“We are not inclined to interfere with the impugned judgment as the criminal prosecution relates to delayed payment of self assessment tax and the application under the Direct Tax Vivad Se Vishwas Act, 20201 relates to the additions made in the assessment order”, the Supreme Court noted, disposing appeals against the assessee by the Revenue.
“Criminal prosecution was on a separate and different issue, and would have continued, even if the application under the (Direct Tax Vivad Se Vishwas) Act was accepted”, the Apex Court Bench of Justices Sanjiv Khanna and Justice S V N Bhatti clarified.
“We are informed that the prosecution case has been dismissed. That may not be material and relevant in terms of the objective and purpose of the (Direct Tax Vivad Se Vishwas) Act”, the Apex Court noted.
The Bombay High Court had earlier ruled that the Delayed self-assessment tax payment cannot be tax arrear for Vivad se Vishwas Scheme.
The petitioner, Macrotech Developers Limited is a public limited company incorporated under the Companies Act, 1956 having its registered office at Mahalaxmi, Mumbai. It is engaged in the business of land development and construction of real estate properties.
The petitioner had contended that on the basis of the answer given to question No.73 in its declaration would be rejected since the declaration pertains to the assessment year 2015-16 and prosecution has been launched against the petitioner for delayed payment of self-assessment tax for the assessment year 2015-16.
The division bench of Justice Ujjal Bhuyan and Justice Milind N Jadhav had noted that in so far the prosecution against the petitioner is concerned, the same has been initiated under section 276-C(2) of the Income Tax Act because of the delayed payment of the balance amount of the self-assessment tax. Such delayed payment cannot be construed to be a tax arrear within the meaning of section 2(1)(o) of the Act.
The Bombay High Court had thus held that “the clarification given by respondent by way of answer to question No.73 vide circular No.21/2020 dated December 4, 2020 is not in consonance with section 9(a)(ii) of the Vivad se Vishwas Act and, therefore, the same would stand set aside and quashed. Declaration of the petitioner would have to be decided by respondent in conformity with the provisions of the Vivad se Vishwas Act dehors the answer given to question No.73 which is set aside and quashed.”
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