Case Law Details
Rolls Royce Industrial Power (India) Limited Vs CIT (IT) (Delhi High Court)
Introduction: The Delhi High Court recently addressed a significant legal matter in the case of Rolls Royce Industrial Power (India) Limited versus the Central Board of Direct Taxes (CBDT) under the Direct Tax Vivad Se Vishwas Act, 2020. The core of the dispute revolves around the challenge to Form 3 issued under the said Act.
Nature of Challenge: The case involves a challenge to Form 3, which was issued under the Direct Tax Vivad Se Vishwas Act, 2020. This Act aimed to provide taxpayers with a means to settle pending tax disputes by offering certain concessions.
Contention of the Petitioner: The petitioner, represented by Mr. Kamal Sawhney, contended that the impugned Form 3 in question bore the date 15.04.2021. It is essential to note that the date of this form holds significance, as it might impact the tax liabilities and concessions available to the petitioner.
Response of the Revenue: Mr. Sunil Agarwal, the learned senior standing counsel representing the respondent/revenue, conveyed that the respondent’s stance was that the forms issued to the petitioner needed to be reworked. This suggested that the original forms might not accurately align with the contentions made in the counter-affidavit.
Fresh Forms Consideration: Mr. Agarwal further argued that it might be necessary to issue fresh forms to rectify the discrepancies. This suggestion was supported by examples from the counter-affidavit, highlighting areas where errors in tax calculations were acknowledged and required modification.
Deliberation and Decision: In light of these arguments and the mutual agreement of counsel, the High Court decided to set aside the impugned forms issued to the petitioner. However, the court granted the respondents/revenue the liberty to rework the calculations based on the counter-affidavit’s contentions and subsequently issue fresh forms as needed. The petitioner also retained the liberty to challenge these fresh forms in accordance with the law if still aggrieved.
Release of Deposited Amount: During the pendency of the writ petitions, the court had previously issued an interim direction requiring the petitioner to deposit a cumulative amount of Rs.7,33,15,591/- with the designated authority. In response, Mr. Kamal Sawhney informed the court that this amount had been deposited. As a result, the court ordered the release of this amount to the petitioner within the next six weeks.
Conclusion: The case of Rolls Royce Industrial Power (India) Limited versus CIT (IT) before the Delhi High Court highlights the intricacies of tax law and the practical challenges faced by both taxpayers and revenue authorities in resolving disputes. The court’s decision to set aside the impugned forms, coupled with the option for fresh forms, underscores the significance of accurate and aligned tax calculations in the resolution of tax disputes. The release of the deposited amount brings a sense of finality to this chapter of the case, but the petitioner retains the right to pursue further legal remedies if necessary. This case serves as a reminder of the importance of clarity and precision in tax-related matters.
FULL TEXT OF THE JUDGMENT/ORDER OF DELHI HIGH COURT
1. We have heard learned counsel for the parties briefly.
2. It is noticed that in these writ petitions, challenge has been laid to Form 3 issued under the Direct Tax Vivad Se Vishwas Act, 2020 [in short “2020 Act”].
3. Mr Kamal Sawhney, learned counsel who appears on behalf of the petitioner says, that the impugned forms i.e., Form 3 in the above-captioned matters bear the same date, i.e., 15.04.2021.
4. Mr Sunil Agarwal, learned senior standing counsel who appears on behalf of the respondent/revenue, says that the stand taken by the respondent/revenue is that the said forms issued to the petitioner would have to be reworked, to align them with the assertions made in the counter-affidavit.
5. It is Mr Agarwal’s contention that, perhaps, fresh forms will have to be issued.
6. To make this point good, by way of illustration, our attention has been drawn to following assertions made in the counter-affidavit filed in writ petition WP(C) 5686/2021:
“To the extent of not granting set-off of Brought Forward Unabsorbed Business Losses and Brought Forward unabsorbed Depreciation of prior AYs computed on net income basis against the income of impugned AYs assessable on net income basis, the error committed by the Respondent is accepted and corresponding tax calculations will be modified. However, the remaining assertions of Petitioner are denied as factually incorrect and contrary to the express provisions of DTVSV Act and DTVSV Rules”.
7. Accordingly, as agreed by counsel, the impugned forms issued to the petitioner are set aside.
8. Liberty is however, given to the respondents/revenue to rework the calculations on the basis of stand taken in the counter-affidavit and thereafter, issue fresh forms, as deemed fit. After fresh forms are issued, if still aggrieved, the petitioner will have liberty to assail the same in accordance with the law.
9. Writ petitions and pending applications are disposed of in the aforesaid terms.
10. We may also note that during the pendency of writ petitions, we had issued an interim direction requiring the petitioner to deposit a cumulative amount of Rs.7,33,15,591/- with the designated authority.
11. Mr Kamal Sawhney says that this amount was deposited.
12. Given the aforesaid position, the said amount will be released to the petitioner within the next six (6) weeks.
13. Parties will act based on the digitally signed copy of the order.
