The Delhi High Court has held that there is no provision under Direct Tax Vivad Se Vishwas Act, 2020 (DTVSV Act) empowering designated authority to reopen concluded settlement.
The bench of Acting Chief Justice Vibhu Bakhru and Justice Tushar Rao Gedela has observed that a plain reading of the provisions of the DTVSV Act indicates that once a final certificate is issued under Section 5(1), all disputes with regard to the ‘tax arrear’ stand concluded. The issuance of the certificate is without authority of law.
The petitioner/assessee has challenged the Form No.3 dated 29.01.2021 ( certificate) issued by the Principal Commissioner of Income Tax. The petitioner had filed the return of its income for the Assessment Year (AY) 2012-13, declaring an income of Rs. 13,57,73,250. The return was accepted.
However, by a notice, issued under Section 148 of the Income Tax Act, 1961, the assessment was sought to be reopened under Section 147 of the Income Tax Act.
The Assessing Officer (AO) passed an assessment order under Section 147 read with Section 143(3) of the Income Tax Act determining the petitioner’s income for the AY 2012-13 at Rs. 16,73,57,840/- after making an addition of Rs. 3,07,39,590/- as undisclosed expenditure under Section 69C of the Income Tax Act.
The petitioner preferred an appeal before the learned Commissioner of Income Tax (Appeals) under Section 246A of the Income Tax Act.
While the said appeal was pending, the Parliament enacted the Direct Tax Vivad Se Vishwas Act, 2020. The petitioner qualified as an ‘appellant’ under Section 2(1)(a) of the DTVSV Act and accordingly, made a declaration under Section 4(1) of the DTVSV Act seeking to settle the ‘tax arrear’.
Rule 7 of the DTVSV Rules expressly provides that the order of the designated authority under sub-Section (2) of Section 5 with respect to the payment of amount made by the declarant as per the certificate granted under sub- section (1) of section 5, shall be in Form No. 5.
The court while allowing the appeal quashed the certificate.
Case Details
Case Title: S A N Garments Manufacturing Private Limited Versus PCIT
Case No.: W.P.(C) 932/2024 & CM APPL. 3891/2024
Date: 12.12.2024
Counsel For Petitioner: R. Santhanam
Counsel For Respondent: Puneet Rai