Case Law Details
PCIT Vs Swatiben Biharilal Parekh (Gujarat High Court)
Revision u/s 263 – settlement of dispute under the Direct Tax Vivad Se Vishwas Act – Whether opting the VSV Scheme and finalizing thereof is nothing but the closure of disputes in respect of tax arrears which cannot be subsequently reopened by issuing notice u/s 263 of the Act for revising the assessment order?
Introduction: The Gujarat High Court recently delivered a significant judgment in the case of “PCIT Vs Swatiben Biharilal Parekh.” This case revolves around the application of the Direct Tax Vivad Se Vishwas (VSV) Scheme and the authority’s power to revise an assessment order under Section 263 of the Income Tax Act. Let’s delve into the facts, analysis, and conclusions of this case.
Facts: The case involves an assessment completed under Section 143(3) read with Section 147 of the Income Tax Act, 1961, for the assessment year 2012-13. The assessing officer had added Rs. 11,32,448 to the total income of the assessee, attributing it to the estimation of profit at 8% of transactions of shares carried out during the year. The Principal Commissioner of Income Tax (PCIT) later observed that the entire share transaction of Rs. 1,41,55,592 remained unexplained. Additionally, the total transaction value exceeded the threshold limit of Rs. 60 lakhs as prescribed under Section 44AD of the Act.
The PCIT found that the failure to apply Section 68 had rendered the assessment order erroneous and prejudicial to the interest of revenue. Consequently, on January 31, 2022, the PCIT passed an order under Section 263, canceling the assessment and directing a fresh assessment with necessary inquiry and verification.
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