Case Note & Summary
The petitioner, Weber Hydraulics India Pvt. Ltd., filed a writ petition before the Bombay High Court challenging the issuance of a Certificate in Form No.3 under the Direct Tax Vivad Se Vishwas Act, 2020 (VSV Act) and the rejection of its rectification application. The petitioner had filed its return of income for assessment year 2013-14 declaring a loss of Rs.1,13,64,543/-. The Assessing Officer passed an assessment order under Section 143(3) of the Income Tax Act, 1961 on 14 March 2016, assessing total income at Rs.2,26,63,380/-. The petitioner appealed to the Commissioner of Income Tax (Appeals) on 19 April 2016 and also filed a rectification application on 29 April 2016, which was allowed, revising the assessed income to Rs.36,70,608/- and demand to Rs.15,42,537/-. Subsequently, the petitioner applied for stay of recovery and paid 50% of the revised demand. Under the VSV Act, the petitioner filed Form No.1 declaring disputed tax of Rs.11,34,218/- and tax arrears of Rs.15,42,537/-. However, the respondents issued Form No.3 with different figures, and the petitioner's rectification application dated 18 January 2021 was rejected. The court admitted the petition and heard final arguments. The court observed that the respondents had not filed a reply despite opportunities. The court held that the respondents were bound to issue Form No.3 in accordance with Rule 4 of the Direct Tax Vivad Se Vishwas Scheme Rules, 2020, based on the amounts declared by the petitioner in Form No.1. The court allowed the petition, quashed the impugned certificate and rejection communication, and directed the respondents to issue a fresh Form No.3 considering the disputed tax at Rs.11,34,218/- and tax arrears at Rs.15,42,537/- as declared by the petitioner.
Headnote
A) Direct Tax Vivad Se Vishwas Act, 2020 - Certificate in Form No.3 - Computation of Tax Arrears - The petitioner declared disputed tax of Rs.11,34,218/- and tax arrears of Rs.15,42,537/- in Form No.1, but the respondents issued Form No.3 with different figures without considering the petitioner's declaration. The court held that the respondents were bound to issue Form No.3 in accordance with Rule 4 of the Direct Tax Vivad Se Vishwas Scheme Rules, 2020, based on the amounts declared by the petitioner in Form No.1. (Paras 2-7) B) Income Tax Act, 1961 - Rectification under Section 154 - Rejection of Rectification Application - The petitioner's rectification application dated 18 January 2021 was rejected without proper consideration. The court held that the rejection was not justified as the certificate issued did not reflect the correct tax arrears as per the petitioner's declaration. (Paras 2, 7) C) Writ of Mandamus - Issuance of Correct Certificate - The court directed the respondents to issue a fresh Form No.3 in terms of Rule 4 of the Direct Tax Vivad Se Vishwas Scheme Rules, 2020, considering the disputed tax at Rs.11,34,218/- and tax arrears at Rs.15,42,537/- as declared by the petitioner in Form No.1 for the assessment year 2013-14. (Paras 7-8)
Issue of Consideration
Whether the respondents were justified in issuing a Certificate in Form No.3 under the Direct Tax Vivad Se Vishwas Act, 2020, without considering the disputed tax and tax arrears as declared by the petitioner in Form No.1, and whether the rejection of the rectification application was valid.
Final Decision
The court allowed the petition, quashed the impugned Certificate in Form No.3 and the communication dated 18 January 2021 rejecting the rectification application, and directed the respondents to issue a fresh Form No.3 in terms of Rule 4 of the Direct Tax Vivad Se Vishwas Scheme Rules, 2020, considering the disputed tax at Rs.11,34,218/- and tax arrears at Rs.15,42,537/- as declared by the petitioner in Form No.1 for the assessment year 2013-14.
Law Points
- Interpretation of Direct Tax Vivad Se Vishwas Act
- 2020
- Rule 4 of Direct Tax Vivad Se Vishwas Scheme Rules
- Rectification under Section 154 of Income Tax Act
- 1961
- Mandamus for correction of certificate
