2026 (2) TMI 883

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....16.03.2020. During the pendency of the said Revision Petitions, the Government of India, Ministry of Finance, introduced the Direct Tax Vivad Se Vishwas Act, 2020 (for short, "the Act of 2020"). The rules under the Scheme were framed vide Notification No. S.O. 1129(E). 3. The petitioner claims to have applied under the Act of 2020 before the respondent No. 2 by submitting online Forms 1 and 2 within the prescribed time for availing the benefits under the Act of 2020. In order to claim the benefit of the Scheme, the petitioner furnished a declaration on 23.02.2021 and undertaking that he would not pursue any remedy in relation to the tax arrears. Thereafter, Form 3 dated 04.03.2021 was issued to the petitioner by respondent No. 2. Subsequently, through his Tax Consultant, the petitioner sought withdrawal of the two Revision Petitions, and respondent No. 2 vide a common order dated 17.03.2021, disposed of the said Revision Petitions accordingly. 4. Thereafter, the petitioner received a communication dated 14.05.2022 informing him that Form-4 under the Act of 2020 had not been submitted for the Assessment Year 2011-2012. Vide letter dated 16.05.2022, the petitioner sought time t....

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....turn and total taxable income was Rs. 39,23,680/-, and accordingly, a demand for an amount Rs. 29,73,640 was created as per the said assessment order. Through separate order dated 14.06.2019, a penalty of Rs.10,62,040.00 was also imposed upon the petitioner in terms of Section 271(1)(c) of the Income Tax Act. The respondents have admitted the filing of the Revision Petitions and the enactment of Act of 2020 and further as per the said Act, any litigant who has filed the appeal/writ petition/SLP, be the Assessee of the Income Tax or the Income Tax Department may, subject to being eligible, apply for remission/concession in the payment of Income tax and recall of any penalty/interest. The petitioner applied by way of submitting online Form-1 and undertaking under sub-section 5 of Section 4 of the Act of 2020 on 23.02.2021. Form-3 under sub-section (1) of the section 5 of Act of 2020 was issued to the petitioner by respondent No.3 on 04.03.2021 determining that as against the assessed amount of tax, interest and penalty to the tune of Rs. 39,23,680/-, the amount payable on or before 31.03.2021 would be Rs. 10,62,037/-. The petitioner was required to deposit Rs. 11,68,241/- if the paym....

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....issued by the designated authority on 04.03.2021 meaning thereby that the Revision Petitions preferred by the petitioner in fact were deemed to have been withdrawn on 04.03.2021 notwithstanding the formal order of disposal of the Revision Petitions in terms of order dated 17.03.2021. He has further submitted that Section 4(6) of the Act of 2020 provides that declaration under sub section (1) of Section 4 shall be presumed never to have been made if the declarant acts in any manner which is not in accordance with the undertaking given by him under sub-section (5), and in such cases, all the proceedings and the claims which were withdrawn under Section 4 of the Act shall be deemed to have been revived. Lastly, he submitted that for whatever the reasons the petitioner could not follow the mandate of the Act of 2020 in view of the provisions contained in Section 4(6) of the Act of 2020, the Revision Petitions preferred by the petitioner stood automatically revived. It is further submitted that in Form-1, the petitioner made reference only to Section 147 of the Income Tax Act and did not specifically mention Section 271(1)(c) of the said Act but in Schedule-X, the petitioner clearly ref....

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....te of Form-3. To resolve this issue, it is necessary to examine the relevant provisions of Section 4 of the Act of 2020, which are extracted below: 4. Filing of declaration and particulars to be furnished-(1) The declaration referred to in section 3 shall be filed by the declarant before the designated authority in such form and verified in such manner as may be prescribed. (2) Upon the filing the declaration, any appeal pending before the Income Tax Appellate Tribunal or Commissioner (Appeals), in respect of the disputed income or disputed interest or disputed penalty or disputed fee and tax arrear shall be deemed to have been withdrawn from the date on which certificate under sub-section (1) of section 5 is issued by the designated authority. (3) Where the declarant has filed any appeal before the appellate forum or any writ petition before the High Court or the Supreme Court against any order in respect of tax arrear, he shall withdraw such appeal or writ petition with the leave of the Court wherever required after issuance of certificate under sub-section (1) of section 5 and furnish proof of such withdrawal alongwith the intimation of payment to the ....

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....g appeal before the Income Tax Appellate Tribunal or the Commissioner (Appeals) shall be deemed withdrawn from the date the Designated Authority issues the certificate under Section 5(1) of the Act. 16. This provision of 'deemed withdrawal' operates automatically by operation of law and is independent of any formal order passed by the concerned authority. In the instant case, it is the admitted position of the respondents that the petitioner submitted Form-1 and the requisite undertaking under Section 4(5) of the Act on 23.02.2021. Consequently, the Revision Petitions are deemed to have been withdrawn on 04.03.2021 when the Form-3 under Section 5(1) of the Act of 2020 was issued, notwithstanding that the formal order of withdrawal was passed only on 17.03.2021. 17. It is further undisputed that the petitioner failed to adhere to the Act's requirements by not depositing the amounts stipulated in the Form-3. Specifically, the petitioner was obligated to pay Rs.10,62,037 on or before 31.03.2021, or Rs.11,68,241 thereafter. Despite multiple extensions of the deadline, the petitioner failed to deposit the amounts specified in the Form-3. 18. Section 4(6) of the Act ....

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....sequences under the Income Tax Act against the declarant' necessarily implies that any adverse orders previously passed against the declarant-assessee are also revived. This ensures that upon the failure of the declaration, the parties are restored to their original positions, including the petitioner's right to pursue his challenge against such orders. 23. Accordingly, we are of the considered view that by virtue of Section 4(6) of the Act of 2020, once the petitioner failed to comply with the statutory mandate within the stipulated time, the Revision Petitions stood automatically revived by operation of law. The parties are, therefore, restored to the same legal position they occupied prior to the filing of the declaration. 24. Authorities administering a beneficial scheme designed for the resolution of tax disputes are expected to adopt a purposive approach that furthers its underlying objectives, particularly where an assessee demonstrates a clear intent to settle. In the present case, we find that the respondents proceeded on the erroneous premise that the petitioner was ineligible under the DTVSV Scheme, 2024, on the ground that no Revision Petitions were pending on....