PCIT Vs Govindachary (Karnataka High Court)
In a significant ruling clarifying the scope of the Direct Tax Vivad Se Vishwas Act, 2020 (DTVSV Act), the Karnataka High Court dismissed an appeal filed by the Principal Commissioner of Income Tax (PCIT) against the assessee, Govindachary. The central legal question before the Division Bench was whether the benevolent tax resolution scheme covered interest charged under various sections of the Income-tax Act, 1961, specifically Sections 234A, 234B, and 234C, which are typically levied on delayed or defaulted tax payments.
The High Court upheld the order of a Single Judge, which had directed the Revenue to issue a fresh certificate in Form-3, thereby confirming the inclusion of the disputed interest amount within the scheme.
The Origin of the Dispute
The conflict arose after the assessee, Govindachary, filed a declaration under the DTVSV Act to resolve tax disputes. In his application, the assessee included interest components calculated under Sections 234A, 234B, and 234C of the Income-tax Act, 1961.
The Revenue (appellant) rejected the declaration to the extent of this statutory interest, arguing that the DTVSV Act only covered the disputed tax amount itself and did not extend to interest levied under these specific sections. According to the Revenue’s Senior Standing Counsel, the Single Judge had erred by directing the issuance of a fresh Form-3 certificate without adequately examining the limited scope of the disputes intended to be covered by the DTVSV Act.
