Re: Appeal -Delayed

1. Whether on applying for the scheme for the quantum appeal pending before ITAT, whether penalty stands deleted / waived even if the penalty order is passed and a separate appeal is pending before any appellate forum. This is in light of the the language of s. 6 of the scheme –
_6. Subject to the provisions of section 5, the designated authority shall not institute any proceeding in respect of an offence; or impose or levy any penalty; or charge any interest under the Income-tax Act in respect of tax arrear.

2. Whether the delayed appeal which has not been condoned so far can be considered for Scheme

3. Whether for considering the disputed tax, the additional grounds with respect to the income should be considered for calculating disputed tax?

4. In case where matter is argued before ITAT and the order is awaited as on 31.01.20, can the assessee opt to go for the scheme. If yes, whether the amount of tax payable will be after giving effect to such ITAT order or before ?

1. If the quantum appeal and corresponding penalty appeal if appeal, if any, can be settled by paying 100% of disputed tax. If penalty is not levied, it cannot be levied in future due to section 6 of the Act. You may also refer to Circular no.7 of 2020, dated 04-03-2020. 

 

2. In  CIT v. Shatrusailya Digvijaysingh Jadeja (2005) 277 ITR 435/ 147 Taxman 566/ 197 CTR 590 (SC)  rendered in the context of similar provisions of KVSS, 1998, referring the judgement In the case of Dr. Mrs. Renuka Datla v. CIT (2003) 259 ITR 258 (SC)  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 'sham', 'ineffective' or 'infructuous'. 
3. In the case of Raja Kulkarni v. State of Bombay AIR 1954 SC 73, the Supreme 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 such 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.  Accordingly the court held that for the afore stated reasons, orders of the designated authority rejecting the declarations filed by the assessee were to be quashed. No infirmity, to that extent, was found in the impugned judgment of the High Court. The appeal was to be dismissed accordingly. 
4. In Tirupati Balaji Developers (P.) Ltd. v. State of Bihar [2004] 5 SCC 1, in which it has been held that an appeal does not cease to be an appeal though irregular and incompetent. 

 

5. It may be desirable to file application for condonation of delay and get the matter fixed only for condonation of delay. Second set of clarification is awaited from the Government where this aspect may be specifically dealt with. 
6. In Jehangir H.C . Jehangir v ITO ( 2015) 229 Taxman 392 ( Bom) (HC)  held that  issue specifically taken before the AO could not be refused  to be considered by Tribunal merely because the CIT (A)  did not have any view on it . Order of Tribunal was set aside.  Accordingly, the Querist can avail the benefit of VSVA. In respect of all the issues pending before the Tribunal In  All Cargo Global Logistics Ltd. v. Dy. CIT (2012) 137 ITD 26 / 72 DTR 1 / 146 TTJ 657 / 16 ITR 38 (SB)(Mum.)(Trib.)   the SB held that , a pure question of law arises for which facts are on record of the authorities below , the question should be allowed to be raised if it is necessary to assessee the correct tax liability . Revenue has challenged the order of Special Bench before the High Court  on other grounds and not on the issue of admission of additional grounds. CIT v. All Cargo Global Logistics Ltd. (2015) 374 ITR 645 / 120 DTR 89/279 CTR 389 / 232 Taxman 270 (Bom.)(HC) 
7. Accordingly the assessee can avail the benefit of the scheme in respect of entire appeal which is pending before the ITAT .     

 

 

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