Calcutta HC condones delay in appeals filed by Revenue in Rs. 38,000 Crores Penny Stock scam
A Calcutta High Court division bench, while tolerating the delay in a slew of appeals filed by the Inland Revenue, has ruled that the benefit provided under the Vivad Se Vishwas direct tax scheme is optional on the basis of the reasons given by the authorities.
There was a delay of 331 days in the filing of the appeal by the tax authorities. The same were rejected by the Court observing that the assessee could not benefit from the Vivad Se Vishwas scheme.
The tax authorities have argued that the ongoing cases reveal a grand financial scam that is not just confined to Kolkata but is spreading across the country. Based on a report submitted by the Senior Director of Income Tax (Investigation), Kolkata dated 27.04.2015, it was claimed that a large scale financial scam took place and SEBI also suspended scripts of various companies in which the assessees had transacted and by providing false long term capital gain / short term capital gain accommodation entries, a substantial loss was caused to income which is currently estimated to be conservatively at over Rs 38,000 crore.
Judge TS Sivagnanam and Judge Hiranmay Bhattacharyya observed that the plan was put together considering various factors. There is no obligation for the assessee to take advantage of the scheme as it is purely optional. Therefore, an assessee may or may not choose to benefit from the scheme. The assessee filed an affidavit stating that he was advised to avail himself of the scheme in the event that the income prefers an appeal to this Court against the Tribunal’s decision which was in favor of the assessee.
“We cannot examine the case on abstract propositions or what the assessee’s intention would have been. After careful reading of all the provisions of Act 3 of 2020, it is clear that the benefit provided is optional, a assessee exercising such an option is not automatically entitled to the benefit under the scheme and the authority is entitled to consider and refuse to receive the request for reasons to be attributed. Article 9 also listed the cases where the law will not apply. Thus, on reading Law 3 of 2020 in full, it is clear that the regime proposed therein is not only optional but can never be interpreted as a vested or valuable right. Therefore, the assessee contemplating the scheme cannot be said to have been harmed solely because the incomes preferred the late appeal, as we believe that the scheme does not confer any vested rights on the assessee” , the court said.
Given the seriousness of the case, the Court held that “we are of the view that the cause of justice would be served if the delay in filing the appeal were tolerated and the appeals heard on the merits. so that the Court can determine whether any substantive question of law arises for consideration.
Subscribe to Taxscan AdFree to see the judgment
Support our journalism by subscribing to Taxscan ad-free. follow us on Telegram for quick updates