2024 (12) TMI 253 - HC - Income Tax

Direct Tax Vivad Se Vishwas scheme - Issuance of Form No. 3 under the Direct Tax Vivad Se Vishwas Act - erroneous calculation of interest by the tax authorities - difference as regards waiver of interest on disputed taxes and interest on tax not in dispute - HELD THAT - A plain reading of the provisions contained in Section 3 of the DTVSV Act is sufficient to come to the conclusion that no distinction has been made / drawn between waiver of interest on disputed taxes and waiver of interest on tax not in dispute; it follows therefrom that in the instant case in the light of the undisputed fact that the Assessment orders were passed pursuant to search proceedings and the provisions contained in Section 3 of the DTVSV Act supra the petitioner would be entitled to waiver of the entire interest amount as determined in the Assessment orders and consequently the applications in Forms - 1 and 2 submitted by the petitioner undertaking to make payment of the disputed taxes in the manner laid down under Section 3 of the DTVSV Act by granting waiver of interest deserve to be allowed. It is therefore clear that the respondents have failed to consider and appreciate this aspect of the matter while issuing Form - 3 and have erroneously called upon the petitioner to pay the interest by issuing the impugned Forms at Annexures - E1 to E4 which are not only without jurisdiction or authority of law but also illegal arbitrary and contrary to facts and the provisions of the DTVSV Act warranting interference by this Court in the present petition. Petitioner submits at this stage that in view of the present petition being allowed petitioner would withdraw the pending appeals / rectification applications as expeditiously as possible. The said submission is placed on record. Insofar as the CBDT standing order directing the process under the DTVSV Act to be completed by 30.09.2024 is concerned having regard to the present petition being filed on 12.07.2024 and being allowed by the present order the respondents are directed to comply with the directions issued in the present order even though the same is beyond 30.09.2024. Petition allowed. The respondents are directed to accept Forms -1 and 2 at Annexures - D1 to D4 submitted by the petitioner and issue fresh Certificate in Form - 3 in favour of the petitioner within a period of four weeks .

Summary

Issues:
1. Challenge to the issuance of Form No. 3 under the Direct Tax Vivad Se Vishwas Act, 2020 for multiple assessment years.
2. Interpretation of provisions under the Direct Tax Vivad Se Vishwas Act, 2020 regarding waiver of interest on disputed taxes.
3. Allegations of erroneous calculation of interest by the tax authorities.
4. Compliance with CBDT standing order directing completion of process under the DTVSV Act.

Detailed Analysis:
1. The petitioner sought writs of certiorari to quash digitally signed Form No. 3 issued by the tax authority for assessment years 2006-07 to 2009-10 under the Direct Tax Vivad Se Vishwas Act, 2020. The petitioner contended that the forms determined liabilities higher than declared and requested fresh forms for correct payment under the scheme.
2. The court examined the provisions of Section 3 of the DTVSV Act, emphasizing that the Act does not differentiate between waiver of interest on disputed and undisputed taxes in cases arising from search proceedings. It concluded that the petitioner was entitled to the full benefit of the scheme, including waiver of interest on the entire amount as per the assessment orders.
3. The judgment highlighted that the DTVSV Act was enacted for the benefit of taxpayers and the petitioner should receive the intended benefits. It criticized the tax authorities for demanding interest contrary to the Act's provisions, deeming their actions illegal and arbitrary. The court ordered the quashing of the impugned certificates and directed the issuance of fresh certificates in line with the petitioner's declarations.
4. Regarding the CBDT standing order setting a deadline for the process under the DTVSV Act, the court directed compliance with its order despite the deadline passing, emphasizing the importance of following the court's directions. The judgment allowed the petition, quashed the certificates, and instructed the tax authorities to issue fresh certificates within a specified timeframe.