My Tribunal appeal was more than a year late and the delay was condoned only in February 2021, well after CBDT's 4 December 2020 circular. The designated authority says FAQ 59 therefore cannot help me. Is that right?
No. The Telangana High Court held that the 'deemed pendency' benefit in the answer to FAQ 59 cannot be confined to condonation applications filed on or before 4 December 2020; what matters is that the appeal was pending with a condonation application and had been admitted before the declaration was filed. Confining the benefit to that date would create a class of declarants without any reasonable basis and offend Article 14, and it would cut across the Board's own powers under sections 10 and 11 of the 2020 Act.
Decided by the High Court (M.S. Ramachandra Rao J and T. Vinod Kumar J (judgment per T. Vinod Kumar J)) on 2021-06-28, reported as Direct Tax Vivad se Vishwas Act, 2020; Writ Petition No.12038 of 2021 (High Court for the State of Telangana). It bears on section DTVSV 2020 of the Income Tax Act 1961, in Appeals and How Tax Law Is Read matters.
This carries the condonation point one step past Shyam Sunder Sethi. Sethi struck at the admission requirement; Boddu Ramesh strikes at the 4 December 2020 cut-off inside the same FAQ answer, and it does so with a second, independent limb — that condonation relates back, so that once the Tribunal condoned the delay the appeal must be treated as having been filed in time and therefore as pending on the specified date. The case is also the practical authority on a rejected declaration: the designated authority told the assessee there was no mechanism to withdraw or rectify a rejection order and advised him to file afresh, he did so, the fresh declaration was rejected again, and the Court directed the authority to accept the revised Forms 1 and 2 and issue Form 3. If a first declaration has been rejected on an untenable ground, a second one is not barred.
Binding within that High Court's jurisdiction. Persuasive elsewhere.
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The assessment for AY 2011-12 was completed on 28 December 2018 under s.143(3) read with s.147. The assessee appealed to the CIT(A) on 19 February 2019; that appeal was dismissed on 18 September 2019. He filed a further appeal to the Tribunal only on 25 January 2021, with an application to condone the delay. The Tribunal heard the matter on 5 February 2021, condoned the delay, and by order dated 15 February 2021 allowed the appeal and restored the file to the CIT(A). Meanwhile he had filed a declaration in Form 1 on 8 February 2021, which was rejected on 31 March 2021 on the ground that no appeal was pending on 31 January 2020. Told there was no mechanism to withdraw or rectify the rejection, he filed a fresh declaration in Forms 1 and 2 on 31 March 2021, opting to settle the dispute then pending on remand before the CIT(A); that too was rejected on 22 April 2021 on the same ground. The last date for filing declarations had been extended to 31 March 2021 by Notification No.9/2021 dated 26 February 2021.
The writ petition was allowed, the rejection order of 22 April 2021 was set aside, and the designated authority was directed to accept the revised Forms 1 and 2 filed on 31 March 2021, process them, issue Form 3 and accept payment before the notified due date (para 45). The benefit of deemed pendency under the answer to FAQ 59 is not confined to condonation applications filed on or before 4 December 2020; even after that date, if an appeal is filed with a condonation application and admitted by the appellate authority before the declaration is filed, the benefit must be extended (paras 37 and 38). Independently, condonation of delay relates back, so that the appeal is treated as filed in time and therefore as pending before the appellate forum on the specified date, making the assessee an 'appellant' within s.2(1)(a)(i) and the tax assessed 'disputed tax' within s.2(1)(j)(B) (para 40).
The Court read the Statement of Objects and Reasons and the Finance Minister's Budget speech of 1 February 2020, both reproduced in full, and concluded that the Act was intended to give quietus to pending direct tax litigation and is beneficial legislation to be construed so as to achieve its object (paras 19 to 25), applying the maxim ut res magis valeat quam pereat from Mangal Sen Shyam Lal and the Constitution Bench in Tinsukhia Electric Supply (paras 26 and 27), and K.P. Varghese for the relevance of the mover's speech (para 23). It noted that the last date for declarations was successively extended, finally to 31 March 2021, whereas FAQ 59 had been drafted when the last date stood at 31 December 2020 (paras 30 to 33). It therefore refused to attach significance to the date of issue of the circular, holding that what matters is the pendency of the appeal with a condonation application and its admission before the date of the declaration (para 37), and that a contrary reading would create a separate class of declarants without reasonable basis, violating Article 14 (para 38). It added the relation-back reasoning (para 40) and, in the alternative, that the Tribunal's remand order revived and restored the CIT(A) appeal originally filed on 19 February 2019, which relates back to a date within the specified date (para 41).
Further, as noted above, the Act of 2020 is a beneficial piece of legislation and the benefit under such legislation should enure to the benefit of the assessee and cannot be denied by taking hyper-technical view.
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Handle my notice → Ask a CA on WhatsAppNo. The Telangana High Court held that the 'deemed pendency' benefit in the answer to FAQ 59 cannot be confined to condonation applications filed on or before 4 December 2020; what matters is that the appeal was pending with a condonation application and had been admitted before the declaration was filed. Confining the benefit to that date would create a class of declarants without any reasonable basis and offend Article 14, and it would cut across the Board's own powers under sections 10 and 11 of the 2020 Act. This was decided by the High Court (M.S. Ramachandra Rao J and T. Vinod Kumar J (judgment per T. Vinod Kumar J)) and bears on section DTVSV 2020 of the Income Tax Act 1961. It is reported as Direct Tax Vivad se Vishwas Act, 2020; Writ Petition No.12038 of 2021 (High Court for the State of Telangana). This carries the condonation point one step past Shyam Sunder Sethi. Sethi struck at the admission requirement; Boddu Ramesh strikes at the 4 December 2020 cut-off inside the same FAQ answer, and it does so with a second, independent limb — that condonation relates back, so that once the Tribunal condoned the delay the appeal must be treated as having been filed in time and therefore as pending on the specified date. The case is also the practical authority on a rejected declaration: the designated authority told the assessee there was no mechanism to withdraw or rectify a rejection order and advised him to file afresh, he did so, the fresh declaration was rejected again, and the Court directed the authority to accept the revised Forms 1 and 2 and issue Form 3. If a first declaration has been rejected on an untenable ground, a second one is not barred. If it applies to you, the first step is this: Show that the appeal, however late, was pending with a condonation application on the date the declaration was filed, and that the appellate authority had by then condoned the delay and taken the appeal up.
The assessment for AY 2011-12 was completed on 28 December 2018 under s.143(3) read with s.147. The assessee appealed to the CIT(A) on 19 February 2019; that appeal was dismissed on 18 September 2019. He filed a further appeal to the Tribunal only on 25 January 2021, with an application to condone the delay. The Tribunal heard the matter on 5 February 2021, condoned the delay, and by order dated 15 February 2021 allowed the appeal and restored the file to the CIT(A). Meanwhile he had filed a declaration in Form 1 on 8 February 2021, which was rejected on 31 March 2021 on the ground that no appeal was pending on 31 January 2020. Told there was no mechanism to withdraw or rectify the rejection, he filed a fresh declaration in Forms 1 and 2 on 31 March 2021, opting to settle the dispute then pending on remand before the CIT(A); that too was rejected on 22 April 2021 on the same ground. The last date for filing declarations had been extended to 31 March 2021 by Notification No.9/2021 dated 26 February 2021. The matter was decided on 2021-06-28 by the High Court (M.S. Ramachandra Rao J and T. Vinod Kumar J (judgment per T. Vinod Kumar J)). On those facts the High Court held as follows. The writ petition was allowed, the rejection order of 22 April 2021 was set aside, and the designated authority was directed to accept the revised Forms 1 and 2 filed on 31 March 2021, process them, issue Form 3 and accept payment before the notified due date (para 45). The benefit of deemed pendency under the answer to FAQ 59 is not confined to condonation applications filed on or before 4 December 2020; even after that date, if an appeal is filed with a condonation application and admitted by the appellate authority before the declaration is filed, the benefit must be extended (paras 37 and 38). Independently, condonation of delay relates back, so that the appeal is treated as filed in time and therefore as pending before the appellate forum on the specified date, making the assessee an 'appellant' within s.2(1)(a)(i) and the tax assessed 'disputed tax' within s.2(1)(j)(B) (para 40).
The Court read the Statement of Objects and Reasons and the Finance Minister's Budget speech of 1 February 2020, both reproduced in full, and concluded that the Act was intended to give quietus to pending direct tax litigation and is beneficial legislation to be construed so as to achieve its object (paras 19 to 25), applying the maxim ut res magis valeat quam pereat from Mangal Sen Shyam Lal and the Constitution Bench in Tinsukhia Electric Supply (paras 26 and 27), and K.P. Varghese for the relevance of the mover's speech (para 23). It noted that the last date for declarations was successively extended, finally to 31 March 2021, whereas FAQ 59 had been drafted when the last date stood at 31 December 2020 (paras 30 to 33). It therefore refused to attach significance to the date of issue of the circular, holding that what matters is the pendency of the appeal with a condonation application and its admission before the date of the declaration (para 37), and that a contrary reading would create a separate class of declarants without reasonable basis, violating Article 14 (para 38). It added the relation-back reasoning (para 40) and, in the alternative, that the Tribunal's remand order revived and restored the CIT(A) appeal originally filed on 19 February 2019, which relates back to a date within the specified date (para 41). In the words reproduced by the source cited on this page: "Further, as noted above, the Act of 2020 is a beneficial piece of legislation and the benefit under such legislation should enure to the benefit of the assessee and cannot be denied by taking hyper-technical view." The decision followed or applied K.P. Varghese v. Income Tax Officer, Ernakulam — applied for the relevance of the mover's speech; Commissioner of Sales Tax v. Mangal Sen Shyam Lal — applied; Tinsukhia Electric Supply Co. Ltd. v. State of Assam — applied.
It was decided by the High Court on 2021-06-28 and is reported as Direct Tax Vivad se Vishwas Act, 2020; Writ Petition No.12038 of 2021 (High Court for the State of Telangana). Binding within that High Court's jurisdiction. Persuasive elsewhere. A High Court decision binds the assessing officer, the Commissioner (Appeals) and the Income Tax Appellate Tribunal within that state, and is persuasive elsewhere. If your assessment is in a different jurisdiction, check whether your own High Court has taken the same view before relying on it. On section DTVSV 2020, the practical question is whether the facts of your own notice match the facts of this case closely enough for the same rule to apply.
It helps the taxpayer. The writ petition was allowed, the rejection order of 22 April 2021 was set aside, and the designated authority was directed to accept the revised Forms 1 and 2 filed on 31 March 2021, process them, issue Form 3 and accept payment before the notified due date (para 45). The benefit of deemed pendency under the answer to FAQ 59 is not confined to condonation applications filed on or before 4 December 2020; even after that date, if an appeal is filed with a condonation application and admitted by the appellate authority before the declaration is filed, the benefit must be extended (paras 37 and 38). Independently, condonation of delay relates back, so that the appeal is treated as filed in time and therefore as pending before the appellate forum on the specified date, making the assessee an 'appellant' within s.2(1)(a)(i) and the tax assessed 'disputed tax' within s.2(1)(j)(B) (para 40). It arises in Appeals and How Tax Law Is Read matters, on section DTVSV 2020 of the Income Tax Act 1961, and was decided by M.S. Ramachandra Rao J and T. Vinod Kumar J (judgment per T. Vinod Kumar J). Before relying on it, read the source linked on this page and check whether it has since been distinguished, overruled or overtaken by an amendment to the Income Tax Act. In practice the steps that follow from it are these. Run the relation-back argument as an independent limb: once delay is condoned, the appeal is treated as filed within time and so as pending on the specified date. Where the appellate authority has remanded the matter, argue in the alternative that the remand revives the earlier appeal, and that the revival relates back to that appeal's original filing date. If the portal has already rejected a declaration and the officer says the rejection cannot be recalled, file a fresh declaration within the extended last date rather than arguing about rectification, and preserve the point in the writ. Anchor the argument in the Statement of Objects and Reasons and the Finance Minister's Budget speech, both of which the Court reproduced, to establish the Act as beneficial legislation.
Validity check could not be completed. Validity check could not be completed. No later decision following, doubting or distinguishing this order was located, and no citator search was run. The reasoning is consistent with the Delhi High Court in Shyam Sunder Sethi (3 March 2021) and the Gujarat High Court in Maheshbhai Shantilal Patel (23 September 2021), both read this pass, but neither cites this order and this order cites neither of them. No source could be cited for that finding. Checking whether an authority still stands matters as much as knowing what it held: a decision may be overruled on one point and survive on another, or the provision it interprets may have been amended since. Read the source and the editor's note on this page before relying on it in a reply to an Assessing Officer or in an appeal.
Three defects in the report. (1) Para 44 refers to declarations 'filed by the petitioner on 31.03.2021 as well as on 20.02.2021', whereas paras 4, 5 and 31 record the first declaration as filed on 08.02.2021. (2) Para 29 calls CBDT Circular No.21/2020 dated 04.12.2020 a 'Notification No.21/2020', while paras 11 and 32 correctly call it a circular. (3) Para 34 paraphrases the answer to FAQ 59 as applying where 'the limitation for filing appeal has expired before 31.01.2020 ... and the delay is condoned', which does not match the text of FAQ 59 reproduced at para 11 of the same order; the reasoning at paras 35 to 38 is written against the paraphrase. The Statement of Objects and Reasons reproduced at para 19 is that of the Bill and describes the payment structure in outline, not the Table to s.3 as enacted. The document runs to para 46; paras 9 to 17 are counsel's submissions and no locator has been taken from them. This library shows the verification state of every entry openly. This entry has not yet been read in full by a chartered accountant. The summary reflects the sources listed on this page. Read the source before you rely on it in a reply to an Assessing Officer or in an appeal before the Commissioner (Appeals) or the Income Tax Appellate Tribunal.
The writ petition was allowed, the rejection order of 22 April 2021 was set aside, and the designated authority was directed to accept the revised Forms 1 and 2 filed on 31 March 2021, process them, issue Form 3 and accept payment before the notified due date (para 45). The benefit of deemed pendency under the answer to FAQ 59 is not confined to condonation applications filed on or before 4 December 2020; even after that date, if an appeal is filed with a condonation application and admitted by the appellate authority before the declaration is filed, the benefit must be extended (paras 37 and 38). Independently, condonation of delay relates back, so that the appeal is treated as filed in time and therefore as pending before the appellate forum on the specified date, making the assessee an 'appellant' within s.2(1)(a)(i) and the tax assessed 'disputed tax' within s.2(1)(j)(B) (para 40).
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