21 Sep 2121

Appeal would be pending as soon as it is filed and up until such time it is adjudicated upon and a decision is taken qua the same - Bombay High Court

Case : Stride Multitrade Pvt. Ltd. v. Assistant Commissioner of Income Tax and Ors. Writ Petition No(L). 12932 of 2021

Court : Bombay High Court

Bench : Justice K. R.Shriram and Justice M. S. Karnik

Decided on : 21 Sep 2121

Relevant Statutes

Section 2(1)(a)(i) of Direct Tax Vivad Se Vishwas Act, 2020

Section 144 and Section 246A of Income Tax Act, 1961

Brief Facts and Procedural History

1. The Petitioner is impugning the order of rejecting dated February 26, 2021, passed by respondent No.2 rejecting petitioner’s Application/ declaration/ undertaking filed under the provisions of Direct Tax Vivad Se Vishwas Act,2020.

2. The Petitioner had filed its original return of income tax for Assessment Year 2017-18 on October 30, 2017, declaring total income at the loss of Rs. 23,92,61,385/-.

3. Petitioner’s case was selected for scrutiny and respondent no.1 passed an assessment order dated 19 December 2019 under Section 144 of the Income Tax Act,1961. Aggrieved by this assessment order, the petitioner filed an appeal before respondent no.3 under Section 246A of the Income Tax Act,1961 on 6th February 2020.

4. On January 20, 2021, the petitioner received a communication from the commissioner of Income Tax (Appeal), National Faceless Appeal Centre enquiring with the petitioner whether they would wish to opt for Vivad Se Vishwas Scheme 2020 or they would like to contest the Appeal.

The Issues of the Case

Whether there is a Condonation of delay in filing the Appeal?

Whether the Application filed for Condonation of delay in filing the Appeal is time Barred?

The Observations of the Court

1. The Honourable High Court of Bombay observed that since this communication has come from the Commissioner of Income Tax (Appeals) and the Commissioner of Income Tax (Appeals) is asking the Petitioner to furnish ground-wise written submission on grounds of appeal, it would mean that condonation of delay application has been allowed by Commissioner of Income Tax (Appeals). Therefore, the application/ declaration of the petitioner under the Direct Tax Vivad se Vishwas Act, 2020 is rejected, is incorrect.

2. The Honourable High Court of Bombay opined that the respondent could not have wrongly equated admission of the appeal with pendency. The Honourable High Court of Bombay held that the appeal would be pending as soon as it is filed and up until such time it is adjudicated upon and a decision is taken qua the same.

3. The Honourable High Court of Bombay agrees with the view expressed by the Division Bench of Delhi High Court in the case of Shyam Sunder Sethi V. PR. Commissioner of Income Tax-10 and Ors. in Writ Petition (C) 2291/2021 and CM APPL., 6677/2021 dated 3rd March, 2021 wherein it is held that an appeal would be “pending” in the context of Section 2(1)(a) of the Direct Tax Vivad Se Vishwas Act, 2020 when it is first filed till its disposal and the Direct Tax Vivad Se Vishwas Act, 2020 does not stipulate that the appeal should be admitted before the specified date, it only adverts to its pendency.

The Decision Held by the Court

1. The Honourable High Court of Bombay is of the view that the order of rejection dated 26th February 2021 is bad in law and is accordingly set aside.

2. The Honourable High Court of Bombay directed Respondent No. 2 to process the forms filed by the petitioner under the provisions of Direct Tax Vivad Se Vishwas Act, 2020.

3. Writ Petition is disposed of accordingly with no order as to costs.

Click here to view/download the judgement >