Rakesh Garg Vs PCIT Ajmer
Forum-Rajasthan High Court
Date-17th February 2022

Sub-Whether Appeal filed before ITAT after the cut-off date of 31/1/2020 and delay in filing the appeal having been condoned, the application under the Vivad Se Vishwas Act 2020 is eligible to be accepted or is to be rejected in terms of FAQ No 59 clarified by CBDT.

The Rajasthan high court in this case was considering a writ petition where the appellant had challenged the rejection of the application for settlement of the penalty levied u/s 271B of the Act amounting to Rs 1.50 lacs under the VSV Scheme on the pretext that the appeal as well as application for condonation of delay was filed after the issuance of the Circular dated 04-12-2020 by CBDT wherein while clarifying the said position in answer to fAQ NO 59, the CBDT had mandated that the appeal must be filed before the date of issuance of the Circular. The Chief Justice bench of Rajasthan High court however allowed the writ by relying on Boddu Ramesh v. Designated Authority reported in 2021 (6) TMI 1054 and Maheshbhai Shantilal Patel V. PCIT dated 23.09.2021 reported in 2021 (9) TMI 1237. The court also observed that the resolution of disputed taxes is prime purpose of enactment of the act and therefore an interpretation which would further this intention instead of restricting its scope is to be adopted. More importantly what the CBDT had done under its circular dated 04.12.2020 was to issue a clarification. A clarification by its very nature is declaratory. If for applicability of such clarification a cut off date is introduced it would run counter to the very concept of a clarification. If the CBDT circular is not read-down as to remove the rigors of the cut off date by holding that the same is not sacrosanct the same may suffer from vice of arbitrariness. The designated authority was thus directed to accept the application.

This judgement will be helpful in all similar cases where the Application under VSV has been rejected arbitrarily.

Ramesh Patodia
22-02-2022