2023 (9) TMI 1047 - SCH - Income Tax

Direct Tax Vivad se Vishwas scheme - settlement in respect of tax arrear - ineligibility to file declaration - debar to petitioner from filing a declaration for settlement of tax arrear - As decided by HC 2021 (3) TMI 1089 - BOMBAY HIGH COURT no hesitation to hold that either on a literal interpretation or by adopting a purposive interpretation, the only exclusion visualized under the said provision is pendency of a prosecution in respect of tax arrear relatable to an assessment year as on the date of filing of declaration and not pendency of a prosecution in respect of an assessment year on any issue. The debarment must be in respect of the tax arrear as defined under section 2(1)(o) of the Vivad se Vishwas Act. To hold that an assessee would not be eligible to file a declaration because there is a pending prosecution for the assessment year in question on an issue unrelated to tax arrear would defeat the very purport and object of the Vivad se Vishwas Act HELD THAT - We are not inclined to interfere with the impugned judgment as the criminal prosecution relates to delayed payment of self-assessment tax and the application under the Direct Tax Vivad Se Vishwas Act, 2020. For short, Act relates to the additions made in the assessment order. Criminal prosecution was on a separate and different issue, and would have continued, even if the application under the Act was accepted. We are informed that the prosecution case has been dismissed. That may not be material and relevant in terms of the objective and purpose of the Act. Recording the aforesaid, the special leave petition is dismissed.

Summary

The Supreme Court dismissed the special leave petition as the criminal prosecution for delayed payment of self-assessment tax was separate from the application under the Direct Tax Vivad Se Vishwas Act, 2020, which related to additions in the assessment order. The prosecution case being dismissed was not relevant to the purpose of the Act.