working of disputed tax in relation to undisputed
\nincome for A. Y. 1987-88 to 1998-99 within 3 days from receipt of
\nthe mail. If no reply is received within 3 days, your application for
\nDTVsV scheme will be processed accordingly considering the
\ndisputed tax in relation to disputed income at Rs.Nil.\u201d
\n16 In reply, Petitioner has filed a detailed submission dated 5th
\nDecember, 2020, which for the sake of convenience, is reproduced as
\nunder:-
\n\u201c Submissions of the Applicant:
\n9. For the sake of convenience, the Applicant divides his
\nsubmissions into two parts as under:-
\n9.1 Submissions on the claims made by the Applicant in the said
\napplication (Paragraph 10)
\n9.2 Submissions dealing with the specific queries raised by Your
\nHonour in the mail\/ notice dated 03.12.2020 under consideration
\n(Paragraph 11)
\n10. The Applicant at the outset draws Your Honour\u2019s attention to
\nthe following definitions as mentioned u\/s. 2 of the \u201cthe Act, 2020\u201d
\nand submits as under:-
\n10.1. Section 2(1)(a)(v):- Section 2(1)(a) defines the terms
\n\u201cappellant\u201d and Section 2(1)(a)(v) as under:-
\n\u201cperson who has filed an application for revision under section 264
\nof the Income Tax Act and such application is pending on specified
\ndate\u201d
\nThe Applicant submits that since his applications for revision for the
\nyears under consideration are pending on specified date (i.e.
\n31.01.2020), the Applicant is an \u201cappellant\u201d as per the aforesaid
\ndefinition.
\n10.2 Section 2(1)(c) defines \u201cdeclarant\u201d as under:-
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\n\u201cDeclarant means a person who files declaration under Section 4\u201d
\nSince the applicant has made valid declarations u\/s. 4 r.w.s. 3 of the
\n\u201cthe Act, 2020\u201d, the Applicant duly satisfies the aforesaid definition
\nas well.
\n10.3 Section 2(1)(d) defines declaration as \u201cdeclaration\u201d means
\nthe declaration filed under Section 4.
\nThe Applicant submits that since all the declarations are filed u\/s.
\n3 r.w.s. 4 of the Act, 2020, the Applicant is required to be
\nconsidered as \u201cdeclarant\u201d under the scheme.
\n10.4 Section 2(1)(j)(f) defines \u2018disputed tax\u2019 in the case of
\napplication for revision pending before 264 of the specified date
\nand it reads as under:-
\n\u201cin a case where an application for revision under section 264 of
\nthe Income Tax Act is pending as on the specified date, the amount
\nof tax payable by the Appellant if such application for revision
\nwas not to be accepted.\u201d
\nThe Applicant mentions that his revision applications for the
\naforesaid years are pending before the learned PCIT on 31.01.2020
\nand the Applicant would be liable to pay the total demand of
\nRs.88,90,180\/- (including the income tax of Rs. 8,06,968\/-) if his
\nmain contention of granting credit\/ adjustment of taxes of
\nRs.12,43,000\/- against the revised demands of subsequent years
\nwere not accepted and all the revision applications filed by the
\nApplicant were to be rejected. Thus, the Applicant humbly submits
\nthe definition of \u201cdisputed tax\u201d gets duly satisfied in the facts under
\nconsideration. For the sake of easy reference, the Applicant makes a
\nfollowing table depicting the quantum \u2018disputed tax\u2019 under
\nconsideration separately year wise:
\nAssessment Years Disputed Tax (Amounts in Rs.)
\n1988-89 3,192\/-
\n1989-90 74,228\/-
\n1990-91 96,577\/-
\n1991-92 3,370\/-
\n1992-93 46,971\/-
\n1993-94 1,34,400\/-
\n1994-95 1,48,435\/-
\n1995-96 76,127\/-
\n1996-97 75,555\/-
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\n1997-98 2,79,116\/-
\n1998-99 17,432\/-
\n10.1. Section 2(1)(a)(v):- Section 2(1)(a) defines the terms \u201cappellant\u201d
\nand Section 2(1)(a)(v) as under:-
\n\u201cperson who has filed an application for revision under section 264
\nof the Income Tax Act and such application is pending on specified
\ndate\u201d
\nThe Applicant submits that since his applications for revision for the
\nyears under consideration are pending on specified date (i.e.
\n31.01.2020), the Applicant is an \u201cappellant\u201d as per the aforesaid
\ndefinition.
\n10.5 Section 2(1)(o) of \u201cthe Act, 2020\u201d defines tax arrears as
\nunder:-
\n\u201c(o) Tax arrears means,
\n(i) \u201cThe aggregate amount of disputed tax, interest chargeable
\nor charged on such disputed tax, and penalty leviable or levied on
\nsuch disputed tax\u201d.
\nThe Applicant submits that from the aforesaid table, it is discernible
\nthat the amount \/ quantum of disputed tax is pending for all the
\nyears under consideration and thus, the definition of \u201cdisputed tax\u201d
\nduly gets satisfied in the present facts.
\n10.6 Now, proceeding further the Applicant draws Your
\nHonour\u2019s attention to section 3 and section 4 of the Act, 2020 and
\nsubmits that a conjoint reading of both the sections lays down the
\nprocedure to be adopted\/ followed by a person\/ declarant under
\nthe scheme after satisfying the aforesaid eligible conditions. The
\nrelevant parts of Section 3 and 4 of the Act, 2020 reads as under:-
\nSection 3: Subject to the provisions of this Act, where a
\ndeclarant files [under the provisions of this Act on or before such
\ndate as may be notified], a declaration to the designated authority
\nin accordance with the provisions of Section 4 in respect of tax
\narrears, then notwithstanding anything contained in the income tax
\nAct or any other law for the time being in force, the amount
\npayable by the declarant under this Act shall be as under, namely
\n(a) Where the tax arrears is the aggregate amount of disputed
\ntax, interest chargeable or charged on such disputed tax, and
\npenalty leviable or levied on such disputed tax\u201d, in that case, the
\namount payable under this Act shall be the amount of disputed
\ntax\u201d.
\nSection 4 (1) The declaration referred to in section 3 shall be
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\nfiled by the declarant before the designated authority in such form
\nand verified in such manner as may be prescribed.
\n10.7 From the aforesaid sections, the Applicant submits that
\nthe applications filed by him under the scheme with the intention to
\nsettle the dispute in relation to \u201cdisputed tax\u201d for the years under
\nconsideration are valid and thus, the Applicant requests the learned
\ncompetent authority (i.e. the learned PCIT) to process the said
\napplications and oblige.
\n11 Now, the Applicant specifically deals with the
\nobjections raised by Your Honour in the mail\/ reply dated 3rd
\nDecember, 2020. The relevant part of the said mail\/ notice is
\nreproduced as under:
\n\u201c The main ground of appeal as per your petition u\/s. 264 of
\nthe I.T. Act is to direct the A. O. to give credit to regular tax paid
\nchallan\u2019s of A. Y. 1987-88 at Rs.12,43,000\/- to various years i.e. for
\nA. Y. 1988 to 1998 so that the interest u\/s. 234B and 220(2) of the
\nAct could be reduced considerably. There is no dispute on the
\nincome arrived for A. Y. 1987-1998 in the order passed u\/s. 154 of
\nthe I. T. Act dated 16.04.2018 whereas in your application in form
\n1 schedule X. for A. Y. 1988 to 1998 disputed income is shown nil,
\nhowever, you have calculated disputed tax. On perusal of the order
\npassed u\/s. 154 of the I. T. Act and I.T. N.S150 for A. Y, 1987 to
\n1998 dated 16.04.2018 it is seen that Income tax is correctly
\ncalculated, there is no dispute in income tax calculation however
\nyou have mentioned disputed tax against undisputed income in
\nForm-I.\u201d
\n11.1 The Applicant at the outset submits that the aforesaid
\nobjection is factually incorrect. From the facts narrated in the
\napplications filed u\/s. 264 of the Act as well as the present
\ncorrespondence, it is clear that the Applicant has challenged the
\ninaction on the part of the learned AO, with regard to granting
\ncredit of taxes of Rs.12,43,000\/- paid by the Applicant. Thus, the
\nmain dispute under consideration is \u201cnon-allowance of tax credit of
\nRs.12,43,000\/- for the relevant years.\u201d The Applicant draws Your
\nHonour\u2019s attention tot he specific prayers sought in his revision
\napplications which are self-explanatory and factually support the
\naforesaid contention of the Applicant.
\n\u201cThus, the Applicant prays that your honours may be pleased to:
\nA. The Ld. A. O. may be directed to compute the tax demand for
\nA Y 1987-88 to A Y 1998-99 and demand may be raised after giving
\ncredit of the taxes paid amounting to Rs.12,43,000\/- which have
\nbeen adjusted in the impugned order against A Y 1987-88 only.
\nB. The Ld AO may be directed to compute the tax demand for
\nA Y 1987-88 to 1998-99 by restricting the charge of the interest
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\nu\/s. 220(2) of the Act till October\u2019 2013.
\nC. That, your honours may be pleased to pass such further and
\nother order as the facts and circumstances of the case may require.\u201d
\nIn the light of the aforesaid submission, the Applicant submits that
\nit is incorrect to mention that the Applicant has raised only one
\nissue (i.e. the issue of computation of interest u\/s. 234 and 220(2)
\nof the Act) in his revision applications for the years under
\nconsideration. It is submitted that adjustment\/ credit of taxes paid
\non regular assessment is a statutory right of the Applicant\/ assessee
\nand the same cannot be equated with or considered as \u201cdisputed in
\nrelation to calculation of interest\u201d merely on the fact that the issue
\nof tax credit has a consequential effect on the interest calculation.
\nThus, the Applicant states that the first objection as raised by Your
\nHonour is contrary to the provisions of the Act.
\n11.2 In the said notice, Your Honour has observed that there
\nis no undisputed income in relation to disputed tax. On the said
\nobservation, the Applicant submits that the scheme has nowhere
\nenunciated a pre-condition of existence of \u201cdisputed income\u201d in
\norder to settle the quantum of disputed tax. It is pertinent to note
\nthat the definition of disputed tax operated separately without
\nbearing any nexus with the quantum of disputed income. As
\nexplained herein above, the disputed tax is computed by
\nconsidering tax which would be payable by an Applicant if his
\nappeal\/ application u\/s. 264 was to be rejected without having any
\nrelevance of quantum of the disputed income involved in such an
\nappeal or a revision application. Even the scheme defines disputed
\nincome in a reverse manner giving reference to the quantum of
\ndisputed tax. The definition of disputed income mentioned u\/s.
\n2(1)(g) of the \u201cThe Act, 2020\u201d reads as under:-
\n\u201cDisputed income\u201d in relation to an assessment year, means the
\nwhole or so much of the total income as is relatable to the disputed
\ntax.\u201d
\nIn the light of the aforesaid submission, the Applicant states that
\nthe Applications preferred by him are in consonance with the
\nprovisions of the Act, 2020 and requests Your Honour to process
\nthe same.
\n12. Before closing the present submission, the Applicant clarifies
\nthat he has not made any elaborate submissions on the merits of
\nthe applications filed by him u\/s. 264 of the Act and the present
\nsubmission is limited only to the aspect of the validity\/ eligibility of
\nthe Applicant\u2019s application filed for the respective years under the
\nscheme. Further, the Applicant in order to avoid unnecessary
\nrepetition of the documents which have already been attached to
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\nhis revision applications prefer not to submit the same one more
\ntime with the present submission. However, the Applicant mentions
\nthat if Your Honour seeks any document\/ clarification, the
\nApplicant shall be pleased to provide. In the view of the above, the
\nApplicant requests shall be pleased to provide. In the view of the
\nabove, the Applicant requests Your Honour to accept his all
\napplications and process the same under the scheme.\u201d
\n17 Thereafter, admittedly, an opportunity of personal hearing
\nwas given to the Petitioner, wherein the aforesaid submissions were
\nreiterated. However, Respondent No.2 has rejected the applications by
\nupdating the status on the e-filing portal of the Petitioner on 30th January,
\n2021, which according to the Petitioner, has been done in an arbitrary
\nmanner without passing any order and without assigning any reason for
\nthe same and, therefore, he prays that the 2nd Respondent be directed to
\naccept the Form-1 declarations filed by the Petitioner.
\n18 Learned Counsel for the Petitioner Mr. K. Gopal reiterates the
\nsubmissions made in the Petition and the Rejoinder as he purports to take
\nus through the provisions of Section 2(1)(a) of the DTVSV Act with
\nrespect to the definition of \u201cAppellant\u201d. He submits as referred to herein
\nabove earlier that pursuant to Section 2(1) (a)(v), in view of the
\npendency of the Petitioner\u2019s application for revision u\/s. 264 of the
\nIncome Tax Act, Petitioner is eligible Appellant. The said provision is
\nreproduced as under:-
\n\u201c2 Definitions:- (1) In this Act, unless the context otherwise
\nrequires – \u201c(a) \u2018appellant\u2019 means –
\n(i) to (iv) \u2026. \u2026. \u2026.. \u2026.
\n(v) a person who has filed an application for revision under
\nsection 264 of the Income Tax Act and such application is pending
\nas on the specified date.\u201d
\n19 He also takes us to the definition of \u201cdisputed income\u201d which
\nis defined in Section 2(1)(g), and which is quoted as under:-
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\n(g) \u201cdisputed income\u201d in relation to an assessment year, means
\nthe whole or so much of the total income as is relatable to the
\ndisputed tax.\u201d
\n20 He submits that, it is clear from the above definition that
\ndisputed income is something which is relatable to the disputed tax and
\nnot the other way round. He, submits that, therefore, the definition of
\ndisputed tax in Section 2(1)(j) (F) becomes very much relevant. The same
\nis quoted as under:-
\n(j) \u201cdisputed tax\u201d in relation to an assessment year or financial
\nyear, as the case may be, means the income tax, including surcharge
\nand cess (hereafter in this clause referred to as the amount of tax)
\npayable by the appellant under the provisions of the Income Tax
\nAct, 1961 (43 of 1961), as computed hereunder:-
\n\u2026. \u2026. \u2026. \u2026. \u2026. \u2026.
\n\u2026. \u2026. \u2026. \u2026. \u2026. \u2026.
\n(F) in a case where an application for revision under section 264
\nof the Income Tax Act is pending as on the specified date, the
\namount of tax payable by the appellant if such application for
\nrevision was not to be accepted.\u201d
\n21 He submits that the disputed tax in the case of Petitioner
\nwould mean the amount of income tax including surcharge and cess
\npayable by the Appellant under the Income Tax Act, if the application for
\nrevision u\/s. 264 of the Act was not to be accepted. According to him, if
\nthe Petitioner\u2019s Revision Application for the Assessment Years 1988-89 to
\n1998-99, which are pending before the PCIT as on 31st January, 2020 are
\nrejected i.e. if the main contention of granting credit\/ adjustment of taxes
\nof Rs.12,43,000\/- against revised demands of subsequent years (i.e. not
\nincluding Assessment Year 1987-88) were not accepted, then Petitioner
\nwould be liable to pay a total demand of Rs.88,90,180\/- including income
\ntax, interest. Learned Counsel also draws our attention to Section 2(1)(o)
\nof the DTVSV Act, which defines tax arrear as under:-
\n\u201c(o) Tax arrears means, –
\n(i) \u201cThe aggregate amount of disputed tax, interest chargeable
\nor charged on such disputed tax and penalty leviable or levied on
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\nsuch disputed tax.\u201d.
\n22 He submits that considering that since the total amount of
\ndemand upon rejection will have a substantial interest component u\/s.
\n234B and 220(2) of the Income Tax Act, the definition of \u2018tax arrears\u2019 as
\nabove also gets satisfied in the facts of the case. He, therefore submits that
\nit is not correct for the Revenue to say that there is no dispute in income
\ntax calculation. He would submit that there is disputed tax against the
\nincome as declared in Form-1 and which is a subject matter of pending
\nRevision Application. Therefore, to say that the disputed income is \u2018Nil\u2019
\nis not correct. Referring to the 1st Respondent\u2019s e-mail communication
\ndated 3rd December, 2020, he would submit that the main dispute under
\nconsideration is disallowance of tax credit of Rs.12,43,000\/- for the
\nrelevant years and that it is incorrect to mention that same is being
\ndone to considerably reduce interest u\/s. 234 B and 220(2) of the Income
\nTax Act. He submits that adjustment\/credit of taxes paid on regular
\nassessment is a statutory right of the Applicant\/ Assessee and the same
\ncannot be equated with or considered as \u2018dispute in relation to calculation
\nof interest\u2019 merely on the fact that the issue of tax credit has a
\nconsequential effect on the interest calculation.
\n23 He would submit that by Petitioner\u2019s reply dated 5th
\nDecember, 2020, it was explained as to how there was disputed tax and in
\nview of the definition of disputed tax as above, what is relevant is that,
\nthere should be disputed tax, and disputed income, in the context of the
\nDTVSV Act, is to be determined on the basis of the disputed tax and not
\nthe other way around. He submits that, therefore, the department has
\ngrossly erred in rejecting the applications made under the DTVSV Act.
\n24 Mr. Gopal, learned Counsel for the Petitioner would submit
\nthat Petitioner does not fall under section 4(6) nor within the
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\ndisqualifications provided in Section 9 of the DTVSV Act, a fact which is
\nnot disputed by the petitioner and, therefore, Respondent No.2 is not
\njustified in rejecting the declarations filed by Petitioner under Section 4(1)
\nof the DTVSV Act.
\n25 He also submits that the Respondent within the time period
\nprescribed under Section 5(1) of the Act i.e. within 15 days from the date
\non which the declaration is filed, is required to determine disputed tax
\npayable under the DTVSV Act which may not be the same as declared by
\nthe Petitioner in the Forms 1 and 2 but the Respondent has no jurisdiction
\nto reject the valid declaration filed by the Petitioner.
\n26 Mr. Gopal, learned Counsel for the Petitioner submits that the
\nobject behind the enactment is to settle tax disputes and to reduce
\nlitigation. The Act confers benefits upon tax payers, who can put an end
\nto the litigation by paying specified percentages of tax and obtain
\nimmunity from penalty and prosecution and when Petitioner has come
\nforward and filed valid declarations, the Designated Authority instead of
\nissuing Form 3 u\/s. 5 of the DTVSV Act has simply updated the portal on
\n30th January, 2021 with the remark \u201cRejected\u201d which is not contemplated
\nin the scheme of the DTVSV Act.
\n27 He would, therefore, submit that this is a fit case for
\ninterference by this Court and accordingly submits that the Petition as
\nprayed for, be allowed.
\n28 Per contra, the Revenue has filed its affidavit in reply where
\nit is admitted that Petitioner is an Appellant as per Section 2(1)(a)(v) of
\nthe DTVSV Act. Further stating that the applications of the Petitioner
\nhave not been rejected on that ground but on the ground that there is
\nno disputed tax.
\n29 Mr. Sham Walve, learned standing counsel for the Revenue
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\nseeks to rely upon and takes us through paragraphs 5, 8, 10, 11, 12 and
\n23 of the said reply. For the sake of convenience, the said paragraphs are
\nreproduced here under:-
\n\u201c5:- I say that, as per the definition of \u201cappellant\u201d mentioned in
\nSec.2(1)(a)(v) of The Direct Tax Vivad se Vishwas Act, 2020
\n(henceforth referred as DTVSV Act), the Petitioner is an appellant
\nunder DTVSV Act. Also, the Petitioner\u2019s case does not fall in any of
\nthe categories mentioned in Section 9 of DTVSV Act. Hence, the
\ncontention of the petitioner that he is an \u201cappellant\u201d under DTVSV
\nAct, is found to be correct and is not the reason for rejection of
\napplication under DTVSV Act, made by the appellant.
\n8:- On perusal of order passed u\/s. 154 of the Act, it is seen that
\nthe Income Tax (Income Tax including cess and surcharge) is
\ncorrectly calculated in the case of petitioner and no dispute in
\nincome tax calculation was raised. Further, it is noticed that the
\nprimary ground raised in revision u\/s. 264 of the Act, is to direct
\nthe A.O. to give credit of regular taxes challan\u2019s paid for A.Y. 1987-
\n88 of Rs.12,43,000\/- to A. Ys. 1988-89 to 1998-99 so that interest
\nu\/s. 234 B and 220(2) of the Act, could be reduced considerably.
\nAccordingly, appellant was asked as to why he has claimed
\n\u201cdisputed tax\u201d in Form-1 of DTVSV Act even though there is no
\ndisputed income in appellant\u2019s case. To which the appellant replied
\nthat \u2018disputed tax\u2019 u\/s. 2(1)(j)(f) which provides that \u201cin a case
\nwhere an application for revision u\/s. 264 of the Act, is pending as
\non specified date, the amount of tax payable by the appellant if
\nsuch application for revision was not to be accepted.\u201d
\nThe petitioner submitted that the revision application preferred u\/s.
\n264 of the Act, is pending and the petitioner would be liable to
\npay the total demand of Rs.88,90,180\/- if the main contention
\nof granting credit of taxes of Rs.12,43,000\/- against the revised
\ndemand of subsequent years is not accepted and the revision
\napplication filed by the petitioner is rejected. Thus, the definition
\nof \u2018disputed tax\u2019 gets duly satisfied in the facts under
\nconsideration. The appellant had further submitted that it is
\nincorrect to mention that he has raised only one issue (i.e. the
\nissue of computation of interest u\/s 234 and 220(2) of the Act, in
\nthe revision application.
\n10:- From plain reading of Sec. 2(j)(F) of DTVSV Act, 2020 it is
\nclear that disputed tax means the income tax including surcharge
\nand cess. Nowhere in Sec. 2(j)(F) of DTVSV Act, 2020, it is
\nmentioned that disputed tax includes interest viz. 234A, B, C or
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\n220(2) of the Act, etc. or credit of challans given or to be given etc.
\nThis definition of \u201cdisputed tax\u201d as per Sec. 2(j)(F) of DTVSV Act,
\n2020 is emphasized upon solely for the reason that the declaration
\nof petitioner\u2019s application under VSV Act, relates to the \u201cdisputed
\ntax\u201d. There after, query was raised on account of \u201cdisputed tax\u201d
\nagainst the Petitioner.
\nThe Petitioner vide submission made on 05.12.2020 submitted
\nthat the revision application preferred u\/s. 264 of the Act, is
\npending and the petitioner would be liable to pay the total
\ndemand of Rs.88,90,180\/- if the main contention of granting
\ncredit of taxes Rs.12,43,000\/- against the revised demand of
\nsubsequent years is not accepted and the revision application filed
\nby the petitioner is rejected. Thus, the definition of \u201cdisputed tax\u201d
\ngets duly satisfied in the facts under consideration.
\n11:- Careful perusal of the revision application u\/s. 264 of the Act,
\nand the above reply of the assessee, revealed that the petitioner
\nhas never contested against the income tax demand raised in order
\nu\/s. 154 of the Act, tax (i.e. income tax, including surcharge and
\ncess) calculated thereon from A. Y. 1987-88 to 1998-99. However,
\nthe only request or contention behind revision application made by
\nthe assessee is to compute the tax demand for A. Y. 1987-88 to
\n1998-99 after giving credit of the taxes paid amounting to
\nRs.12,43,000\/- which have been adjusted against A. Y. 1987-88
\nonly. Nowhere in the revision application u\/s. 264 of the Act, has
\nthe petitioner objected to the income tax demand (income tax
\nincluding surcharge and cess) raised by the AO for A. Ys. 1987-88
\nto 1998-99, in fact, he has only contended that the AO has treated
\nthe tax payments made by the petitioner against disputed demands,
\nonly against A. Y. 1987-88. Also, the AO determined the tax
\ndemand of Rs.90,77,170\/- of which principal tax demand is
\nRs.10,50,699\/- whereas balance is towards interest u\/s. 234 of
\nRs.32,40,483\/- and interest u\/s. 220(2) of the Act till 30.04.2018
\n(Rs.26,60,926). This reduction in demand is attributed to the fact
\nthat as per orders dt. 18.04.2018 for A. Y. 1987-88, the interest
\npayable to the assesee u\/s. 244A is calculated at 0.5% pm, whereas
\ninterest u\/s. 234B\/ 220(2) is computed at 1% pm. This results into
\nthe penalization of assesse, inspite of having paid taxes. In view of
\nthe above stated facts, the assessee\u2019 ground on which the appellant
\nwas defending that he has satisfied the definition of \u201cdisputed tax\u201d
\nas per DTVSV Act, is infructuous.
\n12:- I say that the petitioner under the revision petition u\/s. 264
\nof the Act, has applied for waiver of interest u\/s. 220(2) of the Act,
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\neven though the matter does not fall under the ambit of the
\nprovisions of Sec. 264 of the Act. The revision petition u\/s. 264 of
\nthe Act cannot be a remedy for waiver of interest u\/s. 220 (2) of
\nthe Act. The petitioner for waiver of interest has to apply to the
\nappropriate authority and revision petition u\/s. 264 of the Act
\ncannot be a route for waiver of interest u\/s. 220(2) of the Act.
\n23:- With reference to paragraphs 3.10(iv) of the petition, I say
\nthat the contention of the petitioner that definition of \u2018tax arrears\u2019
\nas per provisions of Sec.2(1)(o) of DTVSV Act, is satisfied is found
\nto be correct. In fact the petitioner himself if accepting the fact that
\nthe disputed tax for A.Ys. 1988-89 to 1998-99 and tax arrears
\nimplies to the same demand. For further clarity:
\nDisputed Tax \u2013 Income Tax including surcharge and cess-
\nTax Arrears \u2013 Disputed tax plus interest and penalty leviable or
\nlevied. Hence, the petitioner himself is contracting his statement
\nmade in Para 3.10(iv) that he has satisfied the definition of
\n\u201cdisputed tax\u201d as per Sec.2(1)(j)(F) of DTVSV Act, simply for the
\nfact that the \u201cdisputed tax\u201d which the petitioner has declared in
\napplication under DTVSV Act, is nothing but the \u201cTax Arrears\u201d and
\nthis is clear from petitioner\u2019s explanations given in various
\nsubmissions and in this Para as well.\u201d
\n30 The learned Counsel for the Revenue submits that there has
\nbeen no challenge by the Petitioner to the income tax demand and,
\ntherefore, there is no disputed income nor disputed tax. Petitioner is only
\nseeking remedy of waiver of interest which cannot be by way of an
\napplication under Section 264 of the Income Tax Act. He submits that
\nPetitioner is, therefore, not entitled to the reliefs claimed as rejections by
\nthe designated authority are justified.
\n31 We have heard learned Counsel for the parties. We have also
\nwith their assistance, perused the papers and proceedings in the matter as
\nwell as the relevant provisions of the DTVSV Act as well as the DTVSV
\nRules.
\n32 The basic facts set out above are not in dispute. Without
\ngetting into the merits of the demands by the Revenue or the Application
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\nfor Revision under Section 264 of the Income Tax Act by the Petitioner, it
\nwould be relevant to note that, it is not in dispute that Petitioner had filed
\napplication under Section 264 of the Income Tax Act for adjustment\/credit
\nof Rs.12,43,000\/-paid earlier in respect of the tax demands for
\nAssessment Years 1988-89 to 1998-99 as according to him, this amount
\nhad been adjusted only against the demand for the A.Y 1987-88. While
\nthis application was pending, the Direct Tax Vivad Se Vishwas Act, 2020
\ncame to be enacted followed by Direct Tax Vivad Se Vishwas Rules, 2020.
\nPetitioner filed applications under the DTVSV Act and Rules vide
\ndeclarations in Form-1 dated 18th November, 2020 and waiver
\nundertakings in Form-2 for each of the 11 years for the period 1988-89 to
\n1998-99 to avail of beneficial tax payments to end the litigation with the
\nRevenue-Authorities. Pursuant to the filing of these applications, on 3rd
\nDecember, 2020, Respondent No.1 called upon the Petitioner to submit
\nworking of disputed tax in relation to undisputed income for A.Y 1987-88
\nto 1998-99, stating that, Petitioner had mentioned disputed tax in the
\nForm-1 despite the disputed income shown as \u2018Nil\u2019 in the 154 proceedings,
\ntax having been calculated correctly for Assessment Years 1987 to 1998
\nand there being no dispute in income tax calculation and despite that, the
\nPetitioner had calculated disputed tax and filed the declarations under the
\nDTVSV Act. The main purpose of the application under section 264 of the
\nIncome Tax Act being only to considerably reduce the interest under
\nSections 234-B and 220(2) of the Income Tax Act by seeking to adjust the
\ncredit of regular tax paid challans for Assessment Year 1987-88 of
\nRs.12,43,000\/- to various years i.e. to Assessment Years 1988-89 to
\n1998-99 even though Petitioner would be liable to pay a total demand of
\nRs.88,90,180\/- including a large interest component if the revision
\napplication under section 264 was to be rejected.
\n33 The issue really is whether Petitioner satisfies the definition of
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\n\u2018disputed tax\u2019 as contained in the DTVSV Act and Rules so as to be
\nconsidered to have filed a valid declaration in Form-1 and waiver
\nundertaking in Form-2. Going by the above submission and the definition
\nof disputed tax as contained in section 2(1)(j)(F) of the DTVSV Act as
\ncontended by the Petitioner, it appears from the facts that the Petitioner
\nwould fall within the said definition. We find merit in the submissions
\nmade on behalf of the Petitioner.
\n34 It would, therefore be apposite to refer to the legislative
\nbackground of the DTVSV Act. For this purpose, firstly, the relevant
\nportion of the budget speech of the Hon\u2019ble Finance Minister made on 1st
\nFebruary, 2020 is quoted as under:-
\n\u201cSir, in the past our government has taken several measures
\nto reduce tax litigations. In the last budget, Sabka Vishwas Scheme
\nwas brought in to reduce litigation in indirect taxes. It resulted in
\nsettling over 1,89,000 cases. Currently, there are 4,83,000 direct tax
\ncases pending in various appellate forms i.e. Commissioner
\n(Appeals). ITAT, High Court and Supreme Court. This year, I
\npropose to bring a scheme similar to the indirect tax Sabka Vishwas
\nfor reducing litigations even in the direct taxes.
\nUnder the proposed \u2018Vivad se Vishwas\u2019 scheme, a taxpayer
\nwould be required to pay only the amount of the disputed taxes and
\nwill get complete waiver of interest and penalty provided the pays
\nby 31st March, 2020. Those who avail this scheme after 31st March,
\n2020 will have to pay some additional amount. The scheme will
\nremain open till 30th June, 2020.
\nTaxpayers in whose case appeals are pending at any level can
\nbenefit from this scheme.
\nI hope that taxpayers will make use of this opportunity to get
\nrelief from vexatious litigation process.\u201d
\n35 Thus, what was intended by the Hon\u2019ble Finance Minister was
\nto bring a scheme similar to the Sabka Vishwas (Legacy Dispute
\nResolution) Scheme, 2019 which pertained to indirect taxes. The object of
\nthe Vivad se Vishwas Scheme is to reduce litigations in direct taxes, where
\nthe tax payer would have to pay disputed tax.
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\n36 Also, the statement of objects and reasons for bringing the
\nsaid legislation, reads as under:-
\n\u201c Over the years, the pendency of appeals filed by taxpayers as
\nwell as Government has increased due to the fact that the number
\nof appeals that are filed is much higher than the number of appeals
\nthat are disposed. As a result, a huge amount of disputed tax
\narrears is locked-up in these appeals. As on the 30th November,
\n2019, the amount of disputed direct tax arrears is Rs.9.32 lakh
\ncrores. Considering that the actual direct tax collection in the
\nfinancial year 2018-19 was Rs.11.37 lakh crores, the disputed tax
\narrears constitute nearly one year direct tax collection.
\n2 Tax disputes consume copious amount of time, energy and
\nresources both on the part of the Government as well as taxpayers.
\nMoreover, they also deprive the Government of the timely collection
\nof revenue. Therefore, there is an urgent need to provide for
\nresolution of pending tax disputes. This will not only benefit the
\nGovernment by generating timely revenue but also the taxpayers
\nwho will be able to deploy the time, energy and resources saved by
\nopting for such dispute resolution towards their business activities.
\n3 It is, therefore, proposed to introduce the Direct Tax Vivad se
\nVishwas Bill, 2020, for dispute resolution related to direct taxes,
\nwhich, inter alia, provides for the following namely:-
\n(a) the provisions of the Bill shall be applicable to appeals filed
\nby tax payers or the Government, which are pending with the
\nCommissioner (Appeals), Income Tax Appellate Tribunal, High
\nCourt or Supreme Court as on the 31st day of January, 2020
\nirrespective of whether demand in such cases is pending or has
\nbeen paid;
\n(b) the pending appeal may be against disputed tax, interest or
\npenalty in relation to an assessment or reassessment order or
\nagainst disputed interest, disputed fees where there is no disputed
\ntax. Further, the appeal may also be against the tax determined on
\ndefaults in respect of tax deducted at source or tax collected at
\nsource.
\n(c) in appeals related to disputed tax, the declarant shall not pay
\nthe whole of the disputed tax if the payment is made before the 31st
\nday of March, 2020 and for the payments made after the 31st day of
\nMarch, 2020 but on or before the date notified by Central
\nGovernment, the amount payable shall be increased by 10 per cent
\nof disputed tax.
\n(d) in appeals related to disputed penalty, disputed interest or
\ndisputed fee, the amount payable by the declarant shall be 25 per
\ncent of the disputed penalty, disputed interest or disputed fee, as
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\nthe case may be if the payment is made on or before the 31st day of
\nMarch, 2020. If payment is made after 31st day of March, 2020 but
\non or before the date notified by Central Government, the amount
\npayable shall be increased to 30 per cent of the disputed penalty,
\ndisputed interest or disputed fee, as the case may be.
\n4 The proposed Bill shall come into force on the date it receives
\nthe assent of the President and declaration may be made thereafter
\nup to the date to be notified by the Government.\u201d
\n37 It therefore emerges that the DTVSV Act has been enacted to
\naddress the urgent need to provide for resolution of pending tax disputes
\nwhere a huge amount of disputed tax arrears of over Rs.9.32 lakh crores is
\nlocked-up. The DTVSV Act is aimed not only to benefit the Government by
\ngenerating timely revenue but also to benefit the taxpayers by providing
\nthem peace of mind, certainty and saving time and resources rather than
\nspending the same otherwise, enabling the taxpayers to be able to deploy
\nthe time, energy and resources saved, by opting for such dispute
\nresolution, towards their business activities. The Act confers benefit on the
\ntax payers who can put an end to tax litigation by paying specified
\npercentage of tax and obtain immunity from penalty and prosecution and
\nwaiver of interest. In the context of the issue at hand, it would be
\npertinent to refer to the preamble to the DTVSV Act.
\n38 The preamble clearly provides that this is an Act to provide
\nfor resolution of disputed tax and for matters connected therewith or
\nincidental thereto. The emphasis is on disputed tax and not on disputed
\nincome.
\n39 Also for the purpose of our discussion, it would be pertinent
\nto set forth the following provisions of the DTVSV Act.
\n\u201c2. Definitions \u2013 (1) In this Act, unless the context otherwise
\nrequires –
\n(a) \u2018appellant\u2019 means-
\n(i) a person in whose case an appeal or a writ petition or special
\nleave petition has been filed either by him or by the income-tax
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\nauthority or by both, before an appellant forum and such appeal or
\npetition is pending as on the specified date;
\n(ii) to (iv) \u2026. \u2026. \u2026. \u2026. \u2026. \u2026. \u2026. \u2026.
\n(v) a person who has filed an application for revision under
\nsection 264 of the Income tax and such application is pending as on
\nthe specified date.\u201d
\n\u201c(g) \u2013 disputed income \u2013 in relation to an assessment year, means
\nthe whole or so much of the total income as is relatable to the
\ndisputed tax.\u201d
\n\u201c(j) \u2018disputed tax\u2019, in relation to an assessment year or financial
\nyear, as the case may be, means the income tax, including surcharge
\nand cess (hereafter in this clause referred to as the amount of tax)
\npayable by the appellant under the provisions of the Income tax
\nAct, 1961 (43 of 1961), as computed hereunder:-
\n(A) in a case where any appeal, writ petition or special leave
\npetition is pending before the appellate forum as on the specified
\ndate, the amount of tax that is payable by the appellant if such
\nappeal or writ petition or special leave petition was to be decided
\nagainst him;
\n(B) in a case where an order in an appeal or in writ petition has
\nbeen passed by the appellate forum on or before the specified date,
\nand the time for filing appeal or special leave petition against such
\norder has not expired as on that date, the amount of tax payable by
\nthe appellant after giving effect to the order so passed;
\n(C) in a case where the order has been passed by the Assessing
\nOfficer on or before the specified date, and the time for filing
\nappeal against such order has not expired as on that date, the
\namount of tax payable by the appellant in accordance with such
\norder;
\n(D) in a case where objection filed by the appellant is pending
\nbefore the Disputed Resolution Panel under section144C o the
\nIncome-tax Act as on the specified date, the amount of tax payable
\nby the appellant if the Disputed Resolution Panel was to confirm the
\nvariation proposed in the draft order;
\n(E) in a case where Disputed Resolution Panel has issued any
\ndirection under sub-section (5) of section 144C of the Income-tax
\nAct and the Assessing Officer has not passed the order under subsection
\n(13) of that section on or before the specified date, the
\namount of tax payable by the appellant as per the assessment order
\nto be passed by the Assessing Officer under sub-section (13)
\nthereof;
\n(F) in a case where an application for revision under section 264
\nof the Income-tax Act is pending as on the specified date, the
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\namount of tax payable by the appellant if such application for
\nrevision was not to be accepted.\u201d
\n(o) tax arrear means –
\n(i) the aggregate amount of disputed tax, interest chargeable or
\ncharged on such disputed tax, and penalty leviable or levied on
\nsuch disputed tax; or
\n(ii) disputed interest ; or
\n(iii) disputed penalty; or
\n(iv) disputed fee.\u201d
\n40 Section 3 with respect to the tax amount payable by declarant
\nalso assumes significance and is quoted hereunder:-
\n\u201c3:- Amount payable by declarant:- Subject to the provisions of
\nthis Act, where a declarant files under the provisions of this Act on
\nor before the last date, a declaration to the designated authority in
\naccordance with the provisions of section 4 in respect of tax arrear,
\nthen, notwithstanding anything contained in the Income-tax Act or
\nany other law for the time being in force, the amount payable by
\nthe declarant under this Act shall be as under, namely:-
\nSl.
\nNo.
\nNature of tax appear Amount payable
\nunder this Act on or
\nbefore 31st day of
\nMarch, 2020
\nAmount payable under
\nthis Act on or after the 1st
\nday of April, 2020 but on
\nor before the last date.
\n(a) Where the tax arrear is the
\naggregate amount of disputed
\ntax, interest chargeable or
\ncharged on such disputed tax
\nand penalty leviable or levied
\non such disputed tax.
\nAmount of the
\ndisputed tax
\nThe aggregate of the
\namount of disputed tax
\nand ten per cent of
\ndisputed tax; provided
\nthat where the ten per
\ncent of disputed tax
\nexceeds the aggregate
\namount of interest
\nchargeable or charged on
\nsuch disputed tax and
\npenalty leviable or levied
\non such disputed tax, the
\nexcess shall be ignored
\nfor the purpose of
\ncomputation of amount
\npayable under this Act.
\n(b) Where the tax arrear includes
\nthe tax, interest or penalty
\ndetermined in any assessment
\non the basis of search under
\nsection 132 or section 132A
\nof the Income Tax Act,
\nThe aggregate of the
\namount of disputed
\ntax, and twenty five
\nper cent of the
\ndisputed tax; provided
\nthat where the twentyfive
\nper cent of
\nThe aggregate of the
\namount of disputed tax
\nand thirty-five percent of
\ndisputed tax; provided
\nthat where the thirty-five
\nper cent of disputed tax
\nexceeds the aggregate
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\ndisputed tax exceeds
\nthe aggregate amount
\nof interest chargeable
\nor charged on such
\ndisputed tax and
\npenalty leviable or
\nlevied on such
\ndisputed tax, the
\nexcess shall be
\nignored for the
\npurpose of
\ncomputation of
\namount payable under
\nthis Act.
\namount of interest
\nchargeable or charged on
\nsuch disputed tax and
\npenalty leviable or levied
\non such disputed tax, the
\nexcess shall be ignored
\nfor the purpose of
\ncomputation of amount
\npayable.
\n(c) Where the tax arrear relates
\nto disputed interest or
\ndisputed penalty or disputed
\nfee
\nTwenty-five per cent
\nof disputed interest or
\ndisputed penalty or
\ndisputed fee.
\nThirty-five per cent of
\ndisputed interest or
\ndisputed penalty or
\ndisputed fee.
\nProvided that in a case where an appeal or writ petition or
\nspecial leave petition is filed by the income-tax authority on any
\nissue before the appellate forum, the amount payable shall be onehalf
\nof the amount in the table above calculated on such issue, in
\nsuch manner as may be prescribed:
\nProvided further that in a case where an appeal is filed before
\nthe Commissioner (Appeals) or objections is filed before the
\nDispute Resolution Panel by the appellant on any issue on which he
\nhas already got a decision in his favour from the Income-tax
\nAppellate Tribunal (where the decision on such issue is not reversed
\nby the High Court or the Supreme Court) or the High Court (where
\nthe decision on such issue is not reversed by the Supreme Court),
\nthe amount payable shall be one-half of the amount in the table
\nabove calculated on such issue, in such manner as may be
\nprescribed:
\nProvided also that in a case where an appeal is filed by the
\nappellant on any issue before the Income-tax Appellate Tribunal on
\nwhich he has already got a decisions in his favour from the High
\nCourt (where the decision on such issue is not reversed by the
\nSupreme Court), the amount payable shall be one-half of the
\namount in the table above calculated on such issue, in such manner
\nas may be prescribed.\u201d
\nCounsel for the parties submit that the date in the second
\ncolumn is now 30th day of April, 2021 instead of 31st day of March, 2020.
\n41 Sections 4 and 5 read as under:-
\n\u201c4. (1) The declaration referred to in section 3 shall be filed by
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\nthe declarant before the designated authority in such form and
\nverified in such manner as may be prescribed.
\n(2) Upon the filing the declaration, any appeal pending before the
\nIncome Tax Appellate Tribunal or Commissioner (Appeals), in
\nrespect of the disputed income or disputed interest or disputed
\npenalty or disputed fee and tax arrear shall be deemed to have been
\nwithdrawn from the ate on which certificate under sub-section (1)
\nof section 5 is issued by the designated authority.
\n(3) Where the declarant has filed any appeal before the appellate
\nforum or any writ petition before the High Court or the Supreme
\nCourt against any order in respect of tax arrear, he shall withdraw
\nsuch appeal or writ petition with the leave of the Court wherever
\nrequired after issuance of certificate under sub-section (1) of
\nsection 5 and furnish proof of such withdrawal along with the
\nintimation of payment to the designated authority under subsection
\n(2) of section 5.
\n(4) Where the declarant has initiated any proceeding for
\narbitration, conciliation or mediation, or has given any notice
\nthereof under any law for the time being in force or under any
\nagreement entered into by India with any other country or territory
\noutside India whether for protection of investment or otherwise, he
\nshall withdraw the claim, if any, in such proceedings or notice after
\nissuance of certificate under sub-section (1) of section 5 and furnish
\nproof of such withdrawal along with the intimation of payment to
\nthe designated authority under sub-section (2) of section 5.
\n(5) Without prejudice to the provisions of sub-sections (2), (3) and
\n(4), the declarant shall furnish an undertaking waiving his right,
\nwhether direct or indirect, to seek or pursue any remedy or any
\nclaim in relation to the tax arrear which may otherwise be available
\nto him under any law for the time being in force, in equity, under
\nstatute or under any agreement entered into by India with any
\ncountry or territory outside India whether for protection of
\ninvestment or otherwise and the undertaking shall be made in such
\nform and manner as may be prescribed.
\n(6) The declaration under sub-section (1) shall be presumed never
\nto have been made if,-
\n(a) any material particular furnished in the declaration is
\nfound to be false at any stage;
\n(b) the declarant violates any of the conditions referred to in
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\nthis Act;
\n(c) the declarant acts in any manner which is not in
\naccordance with the undertaking given by him under subsection(
\n5),
\nand in such cases, all proceedings and claims which were
\nwithdrawn under section 4 and all the consequences under the
\nIncome Tax Act against the declarant shall be deemed to have been
\nrevived.
\n(7) No appellate forum or arbitrator, conciliator or mediator shall
\nproceed to decide any issue relating to the tax arrear mentioned in
\nthe declaration in respect of which an order has been made under
\nsub-section (1) of section 5 by the designated authority or the
\npayment of sum determined under that section.
\n5.(1) The designated authority shall, within a period of fifteen days
\nfrom the date of receipt of the declaration, by order, determine the
\namount payable by the declarant in accordance with the provisions
\nof this Act and grant a certificate to the declarant containing
\nparticulars of the tax arrear and the amount payable after such
\ndetermination, in such form as may be prescribed.
\n(2) The declarant shall pay the amount determined under subsection
\n(1) within fifteen days of the date of receipt of the
\ncertificate and intimate the details of such payment to the
\ndesignated authority in the prescribed form and thereupon the
\ndesignated authority shall pass an order stating that the declarant
\nhas paid the amount.
\n(3) Every order passed under sub-section (1), determining amount
\npayable under this Act, shall be conclusive as to matters stated
\ntherein and no matter covered by such order shall be reopened in
\nany other proceeding under the Income Tax Act or under any other
\nlaw for the time being in force or under any agreement, whether for
\nprotection of investment or otherwise, entered into by India with
\nany other country or territory outside India.\u201d
\n42 Under the provisions of this Act, tax payers have been given
\nan option to settle their tax disputes by making a declaration to
\ndesignated authority and paying specified percentage of disputed tax as
\nper section 3 of the DTVSV Act.
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\n43 Section 3 of the DTVSV Act provides that where a declarant
\nfiles a declaration to the designated authority in accordance with the
\nprovisions of section 4 in respect of tax arrears, the amount payable
\nwould be the amount of disputed tax as is applicable in the cases referred
\nto in the table in the said section. Under section 4, the form of declaration
\nand the particulars to be furnished before the designated authority are
\nprovided for. Rules stipulate that declaration has to be filed in Form-1
\nunder section 4(1) of the Act read with Rule 3(1) of the Rules. Also an
\nundertaking in Form-2 under section 4(5) of the Act read with Rule 3(2)
\nof the Rules is to be filed by appellant under the Act, which admittedly has
\nbeen filed by the petitioner.
\n44 It is stated in section 4 (5) that, declarant is to furnish an
\nundertaking waiving his right to seek or pursue any remedy or claim in
\nrelation to the tax arrears which may be available to him in law or equity
\nunder statute or under any agreement.
\n45 It is also stated in section 4(6) that declaration under sub
\nsection 1 shall be presumed never to have been made if-
\n(a) any material particular(s) furnished in the declaration, is
\nfound to be false at any stage;
\n(b) the declarant violates any of the conditions referred to in the
\nAct;
\n(c) the declarant acts in any manner which is not in accordance
\nwith the undertaking given by him under sub section (5)
\nand in such cases, all the proceedings and claims which were
\nwithdrawn under section 4 and all the consequences under the
\nIncome Tax Act against the declarant shall be deemed to have been
\nrevived.
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\n46 Section 9 specifies the matters in respect of which the DTVSV
\nAct shall not apply, such as where the tax arrears in respect of which, the
\ndisputed tax amount exceeds Rs.5 crores in respect of assessments made
\nunder section 143(3) or 144 or 153-A or 153-C on the basis of search
\ninitiated under Section 132 or 132-A or if on or before the date of filing of
\nthe declarations, the tax arrears relates to an assessment year in respect of
\nwhich prosecution has been instituted or if it relates to un-disclosed
\nincome or the source located out side India or un-disclosed asset located
\nout side India or it relates to assessment or re-assessment made on the
\nbasis of information received under the agreement refers to in section 90
\nor section90-A of the Income Tax Act, in relation to any tax arrears, or to
\npersons in respect of whom detentions have been made under COFEPOSA
\nAct, 1974 or in respect of prosecutions for any offence under UAPA, 1967,
\nNDPS 1985, Prevention of Corruption Act, 1988, PMLA 2002, Prohibition
\nof Benami Property Transaction Act, 1988 or such persons have been
\nconvicted of any such offences punishable under those Acts or to any
\nperson in respect of whom prosecution has been initiated by an income
\ntax authority for an offence punishable under the Indian Penal Code or for
\nthe purposes of enforcement of any civil law under Section 3 of the
\nSpecial Court (Trial and offence relating to transaction in securities) Act,
\n1992 etc.
\n47 It would also pertinent to quote the following provisions from
\nthe Direct Tax Vivad se Vishwas Rules 2020 (DTVSV Rules):-
\n\u201c2. Definition \u2013 In these rules, unless the context otherwise
\nrequires-
\n(b) \u2018dispute\u2019 means appeal, writ or special leave petition
\nfiled or appeal or special leave petition to be filed by the declarant
\nor the income-tax authority before the Appellate Forum, or
\narbitration, conciliation or mediation initiated or given notice
\nthereof, or objections filed on or to be filed under Section 264 of
\nthe Income-tax Act.\u201d
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\n\u201c3. Form of declaration and undertaking:- (1) The declaration
\nunder sub-section (1) of section 4 shall be made in Form-1 to the
\ndesignated authority.
\n(2) The undertaking referred to in sub-section (5) of section 4
\nshall be furnished in Form-2 along with the declaration.
\n(3) The declaration under sub-rule (1) and the undertaking
\nunder sub-rule (2), as the case may be, shall be signed and verified
\nby the declarant or any person competent to verify the return of
\nincome on his behalf in accordance with section 140 of the Incometax
\nAct,1961.
\n(4) The designated authority on receipt of declaration shall issue
\na receipt electronically in acknowledgment thereof.\u201d
\n\u201c4. Form of certificate by designated authority:- The designated
\nauthority shall grant a certificate electronically referred to in subsection
\n(1) of section 5 in Form 3.
\n7. Order by designated authority \u2013 the order by the designated
\nauthority under sub-section (2) of section 5, in respect of payment
\nof amount payable by the declarant as per certificate granted under
\nsub-section (1) of section 5, shall be in Form-5.\u201d
\n48 From the above exposition, what emerges is that for a
\ndeclarant to file a valid declaration, there should be disputed tax in the
\ncase of such a declarant. As can be seen from the aforesaid undisputed
\nfact that Petitioner having filed revision application under Section 264 of
\nthe Income Tax Act for the Assessment Years 1988-89 to 1998-99 for
\ncredit\/ adjustment of Rs.12,43,000\/- which application is pending before
\nthe Commissioner. Petitioner, admittedly being an eligible Appellant,
\nsquarely satisfies the definition of \u201cdisputed tax\u201d as contained in Section
\n2(1) (j)(F) of the DTVSV Act, 2020. This is because, if the revision
\napplication under Section 264 of the Income Tax Act is rejected, then the
\nPetitioner would purportedly be liable to pay a demand of Rs.88,90,180\/-
\nincluding income tax, interest. Petitioner as eligible Appellant has filed
\ndeclaration under section 4 with the designated authority under the
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\nprovisions of Section 4 of the DTVSV Act in respect of tax arrears which
\ninclude the disputed tax which will become payable as may be determined
\nby designated authority under Section 3. A look at definition of \u2018tax
\narrears\u2019 clearly refers to an aggregate of the amount of disputed tax,
\ninterest chargeable or charged on such disputed tax etc. determined
\nunder the provisions of Income Tax Act.
\n49 We are of the view that this is not only a case where there is a
\ndisputed tax but also tax arrears as referred to in section 3 of the DTVSV
\nAct. The respondents have not raised any objection under any provision
\nof the DTVSV Act or DTVSV Rules with respect to the declarations or
\nundertakings furnished by the Petitioner nor have they passed any order
\nlet alone a reasoned or speaking order rejecting the said declarations. The
\nRespondents have summarily rejected the declarations without their being
\nany such provision in the DTVSV Act or the Rules. There also does not
\nappear to be any fetter on the Designated Authority to determine disputed
\ntax of an amount other than that declared by the petitioner.
\n50 From a plain reading of the provisions of the DTVSV Act and
\nthe Rules set out above, it emerges that the Respondent- Designated
\nAuthority would have to issue Form-3 as referred to in Section 5 (1)
\nspecifying the amount payable in accordance with section 3 of the DTVSV
\nAct in the case of declarant who is an eligible appellant not falling under
\nsection 4(6) nor within the exceptions in section 9 of the DTVSV Act,
\nwhich fact appears to be undisputed. As also observed by us earlier, the
\ncase of the Petitioner would be covered by the definition of disputed tax
\nas per Section 2(1)(j)(F) of the DTVSV Act. It has to be kept in mind in
\nview of what has been observed by us earlier, that the DTVSV Act is a
\nbeneficial legislation for both the Revenue and the tax payer.
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\n51 In view of the aforesaid discussion, we are of the view that
\nthe Designated Authority under the DTVSV Act viz Respondent No.2 in
\nthis case is not justified in rejecting the declarations filed by the Petitioner.
\n52 Accordingly, we set aside the rejections. We direct the
\nRespondent No.2 to consider the applications made by Petitioner by way
\nof declarations dated 18th November, 2020 in Form-1 as per law and
\nproceed with according to the scheme of the DTVSV Act and Rules in the
\nlight of above discussion within a period of two weeks from the date of
\nthis order.
\n53 Petition is allowed in the above terms. No order as to costs.
\n54 Parties to act on an ordinary copy of this order duly
\nauthenticated by the Associate of this Court.
\n(ABHAY AHUJA,J.) (SUNIL P. DESHMUKH,J.)
\nS.R.JOSHI 33 of 33
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Before Hon\u2019ble High Court, the Petitioner challenged the arbitrary and unreasonable action of the Designated Authority (Respondent No.2) in rejecting the declarationfiled under the DTVSV Act. It was argued before the Hon\u2019ble High Court that thePetitioner\u2019s case doesn\u2019t fall under any of the disqualifications mentioned in section 9 of the DTVSV Act, 2020 and therefore, the Designated Authority has no power to reject the application without assigning any reason for the same. It was submitted before the Hon\u2019ble Court that the Petitioner has satisfied all the conditions to make the declaration under the DTVSV Act, 2020 and therefore, he is eligible to seek all the benefits under the said Act. On the other hand, the department argued that the declaration of the Petitioner is not valid as there cannot be any disputed tax in the absence of any disputed income. Thus, the declaration of the Petitioner has been rightly rejected<\/p>\n

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