DIPTI ENTERPRISE ,MUMBAI vs. INCOME TAX OFFICER WARD 33(1)(4), MUMBAI

Q: Which sections of the Income-tax Act were involved?

Section 4, Section 4(6)(b), Section 5, Section 115JC, Section 194IA

ITA 1653/MUM/2025Status: DisposedITAT Mumbai08 May 2025AY 2014-154 pages

AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal held that while the assessee had opted for the Direct Tax Vivad Se Vishwas Act, 2020, they failed to pay the disputed tax. This failure triggered Section 4(6)(b) of the Act, which states that a declaration shall be presumed never to have been made if the declarant violates any conditions or acts contrary to the undertaking. Consequently, all proceedings and claims withdrawn under Section 4, and all consequences under the Income-tax Act, are deemed to have been revived. Therefore, the Tribunal restored the appeal to the file of the CIT(A) with a direction to decide the appeal on its merits after providing the assessee with a reasonable opportunity of being heard. The Tribunal allowed the assessee's appeal for statistical purposes. The specific grounds concerning the additions made by the AO and TDS credit were not decided on merits by the Tribunal as the matter was remanded.

What were the facts?

The assessee, Dipti Enterprises, filed an appeal before the CIT(A) for Assessment Year 2014-15 against an order passed by the Income Tax Officer. The assessee had opted for the Direct Tax Vivad Se Vishwas Act, 2020, and filed Form-1. The CIT(A) dismissed the appeal, believing it to be infructuous due to the assessee availing the Vivad Se Vishwas benefit. However, the assessee had not paid the disputed tax as required by the Act, and Form-5 was not issued. The assessee also contended that their adjournment request was ignored, violating natural justice. The appeal before the Tribunal challenges the CIT(A)'s dismissal and the Assessing Officer's additions of Rs. 55,50,000/-, Rs. 1,87,44,874/-, and denial of TDS credit.

What were the issues?

1. Whether the Learned CIT(A) erred in dismissing the appeal on the grounds that the Appellant opted for the Direct Tax Vivad Se Vishwas Act, 2020, despite the Appellant not paying the required amount and Form-5 not being issued, rendering the Form-1 application void ab initio under Section 4(6)(b) of the said Act? (Question of law and fact) 2. Whether the Learned CIT(A) erred in dismissing the appeal without considering the adjournment request, thereby violating principles of natural justice? (Question of fact) 3. Whether the Learned CIT(A) erred in upholding the Assessing Officer's additions of Rs. 55,50,000/-? (Question of fact and law) 4. Whether the Learned CIT(A) erred in upholding the Assessing Officer's additions of Rs. 55,50,000/- without allowing a deduction for the cost of acquisition of Rs. 11,01,759/- for a property registered during the year? (Question of fact and law) 5. Whether the Learned CIT(A) erred in upholding the Assessing Officer's additions of Rs. 1,87,44,874/- to the book profit and computing tax under Section 115JC (Alternate Minimum Tax), which was inapplicable? (Question of law) 6. Whether the Learned CIT(A) erred in upholding the Assessing Officer's failure to grant credit for TDS under Section 194IA of Rs. 55,500/-? (Question of fact and law) 7. Whether the Learned CIT(A) erred in upholding the Assessing Officer's failure to grant credit for TDS under Section 194IA of Rs. 90,000/- in respect of sale proceeds included in total income? (Question of fact and law) Assessee's Contentions: The assessee argued that their Vivad Se Vishwas application was void ab initio as they did not pay the required amount and Form-5 was not issued, making Section 4(6)(b) of the Act applicable. They also contended that the CIT(A) violated natural justice by not considering their adjournment request. Furthermore, they challenged the additions made by the AO and the applicability of Section 115JC, as well as the denial of TDS credit. Revenue's Contentions: The judgment does not record any specific contentions made by the revenue.

Which sections of the Income-tax Act were involved?

Section 4,Section 4(6)(b),Section 5,Section 115JC,Section 194IA

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “D” BENCH, MUMBAI

Before: SHRI SAKTIJIT DEY, HONBLE & SHRI NARENDRA KUMAR BILLAIYA, HONBLE

For Appellant: Shri Devendra Jain, A/R

Hearing: 08/05/2025Pronounced: 08/05/2025

PER NARENDRA KUMAR BILLAIYA, AM: This appeal by the assessee is preferred against the order of the ld. CIT(A)/Addl./JCIT(A)-3, Kolkata [hereinafter “the ld. CIT(A)"] dated 01/01/2025 pertaining to AY 2014-15. 2. The grievance of the assessee reads as under:- “1. In the facts and circumstances of the case and in law, Learned Commissioner of Income Tax (Appeals) [hereinafter also referred to as 'the CIT(A)] has erred in dismissing the appeal citing the reason that the Appellant had opted to avail benefit of the Direct Tax Vivad Se Vishwas Act, 2020; hence the impugned pending appeal before the said CIT(A) stood infructuous -this was in utter disregards to the fact and law that because Appellant did not pay the amount as required by the said Act and Form-5 was never issued to the Appellant, the application in From-1 itself was void-ab-initio pursuant to provisions of section 4(6)(b) of the said Act which presumes that no declaration was ever made by the Appellant.

In the facts and circumstances of the case and in law, the Learned CIT(A), erred in dismissing the appeal without considering or reverting the adjournment request of the Appellant thereby grossly violating the principles of natural justice.

In the facts and circumstances of the case and in law, the Learned CIT(A), erred in upholding the action of the Ld. Assessing Officer of making additions of Rs.55,50,000/- disregarding the factual and legal matrix of the case.

Without prejudice to the above, in the facts and circumstances of the case and in law, the Learned CIT(A), erred in upholding the action of the La. Assessing Officer of making additions of Rs.55,50,000/- in respect of a property registered during the year without allowing the deduction in respect of the cost of acquisition amounting to Rs. 11,01,759/- of the said property.

Without prejudice to the above, in the facts and circumstances of the case and in law, the Learned CIT(A), erred in upholding the action of the Ld. Assessing Officer of making additions of Rs.1,87,44,874/- to the book profit and computing tax thereon pursuant to the provisions of section 115JC (Alternate Minimum Tax whereas the said provisions were inapplicable to the Appellant.

In the facts and circumstances of the case and in law, the Learned CIT(A), erred in upholding the action of the Ld. Assessing Officer in not granting credit for Tax Deducted at Source under section 194IA of Rs.55,500/; while determining the amount of demand (in the tax computation sheet).

In the facts and circumstances of the case and in law, the Learned CIT(A), erred in upholding the action of the Ld. Assessing Officer in not granting credit for Tax Deducted at Source under section 194IA of Rs.90,000/- in respect of the sale proceeds included in Total Income of the appellant.

The appellant craves leave to add, alter, delete or modify all or any of the above grounds of appeal. All the above grounds are without prejudice to each other.”

Briefly stated the facts of the case are that the assessee had opted to avail benefit of the Direct Tax Vivad Se Vishwas Act, 2020 and accordingly filed requisite forms and Form No. 3 was issued by the PCIT, Mumbai-

17.

Therefore, the ld. CIT(A) was of the firm belief that upon filing the declaration, any appeal pending before the ITAT or CIT(A), in respect of the disputed income shall be deemed to have been withdrawn from the date on which certificate under sub-Section (1) of Section 5 of the Direct Tax Vivad Se Vishwas Act, 2020, is issued by the designated authority.

However, the assessee though opted for Direct Tax Vivad Se Vishwas Act, 2020, but did not pay the disputed tax which makes sub- Section (6) to Section 4 of the Direct Tax Vivad Se Vishwas Act, 2020, applicable and the same reads as under:- “(6) The declaration under sub-section (I) shall be presumed never to have been made if, - (a) any material particular furnished in the declaration is found to be false at any stage; (b) the declarant violates any of the conditions referred to in this Act; (c) 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 claims which were withdrawn under section 4 and all the consequences under the Income-tax Act against the declarant shall be deemed to have been revived.

In light of the aforementioned Section, all the consequences under the Income-tax Act against the declarant shall be deemed to have been revived.

Therefore, in light of the above, the appeal is restored to the file of the ld. CIT(A) with a direction to decide the appeal on merits of the case after affording a reasonable and adequate opportunity of being heard to the assessee.

In the facts and circumstances of the case and in law, the Learned CIT(A), erred in upholding the action of the Ld. Assessing Officer of making additions of Rs.55,50,000/- - disregarding the factual and legal matrix of the case.

In the facts and circumstances of the case and in law, the Learned CIT(A), erred in upholding the action of the Ld. Assessing Officer in not granting credit for Tax Deducted at Source under section 194IA of Rs.90,000/- in respect of the sale proceeds included in Total Income of the appellant.

The appellant craves leave to add, alter, delete or modify all or any of the above grounds of appeal. All the above grounds are without prejudice to each other.”

17.

In light of the aforementioned Section, all the consequences under the Income-tax Act against the declarant shall be deemed to have been revived.

In the result, appeal of the assessee is allowed for statistical purposes. Order pronounced in the Court on 8th May, 2025 at Mumbai. (SAKTIJIT DEY) VICE-PRESIDENT (NARENDRA KUMAR BILLAIYA) ACCOUNTANT MEMBER आयकर अपीलीय अधिकरण INCOME TAX APPELLATE TRIBUNAL Section (6) to Section 4 of the Direct Tax Vivad Se Vishwas Act, 2020, applicable and the same reads as under:- “(6) The declaration under sub-section (I) shall be presumed never to have been made if, - (a) any material particular furnished in the declaration is found to be false at any stage; (b) the declarant violates any of the conditions referred to in this Act; (c) 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 claims which were withdrawn under section 4 and all the consequences under the Income-tax Act against the declarant shall be deemed to have been revived.

In light of the aforementioned Section, all the consequences under the Income-tax Act against the declarant shall be deemed to have been revived.

In the result, appeal of the assessee is allowed for statistical purposes. Order pronounced in the Court on 8th May, 2025 at Mumbai. (SAKTIJIT DEY) VICE-PRESIDENT *SC SPS (NARENDRA KUMAR BILLAIYA) ACCOUNTANT MEMBER आयकर अपीलीय अधिकरण INCOME TAX APPELLATE TRIBUNAL आदेश की प्रतिलिपि ग्रेषित/

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