The designated authority rejected my Form 1 saying there was no disputed tax because my own return was accepted, so my appeal was incompetent. Can it go into whether my appeal was maintainable?
No. The Delhi High Court held that eligibility under the Direct Tax Vivad se Vishwas Act, 2020 is not contingent on the merits of the maintainability of the appeal; all that matters is that an appeal in respect of disputed tax was pending before the CIT(A) or the Tribunal when the declaration was filed. The rejection was set aside and the authority directed to consider the declaration in accordance with the law as it stood on the date the declaration was filed.
Decided by the High Court (Vibhu Bakhru J and Swarana Kanta Sharma J (oral judgment per Vibhu Bakhru J)) on 2024-11-25, reported as Direct Tax Vivad se Vishwas Act, 2020; W.P.(C) 10733/2021 (Delhi High Court). It bears on section DTVSV 2020 of the Income Tax Act 1961, in Appeals and How Tax Law Is Read matters.
This closes off the department's most common substantive objection to a Form 1 — that the appeal behind it is bad. The Court refused to decide the underlying question, on which authority is genuinely split, of whether an assessee whose returned income is accepted can be a 'person aggrieved' under s.246A: the Delhi High Court's own Bharat General Reinsurance points one way, the Uttarakhand High Court's Deep Kukreti the other. The point of the decision is that the designated authority never reaches that question. Note the scope of the exclusions the Court relied on: s.9 of the 2020 Act, as reproduced in the judgment, keeps out a search assessment only where the disputed tax exceeds five crore rupees, and otherwise excludes prosecution cases, undisclosed foreign income or assets, exchange-of-information assessments, COFEPOSA detenus, persons prosecuted or convicted under specified special statutes, and persons notified under the Special Court Act 1992. If the case is not in that list, the Act applies.
Binding within that High Court's jurisdiction. Persuasive elsewhere.
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For AY 2009-10 the company returned nil income on 30 September 2009, treating the sale proceeds of rural agricultural land of Rs 18,50,79,348 as exempt both under the normal provisions and for book profit. During scrutiny it filed a revised return on 15 February 2011 offering Rs 2,09,69,491 as minimum alternate tax on that book profit, and the revised return was accepted by an assessment order dated 26 December 2011. Recovery notices under s.221(1) followed and the demand was paid in instalments between 29 October 2010 and 18 August 2014. A highly belated appeal to the CIT(A) was filed on 12 September 2018 against the assessment order of 26 December 2011, with a condonation application of 8 July 2019; the CIT(A) dismissed it on 5 August 2019. A further appeal to the Tribunal, ITA No.7390/Del/2019, was filed on 9 September 2019 and was pending when Forms 1 and 2 were filed on 18 December 2020 — and were rejected the same day on the ground that there was no disputed income, penalty or interest for AY 2009-10. The Tribunal later, on 9 February 2023, allowed the appeal, set aside the CIT(A)'s order and remanded the matter for decision on merits; the Revenue did not challenge that order.
The impugned communication of 18 December 2020 was set aside and the designated authority directed to consider the declaration and undertaking in accordance with the law applicable on the date they were filed, and the petition was disposed of in those terms (paras 27 and 28). The fact that an appeal was pending before the Tribunal on the date of the declaration itself establishes that there was 'disputed tax' (para 18); the Act draws no distinction as to the nature of the dispute pending, and eligibility does not depend on whether the appeal is maintainable (para 23). It is not for the Court, in the writ against a rejection, to decide whether the appeal before the CIT(A) was competent (para 23).
The Court set out s.2(1)(i) and (j), s.2(1)(o), s.3 and s.4(1) and (2) of the 2020 Act (paras 12 to 17). Section 4(2), which deems a pending appeal before the Tribunal or CIT(A) to be withdrawn from the date the s.5(1) certificate is issued, shows that the statutory scheme takes the pendency of the appeal as the operative fact (para 17). The contention that the appeal was non est because a person whose return is accepted cannot be aggrieved was met by noting the conflict between Bharat General Reinsurance (Delhi) and Deep Kukreti (Uttarakhand), and by holding that the question was one for the CIT(A) at a threshold stage and did not affect eligibility (paras 19 to 23). The Court adopted the Bombay High Court's reasoning in Govindrajulu Naidu that 'disputed tax' ascribes no qualification to the appeal beyond that it concern the Income-tax Act, that the scheme is an open one with only the specific exclusions in s.9, and that the Act does not purport to go into the grounds of appeal or inside the return (paras 25 and 26). Since the Revenue never suggested that any clause of s.9 applied, and the only reason given for rejection was that there was no dispute regarding tax, the rejection was unsustainable (para 26).
The eligibility to apply under the VSV Act, is not contingent on the merits of the maintainability of the appeal.
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Handle my notice → Ask a CA on WhatsAppNo. The Delhi High Court held that eligibility under the Direct Tax Vivad se Vishwas Act, 2020 is not contingent on the merits of the maintainability of the appeal; all that matters is that an appeal in respect of disputed tax was pending before the CIT(A) or the Tribunal when the declaration was filed. The rejection was set aside and the authority directed to consider the declaration in accordance with the law as it stood on the date the declaration was filed. This was decided by the High Court (Vibhu Bakhru J and Swarana Kanta Sharma J (oral judgment per Vibhu Bakhru J)) and bears on section DTVSV 2020 of the Income Tax Act 1961. It is reported as Direct Tax Vivad se Vishwas Act, 2020; W.P.(C) 10733/2021 (Delhi High Court). This closes off the department's most common substantive objection to a Form 1 — that the appeal behind it is bad. The Court refused to decide the underlying question, on which authority is genuinely split, of whether an assessee whose returned income is accepted can be a 'person aggrieved' under s.246A: the Delhi High Court's own Bharat General Reinsurance points one way, the Uttarakhand High Court's Deep Kukreti the other. The point of the decision is that the designated authority never reaches that question. Note the scope of the exclusions the Court relied on: s.9 of the 2020 Act, as reproduced in the judgment, keeps out a search assessment only where the disputed tax exceeds five crore rupees, and otherwise excludes prosecution cases, undisclosed foreign income or assets, exchange-of-information assessments, COFEPOSA detenus, persons prosecuted or convicted under specified special statutes, and persons notified under the Special Court Act 1992. If the case is not in that list, the Act applies. If it applies to you, the first step is this: Fix the date of the declaration and show that an appeal — before the CIT(A) or the Tribunal — was actually pending on that date; that is the whole enquiry.
For AY 2009-10 the company returned nil income on 30 September 2009, treating the sale proceeds of rural agricultural land of Rs 18,50,79,348 as exempt both under the normal provisions and for book profit. During scrutiny it filed a revised return on 15 February 2011 offering Rs 2,09,69,491 as minimum alternate tax on that book profit, and the revised return was accepted by an assessment order dated 26 December 2011. Recovery notices under s.221(1) followed and the demand was paid in instalments between 29 October 2010 and 18 August 2014. A highly belated appeal to the CIT(A) was filed on 12 September 2018 against the assessment order of 26 December 2011, with a condonation application of 8 July 2019; the CIT(A) dismissed it on 5 August 2019. A further appeal to the Tribunal, ITA No.7390/Del/2019, was filed on 9 September 2019 and was pending when Forms 1 and 2 were filed on 18 December 2020 — and were rejected the same day on the ground that there was no disputed income, penalty or interest for AY 2009-10. The Tribunal later, on 9 February 2023, allowed the appeal, set aside the CIT(A)'s order and remanded the matter for decision on merits; the Revenue did not challenge that order. The matter was decided on 2024-11-25 by the High Court (Vibhu Bakhru J and Swarana Kanta Sharma J (oral judgment per Vibhu Bakhru J)). On those facts the High Court held as follows. The impugned communication of 18 December 2020 was set aside and the designated authority directed to consider the declaration and undertaking in accordance with the law applicable on the date they were filed, and the petition was disposed of in those terms (paras 27 and 28). The fact that an appeal was pending before the Tribunal on the date of the declaration itself establishes that there was 'disputed tax' (para 18); the Act draws no distinction as to the nature of the dispute pending, and eligibility does not depend on whether the appeal is maintainable (para 23). It is not for the Court, in the writ against a rejection, to decide whether the appeal before the CIT(A) was competent (para 23).
The Court set out s.2(1)(i) and (j), s.2(1)(o), s.3 and s.4(1) and (2) of the 2020 Act (paras 12 to 17). Section 4(2), which deems a pending appeal before the Tribunal or CIT(A) to be withdrawn from the date the s.5(1) certificate is issued, shows that the statutory scheme takes the pendency of the appeal as the operative fact (para 17). The contention that the appeal was non est because a person whose return is accepted cannot be aggrieved was met by noting the conflict between Bharat General Reinsurance (Delhi) and Deep Kukreti (Uttarakhand), and by holding that the question was one for the CIT(A) at a threshold stage and did not affect eligibility (paras 19 to 23). The Court adopted the Bombay High Court's reasoning in Govindrajulu Naidu that 'disputed tax' ascribes no qualification to the appeal beyond that it concern the Income-tax Act, that the scheme is an open one with only the specific exclusions in s.9, and that the Act does not purport to go into the grounds of appeal or inside the return (paras 25 and 26). Since the Revenue never suggested that any clause of s.9 applied, and the only reason given for rejection was that there was no dispute regarding tax, the rejection was unsustainable (para 26). In the words reproduced by the source cited on this page: "The eligibility to apply under the VSV Act, is not contingent on the merits of the maintainability of the appeal." The decision followed or applied Govindrajulu Naidu v. Pr. Commissioner of Income Tax (Central-1), Mumbai, WP(L) 6903 of 2021 (Bombay), decided 29 April 2021 — relied upon and adopted; Commissioner of Income Tax v. Bharat General Reinsurance Co. Ltd. (1971) 81 ITR 303 — cited by the assessee, not decided upon; Deep Kukreti v. Commissioner of Income-Tax (2015) 371 ITR 257 (Uttarakhand) — cited by the Revenue, not decided upon.
It was decided by the High Court on 2024-11-25 and is reported as Direct Tax Vivad se Vishwas Act, 2020; W.P.(C) 10733/2021 (Delhi High Court). Binding within that High Court's jurisdiction. Persuasive elsewhere. A High Court decision binds the assessing officer, the Commissioner (Appeals) and the Income Tax Appellate Tribunal within that state, and is persuasive elsewhere. If your assessment is in a different jurisdiction, check whether your own High Court has taken the same view before relying on it. On section DTVSV 2020, the practical question is whether the facts of your own notice match the facts of this case closely enough for the same rule to apply.
It helps the taxpayer. The impugned communication of 18 December 2020 was set aside and the designated authority directed to consider the declaration and undertaking in accordance with the law applicable on the date they were filed, and the petition was disposed of in those terms (paras 27 and 28). The fact that an appeal was pending before the Tribunal on the date of the declaration itself establishes that there was 'disputed tax' (para 18); the Act draws no distinction as to the nature of the dispute pending, and eligibility does not depend on whether the appeal is maintainable (para 23). It is not for the Court, in the writ against a rejection, to decide whether the appeal before the CIT(A) was competent (para 23). It arises in Appeals and How Tax Law Is Read matters, on section DTVSV 2020 of the Income Tax Act 1961, and was decided by Vibhu Bakhru J and Swarana Kanta Sharma J (oral judgment per Vibhu Bakhru J). Before relying on it, read the source linked on this page and check whether it has since been distinguished, overruled or overtaken by an amendment to the Income Tax Act. In practice the steps that follow from it are these. Do not let the hearing drift into whether the appeal was competent; cite this decision and Govindrajulu Naidu to keep the designated authority out of the merits. Check the case against each clause of s.9 of the 2020 Act and put on record that it falls in none of them — the Court treated the Revenue's failure to plead s.9 as decisive. Where the rejection says there is 'no disputed tax', pin down which limb of the s.2(1)(j) definition the department says is unsatisfied, and answer it clause by clause. Ask, as this Court did, that the declaration be considered under the law as applicable on the date it was filed, so that later changes and later extensions do not defeat it.
Validity check could not be completed. Validity check could not be completed. No later treatment of this 2024 judgment was searched for or located. The proposition it adopts comes from the Bombay High Court in Govindrajulu Naidu, whose paras 18 to 28 were read independently this pass and which allowed the petition on the same reasoning; no decision taking a contrary view on the designated authority's power to test the maintainability of the appeal was found, but no citator check was run. No source could be cited for that finding. Checking whether an authority still stands matters as much as knowing what it held: a decision may be overruled on one point and survive on another, or the provision it interprets may have been amended since. Read the source and the editor's note on this page before relying on it in a reply to an Assessing Officer or in an appeal.
The judgment reproduces the Table to s.3 of the 2020 Act at para 14. Its row (c) shows twenty-five per cent of disputed interest, penalty or fee in the earlier column and thirty per cent in the later one. The row (c) figure of thirty per cent is now established: it is reproduced identically here, in the Allahabad High Court's judgment in Digvendra Pratap Singh v Union of India (Writ Tax No.1510 of 2022, 11 August 2023), in the Madras High Court's judgment in United Capital Partners India Pvt. Ltd. v Pr. CIT (W.P.No.25404 of 2021, 2 January 2025), and in the Statement of Objects and Reasons reproduced at para 19 of Boddu Ramesh, which gives 25 per cent and 30 per cent in terms. The single contrary rendering, on the indiankanoon page for Bhupendra Harilal Mehta, is an extraction artefact: on that same page row (a)'s first money column has the second column's words merged into it. The column HEADINGS reproduced in this judgment, however, are the Act as first enacted; s.5 of the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 substituted, and deemed to have substituted, "31st day of December, 2020 or such later date as may be notified" and "1st day of January, 2021 or such later date as may be notified" for "31st day of March, 2020" and "1st day of April, 2020". The text of s.9 set out at para 25 is a quotation from the Bombay High Court's judgment in Govindrajulu Naidu, not the Delhi High Court's own extraction; it has been corroborated against that judgment's own text, read this pass, where the same clause (a)(i) with its five crore rupees limit appears at para 23. The document runs to para 28, not beyond: para 26 holds the rejection unsustainable, para 27 sets the communication aside and gives the direction, and para 28 disposes of the petition. Paras 21, 22 and 25 reproduce other decisions and no locator has been taken from inside them — in particular the paragraphs numbered 18, 19 and 23 that appear inside para 25 are Govindrajulu Naidu's, not this Court's. This library shows the verification state of every entry openly. This entry has not yet been read in full by a chartered accountant. The summary reflects the sources listed on this page. Read the source before you rely on it in a reply to an Assessing Officer or in an appeal before the Commissioner (Appeals) or the Income Tax Appellate Tribunal.
The impugned communication of 18 December 2020 was set aside and the designated authority directed to consider the declaration and undertaking in accordance with the law applicable on the date they were filed, and the petition was disposed of in those terms (paras 27 and 28). The fact that an appeal was pending before the Tribunal on the date of the declaration itself establishes that there was 'disputed tax' (para 18); the Act draws no distinction as to the nature of the dispute pending, and eligibility does not depend on whether the appeal is maintainable (para 23). It is not for the Court, in the writ against a rejection, to decide whether the appeal before the CIT(A) was competent (para 23).
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My Vivad se Vishwas Form 1 was rejected because my CIT(A) appeal was filed late and the delay had still not been condoned on 31 January 2020. Was my appeal 'pending' for the 2020 scheme?
My Tribunal appeal was more than a year late and the delay was condoned only in February 2021, well after CBDT's 4 December 2020 circular. The designated authority says FAQ 59 therefore cannot help me. Is that right?
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I settled an earlier year under Vivad se Vishwas. The CIT(A) is now using that settlement to sustain a disallowance in a later year. Can he?