Direct Tax Vivad se Vishwas Act, 2020 – Condition precedent for making declaration – Application should be pending on 31st January, 2020 from order dismissed ‘in limine’ – Appeal to Appellate Tribunal – Appeal dismissed based on mistake on 22nd June, 2018 – Tribunal rectifying order and passing fresh order restoring appeal on 11th May, 2020 – Order passed by Tribunal on 22nd June, 2018 was ‘in limine’ – Appeal pending on 31st January, 2020

Direct Tax Vivad se Vishwas Act, 2020 – Condition precedent for making declaration – Application should be pending on 31st January, 2020 from order dismissed ‘in limine’ – Appeal to Appellate Tribunal – Appeal dismissed based on mistake on 22nd June, 2018 – Tribunal rectifying order and passing fresh order restoring appeal on 11th May, 2020 – Order passed by Tribunal on 22nd June, 2018 was ‘in limine’ – Appeal pending on 31st January, 2020

For the A.Y. 2011-12, the A.O. passed the assessment order on 21st March, 2014 increasing the taxable income considerably. The assessee preferred an appeal before the Commissioner (Appeals), which was allowed on 29th January, 2016. The Revenue filed an appeal on 10th March, 2016 before the Tribunal. The appeal was, however, dismissed by the Tribunal on 22nd June, 2018, based on a mistaken belief that in the earlier assessment years it had taken a view against the Revenue and in the favour of the assessee. This obvious mistake, once brought to the notice of the Tribunal, via a miscellaneous application preferred by the Revenue, was rectified by an order dated 11th May, 2020. The miscellaneous application was filed before the specified date, i.e., 31st January, 2020. As per the information available on the Tribunal’s portal, the miscellaneous application was filed on 13th November, 2018. The Tribunal, realising the mistake that had been made, recalled its order dated 22nd June, 2018 and restored the Revenue’s appeal and directed that the appeal be heard afresh. As a matter of fact, the Tribunal fixed the date of hearing, via the very same order, in the appeal on 6th July, 2020. The assessee filed Forms 1 and 2 with the designated authority under the Direct Tax Vivad se Vishwas Act, 2020 in the first instance on 21st March, 2020. The assessee filed revised Forms 1 and 2, on 27th January, 2021, and thereafter on 20th March, 2021. In the interregnum, both sets of Forms 1 and 2, which were filed on 21st March, 2020 and 27th January, 2021, were rejected.

The Delhi High Court allowed the writ petition filed by the assessee and held as under:

‘i) A careful perusal of the order dated 22nd June, 2018 would show that the Revenue’s appeal was dismissed at the threshold, based on a mistaken impression that the Tribunal had taken a view against the Revenue. Circular No. 21 of 2020 [(2020) 429 ITR (St.) 1] requires fulfilment of two prerequisites for an appeal to be construed as pending on the specified date (i.e., 31st January, 2020) in terms of the provisions of the 2020 Act. First, the miscellaneous application should be pending on the specified date, i.e., 31st January, 2020. Second, the miscellaneous application should relate to an appeal which had been dismissed “in limine” before 31st January, 2020.

ii) There was no dispute that the miscellaneous application was filed and was pending on the specified date, i. e., 31st January, 2020. As regards the second aspect, the order of the Tribunal dated 22nd June, 2-018 could only be construed as an order that dismissed the Revenue’s appeal “in limine”. The Revenue’s appeal was pending on the specified, date, i. e., 31st January, 2020. The order of rejection was not valid.’