The Delhi High Court has held that the pending review petition filed by the petitioner assessee against the dismissal of its special leave petition (SLP) should be considered a pending proceeding for the purposes of Direct Tax Vivad Se Vishwas Act, 2020 (DTVSV).
The bench of Justice Yashwant Varma and Justice Ravinder Dudeja has observed that DTVSV Act is a beneficial legislation enacted with a definite purpose for the benefit of both the assessee and the department whereby the legislature has provided a mechanism under which pending income tax litigation is sought to be reduced as also ensuring that the revenue is generated in a timely manner for the Government. The DTVSV Act, in a sense, provides for a deviation from the strict application of tax laws towards achieving this purpose. If the provision in Section 2(j) and the Board Circular is to be construed in a restrictive manner, the same will run contrary to the scheme of the DTVSV Act.
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Background
The petitioner/assessee has challenged the order, passed by Income Tax Department, dismissing the revised application filed by the petitioner on the internet portal of the department seeking to avail the benefit of Direct Tax Vivad Se Vishwas Act, 2020 for the Assessment Year 2009-10.
The petitioner-assessee preferred a review petition. The review petition was filed on 18.11.2019, which was dismissed in limine on 04.02.2020 i.e. after the specified date, which is 31.01.2020. 5. The DTVSV Act was notified by the Government of India on 18.03.2020.
Consequently, petitioner, in order to avail the amnesty scheme of the Government of India, filed a declaration/application under the DTVSV Act on the e-portal of respondent, but his application was rejected by respondent.
The petitioner filed a revised declaration/application under the DTVSV Act on 28.01.2021, but the same was also rejected vide the impugned order stating that “no appeal of the Department was pending in the Hon’ble Supreme Court on the specified date. It was decided much before that date. The review petition is not liable to be treated as an appeal under DTVSV Act. Moreover, the review petition was filed by the assessee and not the Department as claimed.
Arguments
The assessee contended that department has failed to appreciate not only the legislative intent and purpose of DTVSV Act but also the scope and ambit of a review petition being an extension of the appeal. The review is statutorily different from an appeal and the jurisdiction of the Court includes the power to modify, review or recall its own order. An Order-in-Appeal or in the SLP does not attain finality if the review petition is pending. An Order-in-Appeal can always be reviewed and a different conclusion reached on the basis of the review.
The department contended that the petitioner was within his right to file a review against the order passed in the SLP, if the grounds mentioned under Order XLVII Rule 1 CPC are satisfied.
The assessee contended as per the principles of purposive construction and the object of DTVSV Act, review petition should also be included within the definition of a pending appeal and under the definition of “appellant” under Section 2(1)(a)(i) and the petitioner should be held eligible to apply and avail benefits under the DTVSV Act. It has also been submitted that DTVSV Act came into force on 18.03.2020, while the review petition was filed on 18.11.2019 by the petitioner, and therefore, the present review application cannot, in any manner, be taken to be a colourable device on the part of the petitioner to avail the benefit of the scheme.
The assessee stated that the review petition filed by the petitioner was bona fide and was pending as on 31.01.2020 i.e. the specified date under the DTVSV Act. The review petition being an extension of the appeal, the order cannot be sustained.
The department argued that no Appeal, Writ Petition or Special Leave Petition was pending as on the specified date i.e. on 31.01.2020 as the SLP had already been disposed of on 05.03.2019. Hence, upon a literal interpretation of Section 2(1)(a) and Section 2(1)(j), the petitioner is not an appellant under the DTVSV Act and therefore not eligible for seeking the benefit of the same. It is also submitted that a review petition is not an appeal, inasmuch as, the scope of review is different from that of an appeal. It is thus argued that the writ petition is devoid of merits and is liable to be dismissed.
Conclusion
The court held that the department itself has mellowed down the strict interpretation of Section 2(j) by including the pending arbitration proceedings and miscellaneous applications under the “Vivad Se Vishwas Scheme”. There is no reason why the pendency of the review petition after the dismissal of the Special Leave Petition should not get covered under “Vivad Se Vishwas Scheme”. The review petition will also partake the character of pending proceedings and therefore the petitioner should not have been non-suited or treated as ineligible for claiming benefit under DTVSV Act.
The court allowed the writ petition and directed the departmnet to accept the revised declaration form filed by the petitioner on 28.01.2021 and process the same in accordance with DTVSV Act, 2020 and pass requisite orders.
Read More: ITAT Quashes Revision Order Passed By PCIT Without Citing That Prior Approval U/S 153D Was Erroneous
Case Details
Case Title: NRA Iron And Steel Pvt Ltd Versus Income Tax Dept.
Case No.: W.P.(C) 3537/2021
Date: 22/11/2024
Counsel For Petitioner: Akhil Sibal
Counsel For Respondent: Indruj Singh Rai
