Vivad se Vishwas Scheme – Declaration – Condition precedent – Appeal should be pending on specified date – Application for condonation of delay in filing appeal filed before specified date and pending before Commissioner (Appeals) – Communication from Commissioner (Appeals) of NFAC asking assessee to furnish ground-wise submissions in appeal – Implies delay condoned – Order of rejection set aside

Vivad se Vishwas Scheme – Declaration – Condition precedent – Appeal should be pending on specified date – Application for condonation of delay in filing appeal filed before specified date and pending before Commissioner (Appeals) – Communication from Commissioner (Appeals) of NFAC asking assessee to furnish ground-wise submissions in appeal – Implies delay condoned – Order of rejection set aside

For the A.Y. 2017-18, the assessee declared loss in its return of income. An assessment order was passed u/s. 144. The assessee filed an appeal u/s 246A before the Commissioner (Appeals) with an application for condonation of delay of 19 days in filing the appeal. Thereafter, the assessee received a communication from the Commissioner (Appeals) of the National Faceless Appeal Centre inquiring whether the assessee wished to opt for the Vivad se Vishwas Scheme or would contest the appeal. The assessee admittedly made its declaration in form 1 on 21st January, 2021, within the specified date of 31st January, 2020 u/s 2(1)(a)(n) of the 2020 Act. The Principal Commissioner rejected the declaration of the assessee under the 2020 Act on the ground that there was no order condoning the delay in filing the appeal before the Commissioner (Appeals).

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

‘i) Section 2(1)(a)(i) of the Direct Tax Vivad se Vishwas Act, 2020 provides that a person in whose case an appeal or a writ petition or special leave petition has been filed either by himself or by Income-tax authority or by both, before an appellate forum and such appeal or petition is pending as on the specified date is entitled to make a declaration under the Act. The specified date u/s 2(1)(a)(n) of the 2020 Act is 31st January, 2020. Where the time limit for filing of appeal has expired
before 31st January, 2020 but an appeal with an application for condonation of delay is filed before the date of the Circular, i.e., 4th December 2020 [2020] 429 ITR (St.) 1, issued by the Central Board of Direct Taxes such appeal will be deemed to be pending as on 31st January, 2020.

ii) The communication dated 20th January, 2021 from the Commissioner (Appeals) asking the assessee to furnish ground-wise written submissions on the grounds of appeal itself would mean that the delay had been condoned by the Commissioner (Appeals). Therefore, it was incorrect for the Principal Commissioner to state that there was no order condoning the delay and hence, reject the declaration of the assessee under the 2020 Act.

iii) The time limit to file appeal had expired on 18th January, 2020 and the condonation of delay application was filed on 6th February, 2020, before 4th December, 2020, the date of the Board’s Circular. The appeal would be pending as required under the 2020 Act. The order of rejection of the assessee’s declaration under the 2020 Act was bad in law and accordingly set aside. The Principal Commissioner was directed to process the forms filed by the assessee under the provisions of the 2020 Act.’