Case Law Details
Kapri International Pvt. Ltd. Vs Commissioner Of Income Tax (Delhi High Court)
HC held that Reliance by the CIT on FAQ-13 is not tenable since as rightly argued by the learned counsel for the petitioner FAQ-13 relates to a pending waiver application before the department and not a proceeding emanating out of a decision by the department on a waiver application, which Co. Appl. 577/2019 was. This is also obvious since if the department itself is seized of a demand by the assessee and has not passed a decision on it, then there is no „dispute‟ as yet which has fructified. It may be noted that the definition of „dispute‟ under the VSV Act / Rules is in the nature of adjudicating proceedings arising out of departmental decisions but not a proceeding pending before the department. In essence, any proceeding challenging a decision by the department in respect of tax, interest, penalty, fee etc. would come within the purview of a „dispute‟ which would enable a party to approach the department for a resolution under the VSV Act. It may be useful to refer to a decision by the Hon‟ble High Court of Bombay in Sadruddin Tejani v. ITO & Anr. (2021) SCC Online Bombay 567; (2021) 434 ITR 474 wherein it was held that “the VSV Act is a beneficial legislation for both the Revenue and the tax payer”.
Fifthly, even this Court in Shyam Sunder Sethi v. Pr. Commissioner of Income Tax-10 and Others 2021 SCC OnLine Del 3113 has set aside a similar order of rejection based upon an FAQ under the VSV Act, as bad in law.
Accordingly, attempt by the CIT to exclude a genuine disputant of tax liability, like the petitioner, from the possibility of settlement under the VSV Act is extremely hyper-technical. The interest as demanded under Section 220 (2A) which is 1% for every month of the period of delay as opposed to an application of Rule 154 of the Companies Court Rules which provides for an interest ceiling at the rate of 4% interest for companies in liquidation, is a huge statutory benefit given to companies in liquidation. It cannot be contended that the respondent CIT is not qualified to account for the beneficial provisions for a company in liquidation.
In any event, that is not the ground of rejection of petitioner’s declaration under the Act. The ground of rejection as stated that the company application filed by the petitioner in this Court was not an „appeal’ and therefore not within the scope of the VSV Act, which in light of above analysis cannot be accepted.
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