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2025 Supreme(Online)(Pat) 1500
PATNA HIGH COURT
RAJEEV RANJAN PRASAD, ASHOK KUMAR PANDEY, JJ
Manohar Lal Poddar – Appellant
Versus
Union of India – Respondent
Civil Writ Jurisdiction Case No.215 of 2025
For the Appellants/Petitioners:Mr. Prabhat Ranjan Singh, Advocate, Dr. Ajit Kumar Pathak, Advocate
For the Respondents:Ms. Archana Sinha, Senior SC, Mr. Alok Kumar, Advocate
Once a settlement certificate under the Direct Tax Vivad se Vishwas Act is issued, the authority cannot reopen previous assessments or impose new demands under the Income Tax Act, ensuring legislative finality in tax disputes.
Headnote:(A) Income Tax Act, 1961 - Sections 132(1-A), 143(3), 154 - Direct Tax Vivad se Vishwas Act, 2020 - Writ application seeking quashing of orders reopening the assessment and non-issuance of tax refund. The court found that once a settlement certificate under the Direct Tax Vivad se Vishwas Act was issued, subsequent reopening of proceedings or demands were not permissible. The Assessing Officer exceeded jurisdiction by attempting to rectify matters concluded under the Act. (Paras 3, 17, 29)
(B) Legal principle - Authority under the Income Tax Act lacks the power to amend orders from the Direct Tax Vivad se Vishwas Act once closure of proceedings is certified. Acknowledgement of legislative intent to finality in tax disputes settled under the Act prevails. (Para 24)
Facts of the case:
The petitioner underwent a tax assessment leading to disputed sums and pursued a refund under the Direct Tax Vivad se Vishwas Act after paying disputed amounts. When this refund was not issued, new tax demands arose without jurisdiction under the Act, leading to the present writ application (Paras 3-7).
Findings of Court:
The reopening of the concluded tax settlement under the Direct Tax Vivad se Vishwas Act was impermissible, reaffirming that settled matters are to remain conclusively addressed so as to uphold legislative intent.
Result: The orders of reopening and demand were set aside. The petitioner entitled to tax refund with statutory interest. (Para 29)
| Table of Content |
|---|
| 1. details of the petitioner's tax dispute. (Para 2 , 3 , 4 , 5 , 6 , 7) |
| 2. arguments presented by the petitioner. (Para 8 , 9 , 10 , 11 , 12 , 13 , 14 , 15) |
| 3. court's examination of legal provisions. (Para 17 , 18 , 19 , 20 , 21 , 22 , 23 , 24 , 25 , 26 , 27 , 28) |
| 4. final ruling on the petitioner's claim. (Para 29) |
ORAL JUDGMENT
(Per: HONOURABLE MR. JUSTICE RAJEEV RANJAN PRASAD)
Date : 07-07-2025
Heard Mr. Prabhat Ranjan Singh, learned counsel for the petitioner and Ms. Archana Sinha, learned Senior Standing Counsel for the Department of Income Tax (respondents).
2. This writ application has been filed seeking the following reliefs:-
“I. That, order passed in Revision No. PCIT (Central), Patna/Revision-264/ 100000509032/2023 dt.30.01.24 passed by Respondent No.2 may kindly be quashed and set aside.
II. That, since Respondents have issued certificate in the prescribed form 5 of the Direct Tax Vivad se Vishwas Act 2020 Act, petitioner further prays for holding that Respondent No.2 has no right to reopen a proceeding duly set at rest long back on 5.11.21, by the order of competent authority in the 1st round of litigation.
III. That, Respondents may further be directed to refund Rs.4,81,087/- excess amount of disputed tax, ordered to be refunded in 1st round of litigation, with statutory interest, to be calculated from the date of issuance of certificate in Form 5 of the Direct Tax Vivad se Vishwas Act 2020, dt.5.11.21 to the day of its final disbursement in favour of petitioner.
IV. That, be further held that the order contained in Form 5 of the Direct Tax Vivad se Vishwas Act 2020 has already attended finality, and as such, respondents have no other option rather to accept the order passed in 1st round of litigation under the said Act.
V. That, for any other relief(s) for which petitioner is found entitled on the facts of this case and also in the eye of law.
Brief Facts of the Case
3. From the narrations present in the writ application, it appears that at one point of time, pursuant to seizure of cash amount of Rs.19.10 lakh from a collection agent of the petitioner, a warrant under Section 132 (1-A) of the Income Tax Act, 1961 (hereinafter referred to as the ‘Act of 1961’) was issued on 28.10.2016. In a proceeding under Section 143 (3) read with Section 153-B of the Act of 1961, an order dated 19.12.2018 was passed whereby the total income of the petitioner was assessed at Rs.18,08,450/- (excluding agriculture income for rate purpose of Rs.1,75,590/-). This was against the returned income of Rs.2,88,577/-. The authorities of the Department also found that there were unexplained income of Rs.12 lakh and unexplained investment of Rs.2,23,339/-. This led to a net tax demand of Rs.5,88,457/- for which a notice under Section 156 dated 19.12.2018 was served upon the petitioner.
4. As the petitioner disputed the assessment and approached the Appellate Forum, during pendency of the appeal, a legislation, namely, the Direct Tax Vivad se Vishwas Act, 2020 (hereinafter referred to as the ‘Act of 2020’) came into effect. It was a legislation providing for resolution of disputed tax and for matters connected therewith or incidental thereto. According to sub-section (2) of Section 4 of the Act of 2020, upon filing of the declaration referred to in Section 3 before the designated authority, any appeal pending before the Income Tax Appellate Tribunal or Commissioner (Appeals), in respect of the disputed income or disputed interest or disputed penalty or disputed fee and tax arrear shall be deemed to have been withdrawn from the date on which certificate under sub-section (1) of Section 5 was issued by the designated authority. By virtue of sub-section (3) of of the Act of 2020, every order passed under sub-section (1), determining the amount payable under this Act, shall be conclusive as to the matters stated therein and no matter covered by such order shall be reopened in any other proceeding under the Income Tax Act or under any ot
