ARVINDBHAI MANUBHAI PATEL,AHMEDABAD vs. ITO, WARD 3(3)(5), AHMEDABAD, AHMEDABAD

The Assessee has raised the following grounds of Appeal: -

The assessee is an individual senior citizen and agriculturist. For the year under consideration, the assessee did not file the original return of income. Subsequently, notice under section 148 of the Act was issued on 30.03.2022. In response, the assessee filed the return of income on 30.01.2023, declaring total income of ₹940 after claiming deductions under Chapter VI-A of the Act. The case arose from the sale of agricultural lands situated at Kathwada, Ahmedabad. The assessee claimed deduction under section 54B of the Act in respect of reinvestment in agricultural land. The Assessing Officer disallowed the claim on the ground that the new agricultural land had not been acquired within the prescribed period and made an addition of ₹46,58,299 towards long-term capital gains while completing the reassessment on 21.03.2023. ITA No. 510/AHD/2026, AY-2015-16 - 3–

The assessee challenged the assessment before the Ld. CIT(A). The appeal was initially dismissed by the Ld. CIT(A) on 25.06.2024. Thereafter, the assessee preferred an appeal before this Tribunal in ITA No. 1448/Ahd/2024. Vide order dated 14.11.2024, the Tribunal restored the matter to the file of the Ld. CIT(A) for de novo adjudication.

During the fresh appellate proceedings, the assessee submitted that the dispute was sought to be resolved under the Direct Tax Vivad Se Vishwas Scheme, 2024. The assessee relied upon the order dated 20.01.2025, bearing S.O. 348(E), issued by the Ministry of Finance, Department of Revenue, which, according to the assessee, addressed the difficulty faced by persons whose appeals were not pending on the specified date but who still had time to prefer an appeal before the higher appellate authority. The assessee submitted that he had filed Form 1 under the Scheme and that the Principal Commissioner of Income Tax had issued Form 2 determining the amount payable at ₹8,16,686. The assessee further claimed to have paid the said amount within the prescribed time and filed Form 3 along with proof of payment.The assessee also submitted that the above documents were furnished before the Ld. CIT(A) on 07.10.2025 and that a request for withdrawal of the appeal was filed on 11.12.2025 on account of the assessee’s opting for the Scheme. However, vide the impugned order dated 17.12.2025, the Ld. CIT(A) proceeded to confirm the disallowance of deduction under section 54B of the Act and dismissed the appeal.

The learned Authorized Representative submitted that the assessee had taken steps to resolve the disputed tax liability under the Scheme and had placed the relevant forms and proof of payment before the Ld. CIT(A). It was contended that the Ld. CIT(A) ought to have examined the assessee’s request in the light of the applicable provisions of the Scheme and the notification dated 20.01.2025 before proceeding to adjudicate the appeal on merits. It was further submitted that the request for withdrawal of the appeal had not been dealt with appropriately and that the impugned order was, therefore, liable to be set aside.

We have heard the rival submissions and perused the material available on record. The issue requiring consideration at this stage is whether the assessee’s claim regarding resolution of the disputed tax liability under the Direct Tax Vivad Se Vishwas Scheme, 2024, and the consequential request for withdrawal of the appeal were duly examined by the Ld. CIT(A).The material placed before us indicates that the assessee claims to have filed Form 1, received Form 2 determining the amount payable at ₹8,16,686, paid the said amount and filed Form 3 along with proof of payment. The assessee also claims to have submitted a request for withdrawal of the appeal before the Ld. CIT(A).

1 However, the material presently available does not conclusively establish whether the competent authority issued the final settlement order in Form 4 or whether the statutory process for settlement under the Scheme was completed. The filing of the declaration, determination - 5– of the amount payable and payment thereof are relevant matters, but the legal effect of those steps must be examined in conjunction with the applicable provisions of the Scheme and the status of the final settlement.

2 In these circumstances, it would not be appropriate either to presume that the dispute stood finally settled or to disregard the assessee’s claim without verifying the relevant documents. The eligibility of the assessee under the Scheme, including the applicability of the order dated 20.01.2025, also requires examination with reference to the facts and the documents placed on record.

3 We, therefore, consider it appropriate to restore the matter to the file of the Ld. CIT(A) for the limited purpose of examining the assessee’s claim under the Direct Tax Vivad Se Vishwas Scheme, 2024, and the legal effect thereof.The Ld. CIT(A) shall verify the declaration filed by the assessee, Form 2 issued by the competent authority, proof of payment, Form 3 and the status of issuance of Form 4 or any other final settlement communication issued by the competent authority. The Ld. CIT(A) shall also examine the applicability of the notification/order dated 20.01.2025 and decide the effect of the assessee’s request for withdrawal in accordance with the applicable provisions of law.If the Ld. CIT(A), upon verification, finds that the disputed tax liability has been validly and finally settled under the Scheme, the appeal shall be dealt with in accordance with the legal consequences flowing from such settlement. If the settlement has not attained finality or the assessee’s claim is not accepted under the applicable provisions, the Ld. CIT(A) shall proceed to - 6– adjudicate the appeal on merits, including the claim for deduction under section 54B of the Act, after affording the assessee a reasonable opportunity of being heard.

Accordingly, the appeal of the assessee is allowed for statistical purposes.