Re: Constitutional validity – 2nd Proviso to Section 3 of VSVA

As per 2nd Proviso to Section 3 of VSVA “Provided further that in a case where an appeal is filed before the Commissioner (Appeals) or objections is filed before the Dispute Resolution Panel by the appellant on any issue on which he has already got a decision in his favour from the Income Tax Appellate Tribunal (where the decision on such issue is not reversed by the High Court or the Supreme Court) or the High Court (where the decision on such issue is not reversed by the Supreme Court), the amount payable shall be one-half of the amount in the Table above calculated on such issue, in such manner as may be prescribed”
The assessee is not given shelter of a Supreme Court judgement or jurisdictional High Court judgement, which is not of the assessee but having identical facts. Please provide further clarity.

Yes. On plain reading of the proviso, it seems to be ultra vires the Constitution.  One may also refer Q. No 28 and answers given by the CBDT .The decision of the Honourable Supreme Court is binding on all courts , Tribunals and tax authorities across the country as per the provisions of Article 141 of the Constitution of India . One may refer CWT v Aluminium Corporation of India Ltd ( 1972 ) 85 ITR 167 (SC) . There is no express provision in the Constitution like Article 141 , in respect of the High Courts . High Courts has the power of superintendence over the Tribunals and authorities under Article 227 of the Constitution .  In East India Commercial Co Ltd v Collector of customs AIR 1962 SC 1893 observed that “ we therefore , hold that the law declared by the highest court in the State is binding on authorities or Tribunals under its superintendence  and they cannot ignore it “  . Similar view is expressed by the Honourable Supreme Court in Baradakant  Mishra v. Bhimsen Dixit  AIR 1972 SC 2466 . 

Accordingly in an appropriate case it can be challenged before High Court  The  above issue was raised by the professionals  when the All India video Conference meeting was held on 6-4 -2020 which was organised by the ITAT . We can expect some clarification in the next set of Questions and answers by the CBDT .

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