Facts of the Case

The petitioner filed its income tax return for AY 2008–09, which was later reassessed under Sections 147/144, determining taxable income. Dissatisfied, the petitioner filed:

  • A physical appeal (2016) before CIT(A)
  • A digital appeal (2017) in compliance with CBDT Circular

CIT(A) passed two orders dated 06.07.2018:

  • Dismissed physical appeal (technical ground)
  • Rejected digital appeal on merits

The petitioner mistakenly filed an appeal before the Tribunal against the wrong (physical appeal) order, leading to:

  • Tribunal remanding the matter (01.04.2019)
  • Dismissal of rectification application under Section 254(2)
  • Filing of a fresh appeal (10.02.2020) against the correct order

Subsequently, the petitioner filed declarations under the Vivad Se Vishwas Act, 2020, which were rejected on the ground that no appeal was pending on 31.01.2020.

Issues Involved

  1. Whether the petitioner’s appeal could be considered “pending” as on 31.01.2020 under Section 2(n) of the 2020 Act?
  2. Whether procedural mistakes by counsel can deprive the assessee of statutory benefits?
  3. Whether condonation of delay and remand orders revive or relate back to pending proceedings?

 Petitioner’s Arguments

  • The appeal filed on 10.02.2020 (before enactment of the Act) was later admitted after condonation of delay.
  • Condonation of delay relates back in time, making the appeal deemed pending on the specified date.
  • Tribunal’s remand order revived the earlier appeal, thereby maintaining pendency.
  • The petitioner should not suffer due to inadvertent procedural errors by counsel.

 Respondent’s Arguments

  • The crucial test is whether the appeal was actually pending on 31.01.2020.
  • The condonation order was passed later (18.12.2020), hence cannot retrospectively create eligibility.
  • The Vivad Se Vishwas Act provides tax relief and must be strictly interpreted.

 Court’s Findings / Judgment

  • The Court held that the Tribunal’s earlier remand order revived the appeal, thereby making it pending.
  • The distinction between physical and digital filing modes is irrelevant under the Act.
  • Procedural lapses should not defeat substantive rights, especially when the assessee acted bona fide.
  • The Court emphasized that mistakes of counsel should not prejudice litigants.

Final Order:

  • Rejection orders dated 31.01.2021, 25.03.2021, and 09.04.2021 were set aside
  • Authorities directed to process declarations under the Vivad Se Vishwas Act

Important Clarifications

  • “Pending appeal” must be interpreted liberally under beneficial tax schemes.
  • Mode of filing (physical vs digital) does not affect pendency status.
  • Condonation of delay may restore legal position retrospectively in appropriate cases.
  • Courts discourage penalizing litigants for procedural/technical mistakes.
  • The judgment reinforces substance over form in tax dispute resolution schemes.

Link to download the order - https://delhihighcourt.nic.in/app/showFileJudgment/RAS21042023CW56492021_182941.pdf

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