2024 (3) TMI 32 - AT - Income Tax

Validity of Revision u/s 263 - assessment order as already been settled under VSVS - HELD THAT - As decided in Swatiben Biharilal Parekh 2023 (10) TMI 42 - GUJARAT HIGH COURT as find that the Hon'ble Court has been pleased to observe 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. Hence, we hold that the order passed u/s 263 on the assessment order which has already been settled under VSVS is invalid and the same is liable to be dismissed and quashed accordingly.

Summary

Issues:
The appeal challenges the order of the ld. Pr.CIT, Faridabad dated 24.03.2022 for the assessment year 2017-18, questioning the jurisdiction u/s 263 of the Income Tax Act, 1961 and the validity of the assessment order.

Jurisdiction u/s 263:
The assessee contended that the assessment order had been resolved under the Vivad Se Vishwas Scheme, 2020 (VSVS) and closed on 25.11.2021 with the issuance of Form-5 by PCIT. Citing the decision of the Hon'ble Gujarat High Court in a similar case, it was argued that opting for the VSV Scheme and finalizing it leads to the closure of disputes regarding tax arrears, preventing the reassessment under section 263. The Tribunal's decision in a related case was upheld by the High Court, emphasizing the finality of the benefit of the Vivad Scheme. The assessee's counsel maintained that the facts of the present case align with the principles established in previous judgments, as Form 5 had been received, and the dispute had been settled.

Conclusion:
Ultimately, the Tribunal concurred with the assessee's arguments, declaring the exercise of jurisdiction under section 263 by the ld. PCIT as invalid. Consequently, the order passed under section 263 on the already settled assessment under VSVS was deemed invalid and set aside, leading to the allowance of the appeal filed by the assessee.