Shetkari Shikshan Prasarak Mandal Vs DCIT (ITAT Pune)
Conclusion: An additional demand of ₹1,13,05,449 raised through a rectification order under Section 154 was declared as invalid as VSV Scheme’s provisions under Sections 4 and 5 confer finality to the determination of the amount payable and rectification order was passed after the full and final settlement under the Vivad Se Vishwas (VSV) Scheme, 2020.
Held: Assessee-trust registered under Sections 12A and 80G had filed its return of income for Assessment Year (AY) 2017-18 declaring nil income. The return was processed under Section 143(1), and the case was selected for scrutiny under CASS. AO completed the assessment by making an ad hoc addition of Rs. 6,29,38,630 as anonymous donations under Section 115BBC, due to the trust’s inability to provide complete donor details. Assessee opted for the Vivad Se Vishwas Scheme, 2020, to settle the dispute. Assessee filed Form No. 1 and Form No. 2 and the designated authority issued Form No. 3, determining the payable amount as Rs. 1,94,48,037, which assessee paid on the same day and intimated via Form No. 4. The designated authority issued Form No. 5 confirming full and final settlement. However, AO issued a notice under Section 154 for rectification of the original assessment order, followed by a rectification order by raising an additional demand of Rs. 1,13,05,449. Assessee challenged this before CIT(A). CIT(A) dismissed the appeal citing a Delhi ITAT ruling that allowed rectification post-VSV Scheme settlement. Aggrieved by CIT(A)’s order, assessee filed an appeal before the ITAT. Assessee argued that once the VSV settlement was finalized with payment and issuance of Form No. 5, no further rectification under Section 154 was permissible, as the settlement was conclusive under the Direct Tax Vivad Se Vishwas (DTVSV) Act. It was held that VSV Scheme’s provisions under Sections 4 and 5 confer finality to the determination of the amount payable. Subsequent rectification could not be possible under the Income Tax Act unless the declaration contained false particulars or suppressed material facts, which was not the case here. It noted that the rectification order was issued after the assessee complied with all VSV requirements, rendering it invalid. Tribunal set aside the CIT(A)’s order and directed AO to cancel the additional demand raised through the Section 154 rectification order.
