2024 (4) TMI 530 - HC - Income Tax

Rejection of DTVsV application - Scope of the DTVSV scheme - Requirement to settle all or part of the pending appeals - revenue has rejected the Forms filed by the petitioner/assessee on the ground that the petitioner/assessee sought to settle only one of the matters pending adjudication - Can an applicant, under the VSV Act, choose to settle one or more of the appeals, while continuing to contest others? HELD THAT - As decided in MUFG Bank Ltd 2022 (11) TMI 1304 - DELHI HIGH COURT after examining the provisions of the VSV Act, has, inter alia, concluded that an assessee has the leeway to settle any one appeal under the VSV Act and is not required to settle all the pending appeals filed by the respondents/revenue. The coordinate Bench has categorically held that the unit of settlement under the VSV Act is not an assessment year but any appeal, writ petition or an SLP . In this regard, the coordinate bench has referred, inter alia, to the provisions of Section 2(1)(j) read with Section 2(1)(a) of the VSV Act. Thus revenue, cannot but accept that the issue raised in the present petition is covered by the decision of the coordinate Bench. Accordingly, the writ petition is allowed. The order rejecting the subject Forms and the communication are set aside.

Summary

Issues Involved:
The judgment concerns the rejection of declaration made under Form 1 and undertaking made under Form 2 of The Direct Tax Vivad Se Vishwas Rules, 2020 for Assessment Year 2010-11.

Details of the Judgment:

Issue 1: Rejection of Forms under VSV Act
The petitioner sought to challenge the rejection of Forms under the Direct Tax Vivad Se Vishwas Act, 2020. The respondent rejected the Forms on the basis that the petitioner sought to settle only one matter pending adjudication, which was not permissible under the Act. The rejection communication cited a circular and stated that settling only one appeal without considering all appeals was not allowed.

Issue 2: Background of Assessment
The petitioner filed the return of income for A.Y. 2010-11, which was selected for scrutiny. The Assessing Officer issued a draft assessment order, which was later finalized after objections before the Dispute Resolution Panel. The final assessment order was challenged before the Income Tax Appellate Tribunal, which partly allowed the appeal. Subsequent cross-appeals were filed before the Delhi High Court.

Issue 3: Interpretation of VSV Act
The main question was whether an applicant under the VSV Act could settle one or more appeals while continuing to contest others. Reference was made to a previous judgment which concluded that each appeal, writ petition, or SLP was treated as a separate dispute under the Act. The judgment clarified that the unit for settlement of disputes under the Act was an appeal, writ petition, or SLP, not the assessment year as contended by the revenue.

Conclusion:
The Court allowed the writ petition, setting aside the rejection of Forms and the communication. The authority under the VSV Act was directed to process the Forms filed by the petitioner. The decision was based on the interpretation that the unit for settlement under the Act was an appeal, writ petition, or SLP, not the assessment year.