ALTEK BEISSEL NEEDLES LIMITED,KANCHEEPURAM vs. ACIT, CHENNAI

We have heard the counsels for the assessees and the ld. DR and also perused the material available on record. At the time of hearing, learned counsels for the assessees have made a statement at bar that the assessees wants to utilize the Direct Taxes ‘Vivad se Vishwas Scheme, 2020’ to settle pending dispute relating to Direct Taxes and in this regard some of assessees have filed form No 1 and 2 and awaiting form no. 3 from the designated authority. In some cases, the assessees have received form no. 3 from the designated authority and in some cases, the assessee have filed letter and expressed their willingness to file form no. 1 and 2 before the designated authority.

The Bench has considered rival contentions of both sides and after hearing both parties, we found that the Government of India has announced in the Budget, 2020, a Direct Taxes ‘Vivad se 1165/Chny/2018 (VSVS) Vishwas Scheme, 2020’ to settle pending dispute relating to Direct Taxes at various appellate forums including the First Appellate Authority, Tribunal, High Court and Supreme Court. In this regard, the Scheme has been notified on 17th March, 2020 and became Direct Taxes ‘Vivad se Vishwas Act, 2020’. As per the said Scheme, assessees are allowed to settle direct tax dispute in a manner and procedure prescribed therein by filing necessary declaration and undertaking. The Scheme has also specified the amount of taxes, interest, and penalty, if any, payable under the Act. If an assessee filed a declaration and pay specified taxes as per the scheme and withdraw the appeal pending before the appellate authorities, the Designated Authority shall pass an order in Form 5 confirming payment made under the scheme and grant immunity from penalty and prosecution.

In these present appeals, some assessees have filed declaration in Form No.1 along with undertaking waiving rights for any remedy in Form No. 2 to the designated Authority and has also received Form 3. In some cases, form no 1 and 2 has been filed and awaiting form no. 3 from the designated authority and in some cases, the assessees have expressed their willingness to file form no. 1 and 2 and settle their dispute under the scheme. Therefore, 1165/Chny/2018 (VSVS) once the assessees intend to file a declaration in Form No.1 along with undertaking and expressed their willingness to settle pending disputes regarding direct taxes, then there is no point in keeping appeal filed by the assessees. We, further noted that recently the Hon’ble Jurisdictional High Court of Madras has considered an identical application filed by an assessee in the case of M/s. Nannusamy Mohan (HUF) Vs. ACIT in T.C.A No.372 of 2020 for availing the benefit of ‘Vivad se Vishwas Scheme, 2020’, where the Hon’ble High Court has dismissed the appeal filed by the petitioner as withdrawn, but allowed liberty to the assessee to restore the appeal in the event the designated authority for any reason reject application filed by the assessee under section 4 of the Act. The relevant portions of the observations of the Hon’ble High Court of Madras vide order dated 16.10.2020 are extracted as under:- “2. We have heard Mr.M.P.Senthil Kumar, learned counsel appearing for the appellant/assessee and Mr.T.R.Senthil Kumar, learned Senior Standing Counsel and Ms. K.G.Usha Rani, learned counsel for the respondent/Revenue. 3. 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. 4. 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.

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 some assessees have already filed declaration in Form No.1 along with Form No.2 to the Designated Authority and received Form 3 and some assessees had already filed form no 1 & 2 and awaiting form no. 3 from the designated authority and also the fact that remaining assessees are willing to file form no 1 and 2 within the due date prescribed for this 1165/Chny/2018 (VSVS) purpose, we dismiss the appeals filed by the assessees as withdrawn. However, a liberty is given to the assessees to restore the appeals, in the event of the Designated Authority, for any reason reject the application filed by the assessees under section 4 of the said Act.

In the result, both the appeals filed by the assessees are dismissed as withdrawn.