Modi Shelters Private Limited vs. Income Tax Officer
What did the High Court hold?
The High Court partly allowed the writ petition. While acknowledging the difficulty in granting the first relief due to the Vivad Se Vishwas Scheme no longer being in force and the authorities lacking the power to restore cases under it, the Court focused on ensuring the petitioner was not left remediless. Considering the factual matrix, particularly that the petitioner had availed the benefit for the quantum part and that Form 2 indicated a refund payable, the Court held that the inadvertence should not render the petitioner remediless. Consequently, the Court directed Respondent Nos. 4 and 5 (National Faceless Appeal Centre and Commissioner of Income Tax Appeals) to forthwith restore Appeal Nos. NFAC/2017-18/10105074 and NFAC/2017-18/10105073 to their original numbers and to proceed to decide the appeals on their own merits in accordance with law. The respondents were expected to open the appeals for this purpose. No order as to costs was made.
What were the facts?
Modi Shelters Private Limited (the assessee) filed a writ petition before the High Court of Telangana challenging the rejection of its declaration under the Vivad Se Vishwas Scheme, 2024. The assessee had two appeals pending before the Appellate Authority for Assessment Year 2018-19, one concerning quantum and the other penalty. The assessee withdrew both appeals to avail the Vivad Se Vishwas Scheme. While the quantum part was settled, the penalty part faced issues. The assessee filed Form 2, which indicated a refund payable. However, Form 3 was not filed due to a misunderstanding, leading to the rejection of the declaration. The assessee sought directions to either allow filing Form 3 or restore the withdrawn appeals.
What were the issues?
1. Whether the Petitioner should be directed to restore Form 2 and permit filing of Form 3 along with proof of withdrawal of appeals for AY 2018-19 under the Vivad Se Vishwas Scheme, 2024, and consequently direct Respondent No. 6 to consider Form 3 and issue Form 4? (Question of law and fact, concerning the Vivad Se Vishwas Scheme, 2024). 2. Alternatively, whether Respondent Nos. 4 and 5 should be directed to restore Appeal Nos. NFAC/2017-18/10105074 and NFAC/2017-18/10105073, dismissed as withdrawn under the DTVSV Scheme 2024? (Question of law and fact, concerning restoration of appeals). Assessee's Contentions: The assessee argued for permission to pursue the claim under the Vivad Se Vishwas Scheme, 2024, or alternatively, for the restoration of the appeals. The non-submission of Form 3 was due to an inadvertent misunderstanding, especially since Form 2 indicated a refund was payable. Revenue's Contentions: The revenue contended that the Vivad Se Vishwas Scheme was no longer in existence, and the required formalities were not completed at the relevant time. Therefore, the authorities were justified in rejecting the declaration. The revenue also argued that since the appeal filed for penalty was withdrawn without any liberty, its restoration might not be possible.
AI-generated summary — verify with the full judgment below
Cause title — parties, addresses and appearances
The Court made the following: ORDER
IN THE HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD THE HONOURABLE SRI JUSTICE P.SAM KOSHY AND THE HONOURABLE SRI JUSTICE NARSING RAO NANDIKONDA W.P.No.519 OF 20 '2f, 2t-04.2026 Between: Modi Shelters Privare Limited, a company registered under the Companies Act, 1956, represenred by its Managing Director Mr. Sourav Modi . . . Petitioner AND Income Tax Officer, Ward- l 6(4), I.T. Tower, A.C.Guards, Masab Tank, Hyderabad - 500 004 and six others. . ..Respondents ORDER; (per Hon'ble Sri Jusrice P.Sam Koshy) Heard Ms. K. Prabhabati, learned counsel for the petitioner and Mr. K.Sudhakar Reddy, learned Senior Standing Counsel for the Income Tax Department for respondent Nos.l to 6. perused the record.
2
The present is a writ petition which has been filed by the petitioner seeking for, firstly directing respondent No.6 to accept Form 3 along rvith proof of withdrawal of the appeal for the assessment year 2018-19 under the Vivad Se Vishwas Scheme, 2024 and also to consider the same and pass appropriate orders under the said Scheme of 2024. In the altemative, the petitioner has also prayed lbr a direction to respondent Nos.4 and 5 to restore Appeal Nos.NFAC/2017-18/10105074 an'l NFAC/2017- l8/10105073 to its original number and to proceed and decide the same on its own rnerits
The whole dispute arose where for the assessment year 2018-19, the Assessing Officer had passed an order both on quantum and penalty against the assessee which was subjected to challenge by way of two separate appeals before the Appellate Authority. Pending the appeals before the Appellate Authority, came the Scheme of 2024 under the Vivad Se Vishwas. The petitioner preferred to avail the benefits under the said Scheme and in the process withdrew both the appeals, both on quantum and penalty. So far as availing of Uen'tifi,f under the )' 3 Vivad Se Vishwas Scheme on quantum is concerned, the petitioner has availed the said benefit and the matter stood settled However, so far as the penalty part is concemed, the petitioner approached the authorities under the said Scheme and the authorities also accepted the proposal put-forth and which was accepted by the petitioner and in the process, the petitioner had also filled up Form 2. However, inadvertently, according to the petitioner, Form 3 could not be filed under the wrong impression of the fact that since there was a refund payable to the petitioner, as would be reflected from Form 2 dated 18.03.2025. However, on account of non-submission of Form 3, the proceedings got rejected finally and the declaration submitted stood rejected consequently.
It is being aggrieved of that, the present writ petition has been filed contending that either the department may permit the petitioner to pursue the claim under the Vivad Se Vishwas Scheme, 2024 or at least in the altemative restore the appeal. The leamed Standing Counsel appearing for the respondents contended that since the Scheme itself is not in 4 cxistencc any further and moreover the formalities required at the relevant point o1- time were not completed, the authorities cannot be blamed for rejecting the declaration. The leamed Standing Counsel further contended that since the earlier appeal which was filed as penalty u,as withdrawn without any liberty, the restoration of the appeal also may not be possible.
Be that as it may, considering the factual matrix of the case in its entirety, more particularly taking into consideration the fact that the petitioner has been permitted to avail the benefit under the Vivad Se Vishwas Scheme so far as quantum assessed in the assessment order is concemed and moreover considering the fact that as per Form 2 that was filed and which was accepted by the department, there is a refund which was payable to the petitioner, the inadvertence that has occurred at the hands of the petitioner should not render the petitioner remediless. Though we find it difficult to accept relief No. 1 which has been sought for on account of the Scheme itself not being in force as of now and the authorities not having the power to restore the case under the Vivad Se Vishwas Scheme, ensuring that the petitioner is not 5 To, rendered remediless, we direct respondent Nos.4 and 5 to forthwith restore Appeal Nos.NFAC /2017-18/lOl05O74 and NFAC/2017-18/10105073 to its original number and to proceed further and decide the appeal on its own merits in accordance with law. As a consequence of the appeal being ordered to be restored, the respondents are expected to open the appeal and to proceed further.
The writ petition is, accordingly, partly allowed. There shall be no order as to costs. Consequently, miscellaneous petitions pending, if any, shall stand closed. A.SREENIVASA REDDY ASSISTANT REGISTRAR //// SECTION OFFICER
The lncome Tax Officer, Ward - 16(4), l.T. Tower, A'C' Guards, Masab Tank' Hyderabad - 500004. 2.ThelncomeTaxOfficer,Ward-16(3),l.T.Tower,A'CGuards,MasabTank' Hyderabad - 500004. 3. The Assessment Unit, National Faceless Assessment centre,lncome Tax Department, Ministry of Finance, Room No. 4O1 ,2nd Floor, E-Ramp' Jawaharlal Nehru Stadium, Delhi - 110003'
The National Faceless Appeal Centre, Commissioner of lncome Tax Appeals' Delhi.
The Commissioner of lncome Tax, Appeal - 1, Mumbai.
The Principal Commissioner of lncome Tax 4, 3'd Floor, AayakarBhawan, Basheer Bagh, Hyderabad - 500004. 7. The Secretary, Union of lndia, Department of Revenue, Ministry of Finance, North Block, New Delhi -1 10001 .
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One CC to Ms.K.PRABHABAT|, Advocate. tOpUCl
One CC to SRI K SUDHAKAR REDDY (Sr SC FOR TNCOME TAX) tOpUCl 10 Two CD Copies BSK TKS
tritlr{+=4-- - -..1-, / \ HIGH COURT DATED: 2110412026 ORDER WP.No.519 o12026 (oR 1 r{E S € 3 zoilAY2u6 '=o A i * pFsoor61r PARTLY ALLOWING THE WRIT PETITION WITHOUT COSTS -1 r{ ry5r $ \ i i I I I i I
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