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Facts
The assessee availed the benefit of the Direct Tax Vivad Se Vishwas Act, 2020 to settle tax arrears. Subsequently, the Ld. Principal Commissioner of Income-Tax initiated revision proceedings under Section 263 of the Income Tax Act for the same assessment year.
Held
The Tribunal held that once the assessee opts for the Vivad Se Vishwas Scheme and settles the dispute, the matters covered therein cannot be reopened under Section 263 of the Income Tax Act. The Gujarat High Court's decision in PCIT vs. Mrs. Swatiben Biharilal Parekh was relied upon.
Key Issues
Whether revision proceedings under Section 263 of the Income Tax Act can be initiated after the assessee has availed the benefit of the Direct Tax Vivad Se Vishwas Act, 2020 for the same assessment year.
Sections Cited
263, 5(3), 6, 8, 57(F)
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Income Tax Appellate Tribunal, “C” BENCH, AHMEDABAD
Before: SHRI SANJAY GARG & SHRI NARENDRA PRASAD SINHA
(िनधा�रण वष� / Assessment Year : 2017-18) बनाम/ Talha Agency PCIT-1 1 Talha Agency, Old Market Ahmedabad Vs. Yard Station Road, Modasa/Arvalli, Gujarat - 383315 �थायी लेखा सं./जीआइआर सं./PAN/GIR No. : AAKFT5021C (Appellant) .. (Respondent) अपीलाथ� ओर से /Appellant by : Shri Biren Shah & Shri Gulab Thakor, A.Rs. ��यथ� क� ओर से/Respondent by : Shri Rignesh Das, CIT. DR 03/09/2025 Date of Hearing Date of Pronouncement 27/11/2025 (आदेश)/ORDER Per Sanjay Garg, Judicial Member:
The present appeal has been preferred by the assessee against order passed by the Ld. Principal Commissioner of Income-Tax, PCIT, Ahmedabad-1 [hereinafter referred to as “Ld. PCIT”] dated 15.03.2022 under section 263 of the Income Tax Act, 1961 ("the Act" for short) pertaining to Assessment Year 2017-18.
The short issue involved in this appeal is as to whether the revision jurisdiction u/s.263 of the Act can be assumed by the Ld. 2 – Agency vs. PCIT] A.Y. 2017-18 PCIT after the assessee has availed the benefit under the Direct Tax Vivad Se Vishwas Act, 2020 and settled the matter after paying due taxes. Admittedly, in this case, the assessee has availed the benefit of Vivad Se Vishwas Scheme under the Direct Tax Vivad Se Vishwas Act, 2020. The Ld. PCIT, thereafter, has exercised revision jurisdiction on the same issue u/s.263 of the Act. The issue is no more res integra as the same is covered by the decision of Jurisdictional Gujarat High Court in the case of PCIT vs. Mrs. Swatiben Biharilal Parekh, reported in [2023] 156 taxmann.com 267 (Guj.), wherein the Hon’ble Jurisdictional High Court has held that opting Vivad Se Vishwas Scheme and finalizing thereof is nothing but closure of disputes in respect of tax arrears which cannot be subsequently reopened by issuing notice u/s.263 of the Act for revising assessment order. It is pertinent to mention here that Section 5(3) of the Direct Tax Vivad Se Vishwas Act, 2020 states as under:
“(3) Every order passed under sub-section (1), determining the amount payable under this Act, shall be conclusive as to the matters stated therein and no matter covered by such order shall be reopened in any other proceeding under the Income-tax Act or under any other law for the time being in force or under any agreement, whether for protection of investment or otherwise, entered into by India with any other country or territory outside India.”
Further, the Hon’ble Jurisdictional High Court in the case of PCIT vs. Mrs. Swatiben Biharilal Parekh (supra) has taken note of the relevant provision of the Direct Tax Vivad Se Vishwas Act, 2020 and held as under:
“5. ……………………… 3 – Agency vs. PCIT] A.Y. 2017-18 ……………………… 43. Section 6 of the Direct Tax Vivad Se Vishwas Act, 2020, makes it very clear that once there is a compliance with the timeliness specified under section (5), the designated authority shall not institute any proceedings in respect of an offence or aims or levy any penalty or charge any interest under the Income-tax in respect of the tax arrears.
Section 8 of the Direct Tax Vivad Se Vishwas Act, 2020, also makes it clear that save as otherwise expressly provided in sub- section(3) of section 5 or section 6, noting contained in this Act shall be construed as conferring any benefit, concession or immunity on the declarant in any proceedings other than those in relation to which the declaration has been made.
The intention of the parliament enacting the of the Direct Tax Vivad Se Vishwas Act, 2020, is to bring a closure of disputes in respect of tax arrears. Whether the petitioner had correctly or wrongly availed the benefit of section 57(F) of the Income-tax Act or not cannot be re-opened once again under section 263 of the Income- tax Act, 1961.
Once the petitioners had opted to settle the dispute under the Direct Tax Vivad Se Vishwas Act, 2020, the proceedings initiated under section 263 have to go. If on the other hand the respective petitioners had not filed Form 1 and 2 or not accepted with the issue of Form 3, the Impugned Notice seeking to re-open the assessment under section 263 of the Income-tax Act, 1961 could be justified."
In light of the facts and the decision of the Madras High Court, it was not open for the authorities to initiate proceedings under section 263 of the Act, especially when they were clearly so barred. We are also conscious of the fact that even if the appeal memo which is placed on record is seen, the matter in issue before the CIT (Appeals) which was sought to be brought to rest by opting for the benefit of the Scheme was in context of the same issue which the Revenue sought to invoke by issuing notice under section 263 of the Act.
The Tribunal therefore cannot be faulted for allowing the appeal of the assessee as it was not open for the authorities to initiate proceedings under section 263 of the Act, when they were barred.”
In view of this, the exercise of jurisdiction by the Ld. PCIT u/s.263 of the Act in this case is against the provision of Direct 4 – Agency vs. PCIT] A.Y. 2017-18 Tax Vivad Se Vishwas Act, 2020. Therefore, the impugned order passed by the Ld. PCIT u/s.263 of the Act is not sustainable in the eyes of law and the same is hereby quashed.
In the result, appeal filed by the assessee stands allowed.
This Order pronounced on 27/11/2025
Sd/- Sd/- (NARENDRA PRASAD SINHA) (SANJAY GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad; Dated 27/11/2025 S. K. SINHA True Copy आदेश क� �ितिल�प अ�े�षत/Copy of the Order forwarded to : अपीलाथ� / The Appellant 1. 2. ��यथ� / The Respondent. संबंिधत आयकर आयु� / Concerned CIT 3. 4. आयकर आयु�(अपील) / The CIT(A)- �वभागीय �ितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Ahmedabad 5. 6. गाड� फाईल / Guard file. आदेशानुसार/ BY ORDER,