The court ruled that the computation of disputed tax under the DTVSV Act must be at 100% for non-search cases, rejecting the belated amendment of appeal by the Petitioner.

JUDGMENT :

M. S. Sonak, J.

1. Heard learned counsel for the parties.

2. Rule. The rule is made returnable immediately at the request of and with the consent of learned counsel for the parties.

3. The Petitioner seeks the following substantive reliefs in this Petition:-

a. That this Hon'ble Court may be pleased to issue under Article 226 of the Constitution of India an appropriate direction order or a writ including a writ in the nature of 'Certiorari' to call for the records and verify the declaration filed under section 4(1) of the DTVSV Act and direct the Respondent no. 2 to accept the amount payable as determined by the Petitioner in the declaration dated 21.03.2020 as per section 3(a) of the DTVSV Act and grant the refund as sought in the same.

b. That the Hon'ble Court may be pleased to issue under Article 226 of the Constitution of India appropriate writ or order or direction including a writ in the nature of 'Mandamus' directing the Respondent No. 2 to accept the amount payable as per section 3(a) of the DTVSV Act as determined by the Petitioner in the declaration dated 21.03.2020 filed in Form 1 and 2 and grant the refund as claimed in the same.

c. That this Hon'ble Court may be pleased to issue under Article 226 of the Constitution of India an appropriate writ or order or direction including a writ in the nature of 'Prohibition' restraining the Respondent no. 3 from disposing of the appeals pending before him and the Respondent no. 1 and 2 from recovering the outstanding demand disputed in appeals pending before the Respondent no. 3.

d. That this Hon'ble Court may be pleased to issue an appropriate direction or order restraining the Respondents from initiating the recovery proceedings with respect of the 'disputed tax' determined by the Respondent No.3 in the certificate issued in Form 3 and restrain the Respondent no.3 from disposing of the appeal pending before him till the disposal of the present Writ Petition.”

4. At the outset, Mr. K Gopal, the learned counsel for the Petitioner, submitted that the calculation of the amount at the rate of 125% by relying upon the circular dated 04 December 2020 was entirely illegal and ultra-vires. He submitted that this calculation is based on the premise that a search was executed in some other taxpayer’s case and that this was not a case of voluntary disclosure by the Petitioner or that this was not a “non-search” case. He submitted that this was indeed a “non-search case”, and the Respondents accept this position in paragraph 34 of the Affidavit- in-Reply filed by Mr Vimalendu Verma – Principal Commissioner of Income Tax – 19 on 17 July 2021. Accordingly, he submitted that the calculation should have been based on the rate of 100% of the disputed tax, not 125%. Mr Gopal relied upon Bhupendra Harilal,(2021) 435 ITR 220 (Bombay) Mehta Vs. Principal Commissioner of Income-tax, Mumbai-19 , in support of this contention.

5. Mr. Gopal submitted that the non-consideration of the additional grounds raised by the Petitioner in the Appeals instituted before the specified date was illegal and arbitrary. He submitted that attempts were made to raise these grounds before 31 January 2020, but this was not possible because of transitional issues and software glitches. He submitted that on 04 December 2020, the Petitioner did raise additional grounds challenging the addition of Rs.2,02,50,919/- on account of Long-Term Capital Gains (“LTCG”) under Section 68 of the Income Tax Act, 1961. However, the Respondents have not considered these grounds for determining the disputed tax under the Direct Tax Vivad Se Vishwas Act, 2020 (“DTVSV Act”).

6. Mr. Gopal submitted that the Respondents have also failed to consider and apply CBDT Circular No.21 of 2020, dated 04 December 2020, which specifies that additional grounds must be considered when computing disputed tax. He submitted that the CBDT Circulars are binding upon the Respondents, and their non-consideration or non-application is illegal and arbitrary.

7. M