ITO WARD 3(3), TRICHY vs. AMMAN TRY TRADING COMPANY, TRICHY

This appeal filed by the Revenue is directed against order of learned Commissioner of Income Tax (Appeals)-1, Trichy, dated 25.02.2019 for assessment year 2011-12.

We have heard the counsel for the assessee and the ld. DR and also perused the material available on record. At the time of (VSVS) hearing, learned counsel for the assessee have made a statement at bar that the assessee wants to utilize the Direct Taxes ‘Vivad se Vishwas Scheme, 2020’ to settle pending dispute relating to Direct Taxes and in this regard assessee has filed form No 1 and 2 and received form no. 3 from the designated authority.

The learned counsel for the appellant / assessee, on instructions, submitted that the appellant / assessee intends to avail the benefit of Vivad Se Vishwas Scheme (‘ VVS Scheme' for brevity) and in this regard, the assessee is taking steps to file the application / declaration in Form No. 1.

It may not be necessary for this Court to decide the Substantial Questions of Law framed for consideration on account of certain subsequent developments. The Government of India enacted the Direct Tax Vivad Se Vishwas Act, 2020 (Act 3 of 2020) to provide for resolution of disputed tax and for matters connected therewith or incidental thereto. The Act of the Parliament received the assent of the President on 17th March 2020 and published in the Gazette of India on 17th March 2020.

The First Proviso to Section 3 states that in case where an Appeal or Writ Petition or Special Leave Petition is filed by the Income Tax authority on any issue before the Appellate Forum, the amount payable shall be one-half of the amount in the table stipulated in Section 3 calculated on such issue, in such a manner as may be prescribed. The second proviso deals with the cases, where the matter is before the Commissioner (Appeals) or before the Dispute Resolution Panel. The third proviso deals with cases, where the issue is pending before the Income Tax Appellate Tribunal. The filing of the declaration is as per Section 4 of the Act and the particulars to be furnished are also mentioned in the Sub Sections of Section 4. Section 5 of the Act deals with the time and manner of the payment and Section 6 deals with Immunity from initiation of proceedings in respect of offence and imposition of penalty in certain cases. Section 9 of the Act deals with cases, where the Act 3 of 2020 will not be applicable.

As observed, the assessee is given liberty to restore this appeal in the event the ultimate decision to be taken on the declaration to be filed by the assessee under Section 4 of the said Act is not in favour of the assessee. If such a prayer is made, the Registry shall entertain the prayer without insisting upon any application to be filed for condonation of delay in restoration of the appeal and on such request made by the assessee by filing a Miscellaneous Petition for Restoration, the Registry shall place such petition before the Division Bench for orders.

In the light of the above, We direct the appellant / assessee to file the Form No.1 on or before 20.11.2020 and the competent authority shall process the application / declaration in accordance with the Act and pass appropriate orders as expeditiously as possible preferably within a period of six (6) weeks from the date on which the declaration is filed in the proper form.”

In the light of the above decision of the Hon’ble High Court of Madras, and by taking note of the fact that assessee has already filed declaration in Form No.1 along with Form No.2 to the Designated Authority and received Form 3, we dismiss the appeal filed by the assessee as withdrawn. However, a liberty is given to the assessee to restore the appeal, in the event of the Designated Authority, for any reason reject the application filed by the assessee under section 4 of the said Act. We, further make it clear that in a case where the appeal is filed by the Revenue and the assessee has for any reason opted out from the scheme or the applicants under the scheme misrepresents any facts which resulted in rejection of application filed under the scheme, then the provisions of section 4(6) of the Act, shall be applicable to the appeal and in such cases, all the proceedings and claims which were withdrawn under section 4 and all the consequences under the Income-tax Act against the declarant shall be deemed to have been revived. We, further make it clear that the assessee should promptly inform the Assessing Officer about their decision to opt out of the scheme or rejection of application by the designated authority to the Assessing Officer, so as to enable to file miscellaneous application to restore the appeal.