Vasundhara Builders And Developers Vs PCIT (Gujarat High Court)
The Gujarat High Court considered writ petitions challenging the rejection of declarations filed under the Direct Tax Vivad se Vishwas Scheme, 2024 for Assessment Years 2015-16 and 2016-17. The lead matter concerned the rejection of the petitioner’s declaration dated 31.12.2024 by the tax authorities on 16.05.2025 under Section 96 of the Scheme.
The dispute originated from a search conducted under Section 132 of the Income Tax Act, 1961, and a simultaneous survey under Section 133A at the residential and business premises of Sadhani Brothers. During these actions, the authorities alleged that the petitioner had benefited from accommodation entries based on incriminating material recovered during the search and survey. Consequently, proceedings were initiated against the petitioner under Section 153C of the Act.
The petitioner objected to the proceedings under Section 153C. By an order dated 24.12.2019, the department dropped those proceedings. Thereafter, the department reopened the assessment for AY 2015-16 under Section 147 of the Act. The petitioner challenged the reopening, but the objections were rejected on 24.12.2021. An appeal against the assessment order dated 24.02.2022 was filed before the first appellate authority on 23.03.2022 and remained pending.
During the pendency of the appeal, the Central Government introduced the Direct Tax Vivad se Vishwas Scheme, 2024 through the Finance (No. 2) Act, 2024 with the objective of reducing pending income tax litigation by allowing eligible taxpayers to settle disputes. The petitioner filed Form-1 on 31.12.2024 to avail the Scheme. However, the declaration was rejected on 16.05.2025 under Section 96(a)(i) of the Scheme on the ground that the case was connected with search proceedings under Section 132 of the Act.
