Court Invalidates Revised Form 3; Orders Compliance with Original Declaration for 2014-15 Under Tax Dispute Resolution Act.

The court set aside the issuance of the revised Form 3, finding it unsustainable. It directed the respondents to adhere to the petitioner's original declaration by Form 3 for the assessment year 2014-15, in line with the Direct Tax Vivad Se Vishwas Act, 2020. The court emphasized the importance of considering the rectification order under section 154 of the Income Tax Act and relevant CBDT circulars, rejecting the respondents' justification for treating a portion of the income as unaccounted and taxable at a higher rate.

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Issues:
Challenging orders revising petitioner's declaration for assessment year 2014-15, Rectification application allowed, Revised Form 3 issued, Dispute over tax liability, Issuance of revised Form 3 challenged.

Analysis:
The petitioner challenged orders revising the declaration for the assessment year 2014-15, passed by the Principal Commissioner of Income Tax-3, Pune. Initially, the petitioner declared a total income of Rs.64,47,850/- for the year, and after scrutiny, an additional amount of Rs.98,75,513/- was added to the income. A rectification application was filed by the petitioner seeking correction of the tax computation, which was allowed, resulting in a reduced tax and interest payable amount. Subsequently, the petitioner applied under the Direct Tax Vivad Se Vishwas Act, 2020, and Forms 1 and 2 were accepted, leading to the issuance of Form 3 reflecting a balance amount payable by the petitioner. The petitioner claimed to have deposited the balance amount and submitted the necessary forms to the authorities.

The dispute arose when the respondents issued a revised Form 3, treating a portion of the income as taxable at 30%, contrary to the rectification order that deemed it taxable as long-term capital gain at 20%. The petitioner objected to this revision, which was rejected by the respondents, justifying the revised Form 3 based on the assessment proceedings and denial of the claim for exemption of Long Term Capital Gain. The respondents relied on the definition of 'Disputed Tax' under the Act, arguing that the revised Form 3 reflected the correct tax liability based on the Act of 2020 provisions.

The petitioner contended that the rectification application was filed post the rectification order, and the liability was correctly determined earlier, while the respondents argued that the rectification order was erroneous and the income should be taxed as unaccounted income under section 115BBE of the Act. The Court considered the rectification order passed under section 154 of the Income Tax Act, which rectified the mistake in the tax computation, and emphasized that the authorities should have taken into account the rectification order and relevant circulars issued by the CBDT.

The Court found the issuance of the revised Form 3 unsustainable, setting aside the impugned orders and directing the respondents to act in accordance with the petitioner's original declaration by Form-3 for the relevant assessment year 2014-15, as per the Act of 2020 clarification.

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