Digvendra Pratap Singh Vs Union of India (Allahabad High Court)
Allahabad High Court held that delay of three days in depositing the arrears of tax under Direct Tax Vivad Se Vishwas Act, 2020 due to unforeseen and extraneous circumstances that were beyond the control of the petitioner is condonable.
Facts- By means of the present writ petition, the petitioner has challenged the order passed by respondent No.3 by which the application of the petitioner for condoning the delay of three days in depositing the balance amount payable by him under the Direct Tax Vivad Se Vishwas Act, 2020, has been rejected.
Notably, the fact of dropping of cheque in the drop box as well as the accident of the petitioner was not disputed by the respondent in the counter affidavit. Now the fact remained is whether the delay of three days in depositing the arrears of tax can be condoned, considering the fact of unforeseen circumstances which were beyond the control of the petitioner.
Conclusion- In the judgement of the Delhi High Court passed in Writ Petition (C) No. 3560 of 2022, it is held that the delay in payment of arrears of tax is attributable to unforeseen and extraneous circumstances that were beyond the control of the petitioner; therefore, same is deserved to be condoned and directed the Income Tax Department to accept the declaration of the petitioner.
Held that a delay of three days in depositing the arrears of tax of Rs. 8,67,137/- deserves to be condoned, and the amount balance tax deposited by the petitioner be accepted by the respondents treating the same well within time as per the scheme of the Direct Tax Vivad Se Vishwas Act, 2020 and also the impugned order /letter, passed by Central Board of Direct Tax, is hereby quashed.
FULL TEXT OF THE JUDGMENT/ORDER OF ALLAHABAD HIGH COURT
1. Heard Sri Anoop Trivedi, learned Senior Advocate assisted by Sri Ami Tandon and Sri Abhinav Gaur, learned counsel for the petitioner and Sri Naveen Chandra Gupta, learned counsel for the respondent Department.
2. By means of the present writ petition, the petitioner has challenged the order dated 25.8.2022 passed by respondent No.3 by which the application of the petitioner for condoning the delay of three days in depositing the balance amount payable by him under the Direct Tax Vivad Se Vishwas Act, 2020 (hereinafter referred to as “Act, 2020”), has been rejected.
3. Contention of learned counsel for the petitioner is that the Parliament enacted the Act 2020 for the resolution of disputed tax. As per the above Act, 2020, the declarant should submit his declaration u/s 4 of the Act, 2020 before the designated authority, and thereafter the designated authority, after receiving the declaration submitted by the declarant, will grant a certificate to the declarant containing particulars of the tax arrears and the amount payable after such determination. It is further contended by learned counsel for the petitioner that in pursuance of the scheme of the above Act 2020, for the resolution of the tax for the Assessment Year 2010-11, the petitioner submitted his declaration on 5.6.2020 as required u/s 4 of the Act, 2020. After submission of the aforesaid declaration certificate of designated authority in Form-III as per Section 5 of the Act, 2020 was also uploaded on the portal on 9.11.2020, which was also downloaded by the petitioner on the same day. As per this certificate, the petitioner was required to pay Rs. 18,67,137/- on or before 31.12.2020. Before the expiry of the last date, the Ministry of Finance issued a notification dated 27.10.2020, by which the last date of submission of the balance amount was extended up to 31.3.2021. Subsequently, the aforesaid notification dated 27.10.2020 was amended by the Central Government by issuing another notification extending the last date of payment of balance tax and lastly, by notification dated 25.6.2021, the last date for payment of balance tax was extended till 31.10.2021. On 31.10.2021, it was Sunday. Therefore, to deposit the balance tax as mentioned in the certificate issued by the designated authority u/s 5 of the Act, 2020, the petitioner dropped a cheque for the amount of Rs. 8,67,137/- (after adjusting Rs. 10 Lakh which was already deposited by him prior to issuance of Form – III) in the drop box of the bank on Sunday itself, but the receipt for the payment (Challan) was issued by the bank on 3.11.2021, on encashment of the above cheque.
4. It was further submitted by the counsel for the petitioner that petitioner also met with an unfortunate accident on 1.11.2021 in which serious injuries were caused in his right knee and he was advised complete bed rest for a period of three days i.e. from 1.11.2021 to 3.11.2021 and in support of his claim, the petitioner has also annexed the medical certificate issued by the doctor as Annexure-8 to the writ petition. However, despite depositing the money in the account of the Income Tax Department, he was not permitted to submit/file Form-IV so as to entirely avail the benefit of the scheme under the Act 2020 because of the delay of three days in the generation of challan by the bank. Feeling aggrieved by the above action of the Income Tax Department, the petitioner moved an application before the Chairman of the Central Board of Direct Taxes on 15.11.2021 with a prayer that appropriate order be issued for condoning the delay of three days in depositing the balance amount towards his tax liability, but the above application was rejected by the impugned order dated 25.8.2022 on the ground that once last date has been mentioned in the notification to deposit the balance tax liability; therefore, the same cannot be extended.
5. Learned counsel for the petitioner challenged the impugned order dated 25.8.2022 on the ground that there was a delay of three days in depositing the balance amount of tax, firstly for the reason that the last date for depositing the balance tax fell on Sunday. Secondly, because of the injury in his knee he could not approach the bank from 1.11.2021 to 3.11.2021. In support of his contention, learned counsel for the petitioner heavily relied upon the judgement of Delhi High Court passed in Writ Petition (C) No. 3560 of 2022 (I.A. Housing Solution Pvt. Ltd. vs. Principal Commissioner of Income Tax-4) decided on 2.11.2022 in which the present scheme issued under the Act, 2020 was under consideration regarding extension of date. While allowing this petition, the Delhi High Court condoned the delay in depositing the balance amount of tax and directed the Income Tax Department to accept the balance amount as stipulated in Form-III on the ground that unforeseen and extraneous circumstances which were beyond the control of the petitioner and resulted in delayed depositing the balance tax can be condoned considering the lockdown period on account of COVID-19 from 25.3.2020.
6. Learned counsel for the petitioner further relied upon the judgement of Apex Court in the case of Shekhar Resorts Ltd. vs. Union of India and others, reported in (2023) 3 SCC 220. In the above judgement, Hon’ble Apex Court, after condoning the delay, permitted the petitioner to deposit the balance outstanding on the ground that the petitioner had already submitted his declaration but he could not make the payment due to legal impediment, therefore, condoning the said delay in depositing the balance amount is not the extension of the scheme, but it is taking a remedial measure.
7. Per contra, learned counsel for the Income Tax Department had submitted that after getting the declaration of the petitioner, certificate u/s 5 of the Act 2020 in Form-III was issued to the petitioner on 9.11.2020, but the petitioner by skipping the dates for depositing balance outstanding, kept on waiting for the extension of date and even could not deposit the balance outstanding of tax till last extended date. In support of his contention, learned counsel heavily relied upon the judgement of Apex Court in SLP (C) No. 2116 of 2023 (M/s Ken Computek Pvt. Ltd. vs. Designated Committee (SVLDRS) and others) decided on 6.2.2023 in which the Apex Court observed that the last date to deposit the balance of tax, prescribed under the scheme under the Act, 2020, cannot be extended and confirmed the impugned judgement of the High Court and dismissed the writ petition of the petitioner on the ground that last date prescribed under SVLDR Scheme cannot be extended.
8. In reply to the averments of learned Standing Counsel, learned counsel for the petitioner has submitted that judgement relied upon by learned Standing Counsel deserves to be ignored being sub silentio as no finding was recorded in the aforesaid judgement regarding the issue involved in the present petition. In support of his contention, learned counsel for the petitioner has relied upon the judgement of Municipal Corporation of Delhi vs. Gurnam Kaur reported in (1989) 1 SCC 101, Arnit Das vs. State of Bihar, reported in (2000) 5 SCC 488 as well as the judgement of Tungabhadra Industries Ltd. vs. Union of India and others, reported in (2000) 5 SCC 501. In the above-cited judgements by learned counsel for the petitioner, the Apex Court observed that when a particular point is not consistently determined by the court, that does not form part of the ratio decidendi and is not binding.
9. From the pleadings of the parties and after perusal of the record, it appears that the Ministry of Finance, Government of India, has issued the “Vivad se Vishvash” Scheme in pursuance of the Act 2020. In section 2(l), the last date means such date as may be notified by the Central Government in the official gazette. As per Section 3 of the Act 2020, if the declarant for resolution, for resolution of disputed tax, files a declaration to designated authority in accordance with the provision of Section 4 in respect of tax arrears as mentioned in the chart before the last date, then the designated authority within 15 days from the date of receipt of declaration will determine the amount payable by the declarant and grant certificate to the declarant containing particulars of tax arrears and the amount payable after such declaration as per Form-III then the declarant shall pay the amount determined within 15 days from the date of receipt of certificate. Paragraph Nos. 3 and 5 of the Act 2020 are quoted as below:-
“3. Subject to the provisions of this Act, where a declarant files under the provisions of this Act on or before such date as may be notified, a declaration to the designated authority in accordance with the provisions of section 4 in respect of tax arrear, then, notwithstanding anything contained in the Income-tax Act or any other law for the time being in force, the amount payable by the declarant under this Act shall be as under, namely:—
