2024 (4) TMI 603 - HC - Income Tax

Rejection of DTVsV application - petitioner/assessee was seeking to settle only a part of the dispute obtaining between them - HELD THAT - Given the fact we have concluded while disposing of MUFG BANK LTD VERSUS COMMISSIONER OF INCOME TAX 2 ANR. 2024 (4) TMI 530 - DELHI HIGH COURT that an applicant can choose to settle one or more appeals or SLPs that may emerge from a given assessment year under the VSV Act the issue raised in this writ petition stands covered by a decision in the said matter. Accordingly the prayer made in the writ petition is allowed. The impugned order rejecting the declaration and undertaking made by the petitioner/assessee along with the communication are set aside.

Summary

Issues involved: Assessment Year (A.Y.) 2011-12, rejection of declaration under Direct Tax Vivad Se Vishwas Rules, 2020.

The judgment concerns a writ petition where the petitioner sought to challenge the rejection of their declaration and undertaking under the Direct Tax Vivad Se Vishwas Rules, 2020 for A.Y. 2011-12. The rejection was based on the petitioner's attempt to settle only a part of the dispute with the revenue, as stated in the communication dated 17.02.2021. The petitioner had filed their Return of Income in 2011, which was selected for scrutiny, leading to a draft assessment order proposing additions to their income. Subsequent objections were made to the Dispute Resolution Panel, resulting in a final assessment order that included interest from External Commercial Borrowings. Appeals were filed before the Income Tax Appellate Tribunal, with cross-appeals and cross-objections from both parties. The Tribunal partly allowed the petitioner's appeal, leading to further appeals before the Delhi High Court. The denial of relief under the VSV Act was due to the petitioner's choice to settle only one of the pending matters, which included appeals and a Special Leave Petition. The High Court, referring to a previous decision, allowed the writ petition, setting aside the rejection and directing the revenue to process the Forms under the VSV Act.

The judgment highlights the importance of considering all pending matters when seeking settlement under the VSV Act and clarifies that an applicant can choose to settle multiple appeals or SLPs arising from a single assessment year. The decision in this case was influenced by a previous ruling in a similar matter, emphasizing consistency in the application of the VSV Act. The Court's decision to allow the writ petition and set aside the rejection underscores the need for a comprehensive approach to resolving tax disputes under the VSV Act, ensuring fair treatment for taxpayers seeking to settle their liabilities.