MAHADEO EKNATH KONDHARE vs. INCOME TAX OFFICER WARD2(5) PUNE AND ANR

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WP/3966/2025HC BombayHCBM01012677202524 March 2025Bench: HON'BLE SHRI JUSTICE M.S. SONAK,HON'BLE SHRI JUSTICE JITENDRA SHANTILAL JAIN2 pages
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What did the High Court hold?

The High Court held that the issuance of Form-5 to the petitioner under Rule 7 of the Direct Tax Vivad Se Vishwas Rules, 2020, meant that no penalty could be imposed. Rule 6 of the same Rules explicitly provides that the designated authority shall not institute any proceeding, impose any penalty, or charge any interest under the Income-tax Act in respect of the tax arrear once the provisions of Section 5 are met and Form-5 is issued. Consequently, the petition was allowed in terms of prayer clause (b), quashing and setting aside the order dated 25.07.2023 passed by the National Faceless Appeal Centre and the order dated 31.12.2024 passed by the National Faceless Assessment Centre for Assessment Year 2012-13. The rule was made absolute without any order as to costs. No issue was expressly left undecided.

What were the facts?

The petitioner, Mahadeo Eknath Kondhare, filed a writ petition before the Bombay High Court challenging orders passed by the National Faceless Appeal Centre (NFAC) and the National Faceless Assessment Centre (NFAC) for Assessment Year 2012-13. Subsequently, the petitioner was issued Form-5 under Rule 7 of the Direct Tax Vivad Se Vishwas Rules, 2020. The petitioner argued that this development rendered prayer clause (a) of the petition infructuous. However, prayer clause (b), seeking to quash the appellate and assessment orders, remained relevant due to the dismissal of the petitioner's appeal by the appellate authority and the imposition of a penalty by the Assessing Officer.

What were the issues?

1. Whether the issuance of Form-5 under the Direct Tax Vivad Se Vishwas Rules, 2020, renders the prayer to quash the appellate order dated 25.07.2023 passed by the National Faceless Appeal Centre and the assessment order dated 31.12.2024 passed by the National Faceless Assessment Centre for Assessment Year 2012-13, infructuous. Assessee's Contention: The petitioner argued that due to the issuance of Form-5, prayer clause (a) of the petition was worked out. However, prayer clause (b) survived because the appeal against the assessment order was dismissed, and a penalty was imposed. The petitioner relied on Rule 6 of the Direct Tax Vivad Se Vishwas Rules, 2020, which states that no proceedings, penalty, or interest can be instituted or imposed after the issuance of Form-5. Revenue's Contention: The judgment does not record any specific contentions from the revenue regarding the survival of prayer clause (b) or the applicability of Rule 6.

Which sections of the Income-tax Act were involved?

Rule 6, Rule 7

AI-generated summary — verify with the full judgment below

1 17.wp-3966.25.docx PPN IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION WRIT PETITION NO.3966 OF 2025 Mahadeo Eknath Kondhare .. Petitioner Versus Income Tax Officer, Ward 2(5), Pune & Anr... Respondents ______________________________________________________ Mr. Rahul Sarda a/w Mr. Akshay Pawar for the petitioner. Mr. Vikas T. Khanchandani for the respondents. _____________________________________________________ CORAM M.S. Sonak & Jitendra Jain, JJ. DATED: 24 March 2025 PC (M.S. Sonak, J.) :- 1. Heard learned counsel for the parties. 2. Rule. Rule is made returnable immediately at the request and with the consent of the learned counsel for the parties. 3. Learned counsel for the petitioner submits that on account of subsequent developments under which the petitioner has been issued Form-5 in accordance with Rule 7 of the Direct Tax Vivad Se Vishwas Rules, 2020, prayer clause (a) of this petition will not survive and stands worked out. 4. Learned counsel for the petitioner however, submits that prayer clause (b) would survive because, in the meantime by an order dated 25 July 2023, the petitioner’s appeal against the assessment order has been dismissed by the appellate authority and even the Assessing Officer has imposed a penalty. 5. Now that Form-5 has already been issued to the petitioner, there is no question of imposing any penalty. Rule 6 of the Direct Tax Vivad Se Vishwas Rules, 2020 provides that subject to the PRACHI PRANESH NANDIWADEKAR Digitally signed by PRACHI PRANESH NANDIWADEKAR Date: 2025.03.24 16:10:56 +0530

2 17.wp-3966.25.docx provisions of Section 5, the designated authority shall not institute any proceeding in respect of an offence; or impose or levy any penalty; or charge any interest under the Income-tax Act in respect of the tax arrear. 6. Accordingly, this petition will have to be allowed in terms of prayer clause (b) which reads as follows :- “b) That this Hon'ble Court be pleased to quash and set aside the order dated 25.07.2023 passed by the National Faceless Appeal Centre and the order dated 31.12.2024 passed by the National Faceless Assessment Centre for Assessment Year 2012-13.” 7. Rule is made absolute in terms of prayer clause (b) of this petition without any costs order.

(Jitendra Jain, J) (M.S. Sonak, J)

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