Facts of the Case

The petitioner, NRA Iron and Steel Pvt. Ltd., challenged the order dated 28.01.2021 whereby its revised declaration filed under the Direct Tax Vivad Se Vishwas Act, 2020 for Assessment Year 2009–10 was rejected. The petitioner had succeeded before the CIT(A), ITAT, and the Delhi High Court. However, the Revenue succeeded before the Supreme Court by order dated 05.03.2019. The petitioner’s application for recall was rejected on 25.10.2019, and thereafter a review petition was filed on 18.11.2019, which was dismissed on 04.02.2020.

The DTVSV Act was notified on 18.03.2020. The petitioner filed a declaration on 26.12.2020 and a revised declaration on 28.01.2021 seeking benefit of the scheme, contending that the review petition was pending as on the specified date i.e., 31.01.2020. The declaration was rejected on the ground that no appeal was pending and that a review petition could not be treated as an appeal under the Act.

Issues Involved

Whether a review petition pending as on the specified date qualifies as “pending proceedings” under Section 2(1)(j) of the DTVSV Act, 2020, and whether rejection of the declaration on a narrow and literal interpretation was legally sustainable.

Petitioner’s Arguments

The petitioner contended that a review petition is an extension of appellate proceedings and an order does not attain finality so long as a review is pending. It was argued that the object of the DTVSV Act is to reduce litigation and that a purposive interpretation must be adopted. The petitioner relied upon CBDT clarifications recognizing pendency of miscellaneous applications and arbitration proceedings as qualifying proceedings under the scheme.

Respondent’s Arguments

The Revenue argued that no appeal, writ petition, or special leave petition was pending as on the specified date, since the SLP had already been disposed of on 05.03.2019. It was contended that a review petition is distinct from an appeal and does not fall within the definition of “pending appeal” under the DTVSV Act.

Court Order / Findings

The Delhi High Court examined the Statement of Objects and Reasons of the DTVSV Act and held that it is a beneficial and remedial legislation intended to reduce tax litigation and unlock disputed revenue. The Court observed that CBDT circulars had already diluted strict interpretation by including arbitration proceedings and miscellaneous applications within the ambit of the scheme.

The Court held that so long as the review petition was pending on the cut-off date, the order of the Supreme Court had not attained finality. A review petition partakes the character of pending proceedings and must be treated as covered under the definition of “disputed tax” under Section 2(1)(j). The restrictive interpretation adopted by the Revenue was held to be contrary to the intent and purpose of the legislation.

Important Clarification

The Court clarified that eligibility under the DTVSV Act must be tested with reference to the status of proceedings as on the specified date. Subsequent dismissal of the review petition is irrelevant for determining eligibility under the scheme.

Final Outcome

The writ petition was allowed. The Delhi High Court set aside the impugned rejection order dated 28.01.2021 and directed the Revenue to accept the revised declaration filed by the petitioner under the DTVSV Act, 2020 and process the same in accordance with law. Pending applications were disposed of accordingly.

Link to download the order - https://www.mytaxexpert.co.in/uploads/1769850821_NRAIRONANDSTEELPVTLTDVsINCOMETAXDEPARTMENTORS..pdf

Disclaimer

This content is shared strictly for general information and knowledge purposes only. Readers should independently verify the information from reliable sources. It is not intended to provide legal, professional, or advisory guidance. The author and the organisation disclaim all liability arising from the use of this content. The material has been prepared with the assistance of AI tools.