CASE TITLE: Digvendra Pratap Singh vs. Union Of India And 2 Others [Writ Tax No. – 1510 of 2022]
DECIDED ON: 11.08.2023
CORAM: Hon’ble Siddhartha Varma,J. Hon’ble Arun Kumar Singh Deshwal,J.
Last Friday, the Allahabad High Court granted permission to the petitioner to avail benefits under the Direct Tax Vivad Se Vishwas Act, 2020, even though their application under the Act was submitted three days after the stipulated period. The Court clarified that granting a condonation of delay in exceptional situations does not automatically extend the scope of the scheme.
The Parliament introduced the Direct Tax Vivad Se Vishwas Act, 2020 (referred to as the 2020 Act) with the aim of resolving disputes related to taxes, providing taxpayers relief from interest and penalties on outstanding taxes. As per the provisions of the 2020 Act, individuals wishing to settle contested tax amounts are required to submit a declaration under section 4 of the Act to the designated authority. Upon receipt of this declaration, the Authority is responsible for issuing a certificate to the declarant containing details of the tax arrears and the payable amount. Subsequently, the payment must be made by the deadline determined by the Ministry of Finance.
For the Assessment Year 2010-11, the petitioner fulfilled the requirement by submitting their declaration on 5.6.2020 as mandated under Section 4 of the 2020 Act. The declaration certificate issued by the designated authority in Form-III, as outlined in Section 5 of the Act, was also uploaded on the portal by 9.11.2020. The petitioner was obligated to make a payment of Rs. 18,67,137/- on or before 31.12.2020.
The Ministry of Finance extended the deadline for payment under the scheme through various notifications. On the final deadline, which coincided with a Sunday, the petitioner delivered a check. However, due to the day being a Sunday, the payment receipt was issued on 3.11.2021. Subsequently, the petitioner was disqualified from availing benefits under the 2020 Act due to the three-day delay.
The Chairman of the Central Board of Direct Taxes declined the petitioner’s request for condonation of the delay, citing the notification that established the last deposit date as 31.10.2021, with no room for further extension.
The petitioner’s representative argued that unforeseen and external circumstances, along with legal hindrances, should be considered when granting an extension for depositing the remaining amounts. Reference was made to the case of Shekhar Resorts Ltd. vs. Union of India and others, where the Supreme Court held that condoning a delay in the presence of a legal obstacle does not constitute an extension of the scheme but rather a remedial measure.
The respondent’s counsel, however, relied on the case of M/s Ken Computek Pvt. Ltd. vs. Designated Committee (SVLDRS) and others, wherein the Supreme Court observed that the prescribed deadline for depositing the balance of tax under the 2020 Act scheme cannot be prolonged.Top of Form
CASE ANALYSIS AND DECISION
The bench, consisting of Justices Siddhartha Verma and Arun Kumar Singh Deshwal, noted that in a similar factual scenario, the Supreme Court in the case of Shekhar Resorts Ltd. vs. Union of India and others, as well as the Delhi High Court in I.A. Housing Solution Pvt. Ltd. vs. Principal Commissioner of Income Tax-4, had granted the petitioner the benefit of the scheme. Consequently, the petitioner was entitled to the benefit, as they had demonstrated good faith by submitting the check on the final day. The incident that caused the delay was an unforeseen event beyond the petitioner’s control.
In regard to the decision referenced by the Respondent, the Court held:
“While in the judgment of M/s Ken Computek Pvt. Ltd. vs. Designated Committee (SVLDRS) and others, delivered in SLP (C) No. 2116 of 2023, the Supreme Court did not address the issue of condoning delay in exceptional circumstances, it only observed that the benefits of the scheme cannot be extended beyond the timeline prescribed by the scheme.”
In line with this, the writ petition was granted and accepted.
approving bail, leading to the dismissal of the defendant’s bail plea.
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Written by- Mansi Malpani