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Income Tax Appellate Tribunal, RAIPUR BENCH, RAIPUR
Before: SHRI RAVISH SOOD & SHRI G D PADMAHSHALI
आदेश / ORDER
PER RAVISH SOOD, JM:
The present appeal filed by the assessee is directed against the order passed by the Pr. Commissioner of Income Tax, Raipur-1 (for short ‘Pr. CIT’) u/s.263 of the Income Tax Act, 1961 (for short ‘the Act’) dated 23.02.2022, which in turn arises from the order passed by the A.O. u/s.143(3) of the Act, dated 25.12.2019 for A.Y. 2017-18. Before us the assessee has assailed the impugned order on the following grounds of appeal:
“1. Ld. Pr. CIT erred in invoking the provisions of sec. 263 and in setting aside the assessment order for fresh enquiry. Order passed u/s 263 is unsustainable and is passed without properly appreciating the facts & evidences on record. The assessment order is neither erroneous nor prejudicial to the interest of Revenue.
2. Order passed u/s 263 is illegal inasmuch as same has been passed without appreciating the fact that appellant has already filed declaration under DTVSV, 2020 in respect of the issue raised by Ld. Pr. CIT. Provisions of sec. 263 could not have been invoked.
3. Without prejudice to above grounds, the revision order passed by ld. Pr. CIT is illegal and not sustainable inasmuch as it was passed without dealing with any of the objections raised by the appellant. It is a non speaking order. The revision order is liable to be annulled.
4. The appellant reserves the right to add, amend or alter any of the ground/s or appeal.”
Succinctly stated, the assessee had filed his return of income for A.Y.2017-18 on 02.11.2017, declaring an income of Rs.15,66,140/-.
3 Fakir Chand Agrawal Vs. Pr. CIT, Raipur- Assessment was, thereafter, framed by the A.O vide his order passed u/s.143(3) dated 25.12.2019, wherein, after making an addition of Rs.1,04,85,751/- towards bogus purchases the income of the assessee was assessed at Rs.1,21,83,767/-. After culmination of the assessment the Pr. CIT, Raipur-1 called for assessment records of the assessee. Observing, that the order passed by the A.O u/s.143(3), dated 25.12.2019 was erroneous in so far it was prejudicial to the interest of the revenue u/s. 263 of the Act, the Pr. CIT vide “Show Cause Notice” (SCN) dated 24.01.2022 and called upon the assessee to explain as to why the order passed by the A.O may not be revised.
In reply, it was, inter alia, stated by the assessee that as he had opted for Direct Tax Vivad Se Vishwas Act (DTVSV) and Form 5 had been issued to him, therefore, the case having been settled under DTVSV could not be re-examined in the garb of the proceedings u/s.263 of the Act. However, the Pr. CIT after referring to the aforesaid claim of the assessee proceeded with and vide his order passed u/s.263 of the Act dated 23.02.2022 set-aside the order passed by the A.O u/s.143(3) dated 25.12.2019. It was observed by the Pr. CIT that as the A.O ought to have made the addition of the bogus purchases of Rs.1,04,85,751/- as an unexplained expenditure incurred by the assessee u/s.69C of the Act and computed the consequential tax liability as per provisions of Section 4 Fakir Chand Agrawal Vs. Pr. CIT, Raipur- 115BBE of the Act, therefore, having failed to do so his order passed u/s.143(3) dated 25.12.2019 was erroneous in so far it was prejudicial to the interest of the revenue u/s.263 of the Act.
The assessee being aggrieved with the order passed by the Pr. CIT u/s.263 of the Act dated 23.02.2022 has carried the matter in appeal before us.
We have heard the ld. authorized representatives of both the parties, perused the orders of the lower authorities and the material available on record, as well as considered the judicial pronouncements that have been pressed into service by them to drive home their respective contentions.
At the very outset of hearing of the appeal, it was submitted by the Ld. Authorized Representative (for short ‘AR’) that as the assessee had opted for Direct Tax Vivad Se Vishwas Act and Form 5 was issued to him, Page 22 of APB, therefore, the Pr. CIT had grossly erred in law and facts of the case in disturbing such settled matter by initiating and passing an order u/s.263 of the Act dated 23.02.2022. It was averred by the Ld. AR that both initiation and passing of the order u/s.263 by the Pr. CIT was subsequent to the date on which Form 5, dated 13.10.2021 was issued to the assessee. Interestingly, it was submitted by the Ld. AR that the same Pr. CIT who had issued Form-5, had thereafter initiated and passed the 5 Fakir Chand Agrawal Vs. Pr. CIT, Raipur- order u/s.263 of the Act 23.02.2022. In sum and substance, it was the claim of the Ld. AR that as the assessee had opted for Direct Tax Vivad Se Vishwas Act and the issue was settled, therefore, the Pr. CIT was not vested with any jurisdiction to revise the order passed by the A.O u/s.143(3) dated 25.12.2019. In support of his aforesaid contention the Ld. AR had relied on the order of the ITAT, Bangalore in the case of Pavan Kankur Vs. Pr. CIT (2022) 66 CCH 260 (Bang) and judgment of the Hon’ble High Court of Madras in the case of Gopalkrishnan Rajkumar Vs. Pr. CIT (2022) 445 ITR 557 (Mad.).
Per contra, the Ld. Departmental Representative (for short ‘DR’) on being confronted with the peculiar facts of the case could not rebut the claim of the assessee.
We have given a thoughtful consideration to the issue before us, and are unable to fathom that now when the assessee had opted for the order passed by the A.O u/s.143(3) dated 25.12.2019 under the Direct Tax Vivad Se Vishwas Act and Form 5 dated 13.10.2021 was issued by the Pr. CIT-1, Raipur, then, on what basis proceedings u/s.263 of the Act were initiated by the Pr. CIT-1, Raipur vide SCN dated 24.01.2022, followed by an order dated 23.02.2022. In fact, we are surprised to find that not only the assessee had brought the fact that he had opted for Direct Tax Vivad Se Vishwas Act to the notice of the Pr. CIT in the course of revisional
6 Fakir Chand Agrawal Vs. Pr. CIT, Raipur- proceedings, but a reference of the same is also found available in the body of the order passed by the Pr. CIT u/s.263 dated 23.02.2022. As stated by the Ld. AR, and, rightly so, now when the assessee had opted for the impugned assessment order passed u/s.143(3) dated 25.12.2019 under the Direct Tax Vivad Se Vishwas Act, therefore, the Pr. CIT could not have thereafter stepped in and disturbed such settled matter by initiating proceedings u/s.263 of the Act. Our aforesaid view is fortified by the order of the order of the ITAT, Bangalore in the case of Pavan Kankur Vs. Pr. CIT (2022) 66 CCH 260 (Bang), wherein after drawing support from the judgment of the Hon’ble High Court of Madras in the case of Gopalkrishnan Rajkumar Vs. Pr. CIT (2022) 445 ITR 557 (Mad.), it was observed as under : “9. We have heard the rival contentions and perused the material on record. We will consider the issue of whether revision proceedings can be initiated when the assessee has opted for DTVSV. We notice that the Hon’ble Madras High Court while considering a similar issue in the case of Gopalakrishnan Rajkumar (supra) has held that – “39. The question therefore that arises for consideration is whether the impugned proceedings initiated after the petitioners opted to settle the dispute under the Direct Tax Vivad Se Vishwas Act, 2020 are sustainable or not? 40. The expression disputed tax has been denied in Section 27 of the Direct Tax Vivad Se Vishwas Act, 2020 reads as under: (j) “disputed tax”, in relation to an assessment year or financial year, as the case may be, means the income-tax, including surcharge and cess (hereafter in this clause referred to as the amount of tax) payable by the appellant under the provisions of the Income-tax Act, 1961, as computed hereunder:— (A) in a case where any appeal, writ petition or special leave petition is pending before the appellate forum as on the specified date, the amount of 7 Fakir Chand Agrawal Vs. Pr. CIT, Raipur- tax that is payable by the appellant if such appeal or writ petition or special leave petition was to be decided against him; (B) in a case where an order in an appeal or in writ petition has been passed by the appellate forum on or before the specified date, and the time for filing appeal or special leave petition against such order has not expired as on that date, the amount of tax payable by the appellant after giving effect to the order so passed; (c) in a case where the order has been passed by the Assessing Officer on or before the specified date, and the time for filing appeal against such order has not expired as on that date, the amount of tax payable by the appellant in accordance with such order; (D) in a case where objection filed by the appellant is pending before the Dispute Resolution Panel under section 144C of the Income-tax Act as on the specified date, the amount of tax payable by the appellant if the Dispute Resolution Panel was to confirm the variation proposed in the draft order; (E) in a case where Dispute Resolution Panel has issued any direction under sub-section (5) of section 144C of the Income-tax Act and the Assessing Officer has not passed the order under sub-section (13) of that section on or before the specified date, the amount of tax payable by the appellant as per the assessment order to be passed by the Assessing Officer under subsection (13) thereof; (F) in a case where an application for revision under section 264 of the Income-tax Act is pending as on the specified date, the amount of tax payable by the appellant if such application for revision was not to be accepted: Provided that in a case where Commissioner (Appeals) has issued notice of enhancement under section 251 of the Income-tax Act on or before the specified date, the disputed tax shall be increased by the amount of tax pertaining to issues for which notice of enhancement has been issued: Provided further that in a case where the dispute in relation to an assessment year relates to reduction of tax credit under section 115JAA or section 115D of the Income-tax Act or any loss or depreciation computed thereunder, the appellant shall have an option either to include the amount of tax related to such tax credit or loss or depreciation in the amount of disputed tax, or to carry forward the reduced tax credit or loss or depreciation, in such manner as may be prescribed. (k) “Income-tax Act” means the Income-tax Act, 1961; (a) “last date” means such date as may be notified by the Central Government in the Official Gazette; (b) “prescribed” means prescribed by rules made under this Act;
8 Fakir Chand Agrawal Vs. Pr. CIT, Raipur- (c) “specified date” means the 31st day of January, 2020; (d) “tax arrear” means,— (i) the aggregate amount of disputed tax, interest chargeable or charged on such disputed tax, and penalty leviable or levied on such disputed tax; or (ii) disputed interest; or (iii) disputed penalty; or (iv) disputed fee, as determined under the provisions of the Income-tax Act.
As per section 3 of the the Direct Tax Vivad Se Vishwas Act, 2020, notwithstanding anything contained in the Income-tax Act or any other law for the time in force the amount payable by a declarant shall be as specified in the table to the said section.
As per section 4(6) of the Direct Tax Vivad Se Vishwas Act, 2020, the declarations filed under Section(1) shall be presumed to have never 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; (e) 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.”
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 5 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.
9 Fakir Chand Agrawal Vs. Pr. CIT, Raipur-
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.
The Finance Minister in her speech on 1-2-2020 announced the Direct Tax Vivad Se Vishwas Scheme to bring down the litigation. The Government intended to reduce the litigation, so that the taxpayers can buy peace with the department. The aforesaid scheme was to be implemented on 30-6-2020. 48. The taxpayers whose appeals were pending at any level were entitled to avail benefit of the scheme. Therefore, there is no justification in proceeding further with the impugned proceedings initiated by the first respondent under section 263 of the Income-tax Act, 1961. 49. Therefore, I am inclined to allow these writ petitions. Accordingly these writ petitions are allowed. No costs. Consequently, connected miscellaneous petitions are closed.” 10. We notice that in assessee’s case the issue of cash deposits during the demonetization period have been considered by the AO in original assessment proceedings under Section 143(3) of the Act and the assessee has opted for DTVSV scheme for the additions made in this regard. Section 8 of DTVSV Act as quoted by the PCIT, clearly mentions that the immunity is not available for any proceedings other than those in relation to which the declaration has been made. In the given case however the PCIT has initiated the revision proceedings u/s.263 on the same issue for which the assessee has already opted for DTVSV. It is also noticed the assessee has filed the necessary forms under the DTVSV scheme which have been accepted and therefore in our considered view the decision of the Hon’ble Madras High Court is clearly applicable to the assessee’s case. Accordingly we hold that the PCIT is not justified in initiating the impugned proceedings under Section 263 of the Act when the assessee has opted to settle the dispute under DTVSV scheme. We therefore quash the order of PCIT and allow the appeal in favor of the assessee.”
As the facts involved in the present case remains the same, i.e. the Pr. CIT had initiated revisional proceedings u/s.263 of the Act after certificate in Form 5 under the Direct Tax Vivad Se Vishwas Act was issued to the assessee by the appropriate authority, therefore, respectfully following it
10 Fakir Chand Agrawal Vs. Pr. CIT, Raipur- we quash the order passed by the Pr. CIT u/s.263 of the Act dated 23.02.2022.
In the result, appeal of the assessee is allowed in terms of our aforesaid observations. No order as to costs. Order pronounced under rule 34(4) of the Appellate Tribunal Rules, 1963, by placing the details on the notice board.