Liability Determined Under DTVSV Act Can’t Be Revised by Any Income-Tax Authority | HC

Case Details: Satish Kumar Dhingra vs. Deputy Commissioner of Income-tax - [2024] 166 taxmann.com 290 (Delhi)

Judiciary and Counsel Details

• Yashwant Varma & Ravinder Dudeja, JJ.
• Nischay Kantoor, Ved Jain & Ms Soniya Dodeja, Advs. for the Petitioner.
• Vipul Agrawal, SSC for the Respondent.

Facts of the Case

The petitioner had filed its return of income for the relevant assessment year. The Assessing Officer (AO) had passed a final assessment order under section 143(3), making additions to the returned income of the petitioner, and the total income was assessed.

On appeal, the CIT(A) upheld the additions made by the AO. Meanwhile, the petitioner obtained a settlement of all disputes about demands emanating from the Income Tax Act, 1961, by an application made under the Direct Tax Vivad Se Vishwas Act, 2020 (DTVSV Act). Pursuant to the declarations which were made, Form 5 came to be issued, and the total liability was determined and conferred finality in terms as contemplated under the provisions of the DTVSV Act.

Later, DCIT sought to invoke the power conferred by section 154 to revisit a computation of liability on the ground that the short tax and interest were charged in the computation sheet inadvertently, which resulted in the charging of short gross tax liability.

Accordingly, the assessee questioned the action for rectification and filed a writ petition before the Delhi High Court.

High Court Held

The High Court held that as per the scheme of the DTVSV Act, it is found that an applicant desirous of settlement is required to file a declaration carrying requisite particulars in terms of section 4. Section 5 prescribes the time and manner of payment of the amount which may be determined by the Designated Authority.

The Designated Authority, upon receipt of a declaration made and referable to section 4, is obliged to determine the amount payable by the declarant following the provisions of the DTVSV Act. The Designated Authority is required to grant a certificate that would encapsulate particulars of the tax arrears and the amount payable upon such determination. In terms of section 5(2), the declarant is thereafter statutorily placed under an obligation to pay the amount as determined within 15 days of the receipt of the certificate and duly intimate the Designated Authority of compliance.

On a conjoint reading of section 4(6) alongside section 5(3), it was found that the determination as carried out by the Designated Authority is clearly rendered finality and cannot possibly be reopened or revised by any authority under the Income Tax Act by taking recourse to a power which may otherwise be available to be exercised.

The only contingency where a determination made may be liable to be revisited or recalled would be where it is subsequently found that the application made by the declarant is found to suffer from an incorrect declaration or the suppression of a material fact. Absent the above, the declaration and the determination are conferred finality under the DTVSV Act. The closure which comes to be accorded to the dispute thus is intended to operate upon both sides, namely, the assessee and the Revenue. This would flow from the special legislative objectives underlying the DTVSV Act and its avowed intent of providing closure to all tax disputes.

In the given case, it was not that the petitioner had failed to disclose with respect to any material particular or any disclosure so made subsequently being found to be false. Accordingly, the writ petition was allowed, and the rectification notice, rectification order issued under section 154 and notice of demand was quashed.