Case Law Details
PT Bukaka Teknik Utama Vs CIT (IT) (Delhi High Court)
Conclusion: Assessee can’t be obstructed from availing of the benefits of the Direct Tax Vivad se Vishwas Act, 2020 (DTVSV Act) even where the time limit for an appeal had not expired as DTVSV Act aspired to finally free the tax arrears locked in the litigation combat for ages and ultimately ensures timely collection of tax. Moreover, since the assessee aspired to avail the benefits of the settlement scheme and had the beneficial legislation in place to finally effectuate such aspirations. Therefore, under the facts of the present case, there was no reason to obstruct the assessee from availing the benefits of the DTVSV Act.
Held: Assessee was an Indonesian-based entity, and for the assessment year 2010–11, it filed its income tax return, declaring a total income of Rs. 6,27,250. Assessee’s case was picked up for scrutiny, and notice under Section 143(2) of the Income Tax Act, 1961, was issued. A draft assessment order was passed under Section 144C(1), by which AO proposed to assess the income of the assessee. The final assessment order was passed, and the income of assessee was assessed at Rs. 1,69,68,210/-. Assessee preferred an appeal before the CIT (A), which came to be dismissed on the grounds of a four-year delay. This order of CIT (A), however, was under challenge before the ITAT. DTVSV Act came into force, and assessee filed Forms 1 and 2 as per the provisions of the DTVSV Act. The application was rejected by the department on the pretext that, as of the specified date, no appeal was pending; hence, assessee was ineligible to reap the benefits under the DTVSV Act. Assessee contended that the action of the department was wholly arbitrary and completely outside the beneficial objectives of the DTVSV Act. As per the provisions of Section 2(1)(a)(ii) read with Section 2(1)(n) of the DTVSV Act, an assessee in whose case an order had been passed by CIT(A) and the limitation for filing an appeal against the order had not expired as on the specified date, such cases were covered within the meaning of “appellant.” As of January 31, 2020, the time limit for filing the appeal before the ITAT had not expired as per Section 253 and also as per the provisions of the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020, as the time limit for filing the appeal was extended up to March 31, 2021 in view of the COVID-19 pandemic. Department contended that, as per the provisions of the DTVSV Act, in order to avail the benefit of the “Vivaad se Vishwas” scheme, the appeal had to remain pending as of the specified date, i.e., January 31, 2020. However, no appeal was pending in the assessee’s case as the CIT (A) disposed of the condonation of delay application on January 1, 2020. The court held that it could not be said that once the CIT (A) had rejected the appeal of assessee on the ground of being barred by limitation, the resultant effect of such an order would be confirmation of the assessment order so passed, unless and until such position was changed by the appellate forum. Therefore, upon a conjoint reading of Section 2(1)(a)(ii) and Section 2(1)(j)(B) of the DTVSV Act and applying the provisions in the facts of the present case, particularly in light of the objectives of the DTVSV Act, it was distinct to point out that the time limit for filing the appeal against the CIT(A) order dated 01.01.2020 was not expired as on the specified date and the disputed tax arrears existed on the specified date as a resultant effect of the CIT(A) order dated 01.01.2020 lead to confirmation of the assessment order by resulting in the disputed tax arrears.
FULL TEXT OF THE JUDGMENT/ORDER OF DELHI HIGH COURT
1. This petition, at the instance of the assessee, raises a singular issue i.e., whether the assessee would be eligible to avail the benefits of settlement under the provisions of Direct Tax Vivad se Vishwas Act, 2020 [„DTVSV Act‟], particularly when the assessee’s appeal before Commissioner of Income Tax (Appeals) [„CIT(A)‘] was dismissed on the ground of delay and admittedly when the limitation to file an appeal before Income Tax Appellate Tribunal [‘ITAT‘] had not expired on the specified date i.e, 31.01.2020 as provided under the DTVSV Act.
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