Re: Revision- S.263 -Appeal
Whether a declaration u/s 4 can be filed by a person who has filed an appeal against the order u/s 263 for revision by the Commissioner directing the AO to make specific disallowance/addition?
Section 3 authorises the declarant to file a declaration u/s 4 in respect of tax arrears where an appeal is otherwise filed in time and is pending as on 31st March 2020. In the given case an appeal before the tribunal, against the order u/s 263, is filed in time and is pending before it on the specified date. The test that remains to be satisfied is whether there was any ‘tax arrear’ u/s 2(iv) on the specified date . The definition of the term ‘tax arrear’ signifies that there must be a ‘disputed tax’ that is determined under the provisions of the Act. The ‘disputed tax’ is defined by s. 2(j) to mean income tax payable under the Act where the appeal was to be decided against him. The moot questions therefore are;
- Whether any tax could have said to be determined under the provisions of the Act, and
- Whether such tax could be said to be payable by the appellant or not.
The issue on hand highlights the difficulty arising on account of meeting the conditions that require an AO to pass an order and determine the tax payable before a valid declaration can be filed under the scheme. In ordinary circumstances it appears that a declaration under the scheme cannot be filed. In the facts of the case, however, passing of an order by the AO is consequential to the order of the Commissioner who has given the clear directions to disallow/add the amount determined by him and also determine the tax payable on the revised income. The passing of the order therefore has been rendered to be a mere formality.
The Tribunal has numerous such appeals pending before it and it would be appropriate to treat such appeals as representing the cases where ‘disputed tax’ is held to be present and the appellant is held to be in ‘arrears of tax’ and therefore a declaration u/s 4 is held to be maintainable.
Clarification however confirming this view by the CBDT would help to settle many such cases under the scheme.
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