Designated Authority Under Direct Tax Vivad Se Vishwas Act Cannot Reopen Assessment After Issuance Of Final Certificate: Delhi HC Reiterates
Kapil Dhyani
4 Jan 2025 4:30 PM IST
The Delhi High Court has reiterated that a designated authority under the Direct Tax Vivad Se Vishwas Act, 2020 cannot reopen an assessment after a final certificate is issued under Section 5 of the Act and all disputes with regard to the 'tax arrear' stand concluded. Section 5 stipulates a designated authority to determine the amount payable by a declarant under the Act within 15 days...
The Delhi High Court has reiterated that a designated authority under the Direct Tax Vivad Se Vishwas Act, 2020 cannot reopen an assessment after a final certificate is issued under Section 5 of the Act and all disputes with regard to the 'tax arrear' stand concluded.
Section 5 stipulates a designated authority to determine the amount payable by a declarant under the Act within 15 days and grant a certificate (in Form no.5) containing particulars of the tax arrear and the amount payable after such determination.
A division bench of Acting Chief Justice Vibhu Bakhru and Justice Tushar Rao Gedela observed,
“once a declarant is issued a certificate (Form No.5) in terms of Section 5 of the DTVSV Act, and the declarant deposits the determined amount, the Designated Authority is proscribed from initiating any action or proceedings in respect of 'tax arrear'. The dispute stands settled.”
In the case at hand, Petitioner had challenged the reassessment proceedings initiated under Section 147 of the Income Tax Act, 1961, after the Designated Authority had issued a certificate in Form No. 5.
The said certificate recorded that a sum of ₹59,73,812/- had been paid by the declarant towards full and final settlement of the 'tax arrear'.
At the outset, the High Court noted that 'tax arrear' are resolved in terms of Section 3 of the DTVSV Act and any appeal pending with respect to such disputed tax is deemed withdrawn as in terms of Section 4.
Court then cited Section 6 which provides immunity from initiation of proceedings in respect of tax arrears which are subject matter of resolution under the DTVSV Act.
“...a plain reading of the provisions of the DTVSV Act indicates that once a final certificate is issued under Section 5(1) of the Act, all disputes with regard to the 'tax arrear' stand concluded. It is apparent that the issuance of the impugned certificate is without authority of law,” the Court said.
Counsel appearing for the Department also conceded that there is no provision under the DTVSV Act that empowers a Designated Authority to reopen a concluded settlement.
Accordingly, the petition was allowed and impugned reassessment proceedings were set aside.
Appearance: Mr. R. Santhanam and Mr. Rishabh Ostwal, Advocates for Petitioner; Mr. Puneet Rai, SSC with Mr. Ashvini Kumar and Mr. Rishabh Nangia, JSCs and Mr. Nikhil Jain, Advocate for Respondent
Case title: S A N Garments Manufacturing Private Limited v. Pr Commissioner Of Income Tax 7 And Anr
Case no.: W.P.(C) 932/2024
