Fresh Pet Private Limited Vs PCIT (Delhi High Court)
Mistake apparent pertaining to carry forward and set off of unabsorbed depreciation and business losses could be revised by filing Form 3 under VSV scheme
Conclusion: Once AO itself had accorded the facility of carry forward and set off of unabsorbed depreciation and business losses, the same could not have been denied to declarant. The failure of assessee to make the requisite disclosures in Schedule D would neither detract from the relief which had been accorded by AO nor change the factum of carry forward and set off as forming part of the assessment order.
Held: Assessee was principally seeking a revision of Form 3 and which had taken note of the fact that a set off/carry forward of losses and unabsorbed depreciation had not been claimed in Schedule D of the application which had been made by assessee for settlement under the VSV Act. It was the case of assessee that since the order of assessment had itself provisioned for the carry forward of unabsorbed depreciation as well as business loss, the same could have neither been ignored nor refused acknowledgment while drawing up the Form 3. It was asserted that the action of the respondents went against the very grain of the VSV Act and which was concerned with settlement of disputes pertaining to a tax liability and according closure thereto. Hence, assessee approached the High Court challenging an order negating its request for a rectification of the Form 3 which was issued under the Direct Tax Vivad Se Vishwas Act, 2020. It was held that it would be wholly unjust to construe the provisions of the VSV Act as contemplating the settlement amount exceeding the tax liability as computed in assessment or denying the declarant relief which already stood extended. This since the order of assessment to that extent would not even have formed subject matter of disputation. The definition of ―disputed tax liability” and ―tax arrears” clearly lend credence to the submission that the settlement would have to necessarily be confined to that part of the assessment which was adverse to the assessee and which might have formed subject matter of ongoing proceedings. Once AO itself had accorded the facility of carry forward and set off of unabsorbed depreciation and business losses, the same could not have been denied to the declarant. The failure of assessee to make the requisite disclosures in Schedule D would neither detract from the relief which had been accorded by AO nor change the factum of carry forward and set off as forming part of the assessment order. The grant of that facility appeared to have been noticed by the Designated Authority and it was perhaps this aspect which convinced it to record that it would be open to assessee to seek relief in that respect accordance with law. However, the Designated Authority clearly appeared to have lost sight of the fact that unless Form 3 were duly amended and rectified, the spectre of finality which stands statutorily conferred on that determination would have deprived assessee of asserting any claim in respect of carry forward and set off. Once it was conceded that those reliefs stood granted in the original order of assessment itself, the Designated Authority would have been justified in rectifying the mistake which was apparent from the record. The Designated Authority was directed to issue a Form 3 afresh bearing in mind the observations rendered hereinabove.
