Case Law Details
Sadruddin Tejani Vs ITO (Bombay High Court)
The basic facts set out above are not in dispute. Without getting into the merits of the demands by the Revenue or the Application for Revision under Section 264 of the Income Tax Act by the Petitioner, it would be relevant to note that, it is not in dispute that Petitioner had filed application under Section 264 of the Income Tax Act for adjustment/credit of Rs.12,43,000/-paid earlier in respect of the tax demands for Assessment Years 1988-89 to 1998-99 as according to him, this amount had been adjusted only against the demand for the A.Y 1987-88. While this application was pending, the Direct Tax Vivad Se Vishwas Act, 2020 came to be enacted followed by Direct Tax Vivad Se Vishwas Rules, 2020.
Petitioner filed applications under the DTVSV Act and Rules vide declarations in Form-1 dated 18th November, 2020 and waiver undertakings in Form-2 for each of the 11 years for the period 1988-89 to 1998-99 to avail of beneficial tax payments to end the litigation with the Revenue-Authorities. Pursuant to the filing of these applications, on 3rd December, 2020, Respondent No.1 called upon the Petitioner to submit working of disputed tax in relation to undisputed income for A.Y 1987-88 to 1998-99, stating that, Petitioner had mentioned disputed tax in the Form-1 despite the disputed income shown as ‘Nil’ in the 154 proceedings, tax having been calculated correctly for Assessment Years 1987 to 1998 and there being no dispute in income tax calculation and despite that, the Petitioner had calculated disputed tax and filed the declarations under the DTVSV Act. The main purpose of the application under section 264 of the Income Tax Act being only to considerably reduce the interest under Sections 234-B and 220(2) of the Income Tax Act by seeking to adjust the credit of regular tax paid challans for Assessment Year 1987-88 of Rs.12,43,000/- to various years i.e. to Assessment Years 1988-89 to 1998-99 even though Petitioner would be liable to pay a total demand of Rs.88,90,180/- including a large interest component if the revision application under section 264 was to be rejected.
The issue really is whether Petitioner satisfies the definition of‘disputed tax’ as contained in the DTVSV Act and Rules so as to be considered to have filed a valid declaration in Form-1 and waiver undertaking in Form-2. Going by the above submission and the definition of disputed tax as contained in section 2(1)(j)(F) of the DTVSV Act as contended by the Petitioner, it appears from the facts that the Petitioner would fall within the said definition. We find merit in the submissions made on behalf of the Petitioner.
It therefore emerges that the DTVSV Act has been enacted to address the urgent need to provide for resolution of pending tax isputes where a huge amount of disputed tax arrears of over Rs.9.32 lakh crores is locked-up. The DTVSV Act is aimed not only to benefit the Government by generating timely revenue but also to benefit the taxpayers by providing them peace of mind, certainty and saving time and resources rather than spending the same otherwise, enabling the taxpayers to be able to deploy the time, energy and resources saved, by opting for such dispute resolution, towards their business activities. The Act confers benefit on the tax payers who can put an end to tax litigation by paying specified percentage of tax and obtain immunity from penalty and prosecution and waiver of interest. In the context of the issue at hand, it would be pertinent to refer to the preamble to the DTVSV Act.
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