TaxTMI 
TaxTMI 
2021 (9) TMI 704
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...."Act"). Thereafter, there was a search and seizure action under Section 132 and survey action under Section 133A in the case of Petitioner as well as Mrs. Pratibha Shah and Ms. Shirin Shah, both partners of Petitioner on 22nd March 2018 at various premises and subsequent to the said proceedings, a notice dated 30th March 2018 under Section 148 of the Act was issued in response to which appellant had filed Return of Income on 18th May 2018 declaring an income of Rs. 59,49,370/- claiming that the compensation of Rs. 135 Crores was not taxable as the same was received to withdraw the suit i.e. against the assessee's right to sue. On 18th July 2018 DDIT (Investigation) sought clarification as to why the sum of Rs. 135 Crores should not be treated as taxable capital gain. Petitioner filed reply on 20th July 2018 submitting that the said sum was received by it in lieu of its right to sue for damages and therefore not chargeable to tax. An order of reassessment was passed on 24th December 2018 assessing Rs. 135 Crores as long term capital gains. Aggrieved by the same, Petitioner filed an appeal before Commissioner of Income Tax (Appeals) ("CIT(A)") on 23rd January 2019 and as on 31st Janu....
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.... of the declarant is treated as Search case. Since the disputed tax is more than Rs. 5 Crore, the declarant is ineligible to opt for DTVSV." 7. Petitioner submits that to the notice dated 23rd March 2021, it filed reply dated 30th March 2021. 8. On behalf of Petitioner, Mr. Pardiwalla, learned Senior Counsel submits that there has been a breach of principles of natural justice as no opportunity of hearing was granted prior to revocation of Form 3 and rejection of Petitioner's application. Learned Senior Counsel submits that the email dated 23rd March 2021 to show cause as to why Petitioner's case should not be treated as a Search Case by referring to two circulars No.21/2020 and 4/2021 for the first time granted three days' time to file reply to Petitioner, but on the third day itself viz. on 26th March 2021, Designated Authority has rejected Petitioner's application without even waiting for a reply which eventually came to be filed on 30th March 2021 and even though the time of the DTVSV scheme was extended till 30th June 2021. Mr. Pardiwalla submits that even in the said submission, it was requested on behalf of Petitioner for opportunity of personal hearing to make ....
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....d tax exceeds five crore rupees. Learned Senior Counsel submits that Petitioner's case is not a Search Case as alleged in the Show Cause Notice dated 23rd March 2021, as Petitioner's assessment does not have any direct connection with the undisclosed income found in the search proceedings. 12. The Revenue on the other hand, has filed its affidavit in reply dated 23rd June 2021 submitting that Form 3 issued by Respondent No.1 was lawfully rejected based on application of CBDT circular No.21 of 2021 dated 4th December 2020 read with circular No. 4 of 2021 dated 23rd March 2021 and that Respondent No.2 sent e-mail dated 23rd March 2021 as a means of providing opportunity to Petitioner to present its case. 13. It is also submitted on behalf of the Respondents-Revenue in paragraph 4.5 of its reply that though initially Form 3 was issued by Respondent No.1 on 17th October 2020, subsequently in view of FAQ No. 70 of CBDT circular No. 21 of 2020 dated 4th December 2020 it was clarified that if the assessment order has been framed in the case of a taxpayer under Section 143(3)/144 of the Income Tax Act, 1961 based on the search executed in some other taxpayer's case then it is ....
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....2020. He draws our attention to Question No.46 with reference to the competence of the Designated Authority to rectify errors. The said question and answer are quoted as under :- "Question No.46 : Whether DA can amend his order to rectify any patent errors? Answer : Yes, the DA shall be able to amend his order under section 5 to rectify any apparent errors." 18. Mr. Suresh Kumar submits that in view of the said clarification issued under Sections 10 and 11 of the DTVSV Act, the Designated Authority is competent to amend his order under Section 5 to rectify any apparent errors. In this view of the matter, the cancellation of the earlier Form 3 as well as rejection of the application, according to him, is legitimate. 19. He submits that, therefore, the revocation of Form 3 and rejection of Petitioner's application under the DTVSV Act was justified and completely within the purview of provisions of the DTVSV Act, the same being done after giving the Petitioner opportunity to present its case by adhering to principles of natural justice. He urges that therefore this Petition ought to be dismissed. 20. We have heard Mr. Pardiwalla, learned Senior Counsel for P....