Case Law Details
Bhupendra Harilal Mehta Vs Principal Commissioner of Income Tax (Bombay High Court)
Conclusion: Direct Tax Vivad Se Vishwas (DTVSV) Act, 2020 was a beneficial legislation and department could not deny the benefit if assesee was eligible for the same. Thus, department had to pass a fresh order in Form No.3 determining tax payable by assessee as a non-search case in accordance with the DTVSV Act read with Rule 4 of the DTVSV Rules, as per Circular no. 4/2021 dated 23rd March, 2021.
Held: Assessee filed declaration in Form No.1 under Section 4(1) of the DTVSV Act read with Rule 3(1) of the DTVSV Rules on 16th December 2020. The disputed income was declared to be Rs.5,98,90,960/- and the disputed tax thereon as Rs.2,02,69,581/-. Assessee submitted that the gross amount payable by it was 100% of the disputed tax i.e. Rs.2,02,69,581/- out of which a sum of Rs.69,31,892/- was declared to have been paid and the balance of Rs.1,33,37,689/- was declared to be payable by assessee. Respondent being the Designated Authority, passed an order in Form No.3 under Section 5(1) of the DTVSV Act read with Rule 4 of the DTVSV Rules, determining the tax payable by assessee to be Rs.2,57,67,714/- being 125% of the disputed tax as against Rs.2,02,69,581/- being 100% of the disputed tax declared by assessee. It was held that admittedly, no search had been initiated in the case of assessee. Assessment order suggested that the case of assessee was selected for scrutiny under “CASS” selection and notices under the Income Tax Act were issued to assessee not pursuant to any search under section 132 or requisition under section 132A. Assessment referred only to section 143(3) and was not read with any provision of the search and seizure contained in Chapter XIV-B of the Income Tax Act where the special procedure for assessment of search case was prescribed. Nowhere in the statements recorded, referred to in the assessment order was there any allegation that assessee was one of the parties that had booked any artificial gains. There was no allegation that any incriminating material belonging to assessee was obtained in the course of the search. The assessment therefore did not appear to be on the basis of search initiated under Section 132, or requisitions made under Section 132A. It was difficult to agree with the submissions by Revenue that the assessment order was on the basis of search. Thus, the order was set aside and the Respondent was directed to pass a fresh order in Form No.3 determining tax payable by assessee as a non-search case in accordance with the DTVSV Act read with Rule 4 of the DTVSV Rules, as per Circular no. 4/2021 within a period of two weeks from the date of receipt of this order.
FULL TEXT OF THE JUDGMENT/ORDER OF BOMBAY HIGH COURT
1. Petitioner is stated to be an individual, his income being profits from a partnership firm, income from house property, interest, dividend and income from dealing in shares and derivatives.
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