Gujarat High Court

Tejal Mayur Rao vs Principal Commissioner Of Income Tax 1 on 7 October, 2025

Author: Bhargav D. Karia

Bench: Bhargav D. Karia

                                                                                                                          NEUTRAL CITATION




                            C/SCA/7839/2025                                             JUDGMENT DATED: 07/10/2025

                                                                                                                           undefined




                                  IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

                                   R/SPECIAL CIVIL APPLICATION NO. 7839 of 2025


                       FOR APPROVAL AND SIGNATURE:


                       HONOURABLE MR. JUSTICE BHARGAV D. KARIA                                            Sd/-

                       and
                       HONOURABLE MR. JUSTICE PRANAV TRIVEDI                                              Sd/-

                       =========================================================

                                     Approved for Reporting                No          Yes
                                                                           ✓
                       =========================================================
                                              TEJAL MAYUR RAO
                                                     Versus
                             PRINCIPAL COMMISSIONER OF INCOME TAX 1 & ORS.
                       =========================================================
                       Appearance:
                       HIREN J TRIVEDI(8808) for the Petitioner(s) No. 1
                       MR.VARUN K.PATEL(3802) for the Respondent(s) No. 3
                       MS MAITHILI D MEHTA(3206) for the Respondent(s) No. 1,2
                       =========================================================

                          CORAM:HONOURABLE MR. JUSTICE BHARGAV D. KARIA
                                and
                                HONOURABLE MR. JUSTICE PRANAV TRIVEDI

                                                           Date : 07/10/2025

                                            ORAL JUDGMENT

(PER : HONOURABLE MR. JUSTICE BHARGAV D. KARIA)

[1] Heard learned advocate Mr. Hiren J.

Trivedi for the petitioner, learned Senior

Standing Counsel Ms. Maithili D. Mehta for

respondent Nos.1 and 2 and learned Senior

NEUTRAL CITATION

C/SCA/7839/2025 JUDGMENT DATED: 07/10/2025

undefined

Standing Counsel Mr. Varun K. Patel for

respondent No.

[2] Rule returnable forthwith. Learned

Senior Standing Counsel Ms. Maithili D. Mehta and

learned Senior Standing Counsel Mr. Varun K.

Patel, waive service of notice of rule on behalf

of the respective respondents.

[3] By this petition under Article 227 of

the Constitution of India, the petitioner has

challenged the communication dated 21.01.2025

issued by the respondent- authorities, whereby

the declaration made by the petitioner under the

Direct Tax Vivad Se Vishwas Scheme, 2024 (for

short 'DTVSV Scheme, 2024'), is rejected on the

ground that appeal filed by the petitioner was

invalid.

[4] Brief facts of the case are as under:

[4.1] The petitioner preferred an application

under the provisions of the DTVSV Scheme, 2024,

NEUTRAL CITATION

C/SCA/7839/2025 JUDGMENT DATED: 07/10/2025

undefined

as the petitioner had challenged the assessment

order for the Assessment Year 2012-13 by

preferring an appeal in Form No.35 manually, as

the petitioner is a Non-Resident Indian and was

not having Aadhar number linked with PAN, so as

to prefer an appeal online as per the provisions

of Rule 45 of the Income Tax Rules, 1962 (for

short 'the Rules').

[4.2] Assessment proceedings were carried out

pursuant to the reopening of the assessment under

Section 147 of the Income Tax Act, 1961 (for

short 'the Act') by making an addition of

Rs.32,71,000/- under Section 69A of the Act.

[4.3] The petitioner also received deficiency

memo in respect of the appeal preferred by the

petitioner on 28.04.2023 on the ground that tax

on return income was not paid or particulars of

payment was not mentioned by the petitioner. The

petitioner filed Form No.1 under the DTVSV

Scheme, 2024 on the basis of the pending appeal

NEUTRAL CITATION

C/SCA/7839/2025 JUDGMENT DATED: 07/10/2025

undefined

before the Commissioner of Income Tax (Appeals),

which was filed by the petitioner on 04.06.2020.

According to the petitioner, appeal was pending

on the specified date i.e. 22.07.2024.

[4.4] Thereafter, the petitioner received a

letter dated 26.12.2024 from the respondent-

authority seeking clarification in respect of

Form No.1 filed by the petitioner under the

DTVSV Scheme, 2024 and to furnish the details of

the Appellate Authority, before whom the appeal

is pending as on date.

[4.5] The petitioner, by reply dated

28.12.2024, contended that the petitioner has

preferred the appeal in Form No.35 manually on

04.06.2020 as the status of the petitioner was of

Non-Resident Indian and he did not have Aadhar

card linked with PAN and therefore, could not

receive OTP for the purpose of filing of appeal

online. The petitioner submitted copy of Form

No.35 filed manually along with statement of

NEUTRAL CITATION

C/SCA/7839/2025 JUDGMENT DATED: 07/10/2025

undefined

facts, grounds of appeal and the Challan of

payment of appeal fees along with the reply. The

petitioner requested the respondent to accept the

Form No.1 under the DTVSV Scheme, 2024 as the

appeal was pending on 22.07.2024, which is the

specified date under the scheme, on which, the

proceedings has to be pending to avail the

benefits of the scheme.

[4.6] The petitioner also sought opportunity

of hearing in person in respect of the notice

issued on 26.12.2024, by letter dated 30.12.2024.

However, on 21.01.2025, the Form No.1 filed by

the petitioner under the DTVSV Scheme, 2024 was

rejected with the following remarks:

"Rejection remarks :

As per the records there is no appeal pending in CIT(A) as on 22.07.2024 in your case in the case referred in form-1 dated 18.12.2025. In view of it you are not eligible for DTVSVS 2025 Scheme. Hence your request is hereby rejected."

[5] Being aggrieved, the petitioner has

preferred this petition.

NEUTRAL CITATION

C/SCA/7839/2025 JUDGMENT DATED: 07/10/2025

undefined

[6] Learned advocate Mr. Hiren J. Trivedi

for the petitioner submitted that as per the

DTVSV Scheme, 2024, only proceedings is required

to be pending as on 22.07.2024 and respondent -

authorities could not have gone into the validity

of the pending appeal.

[6.1] In support of his submissions, reliance

was placed in decision of this Court rendered in

similar facts in case of Neelaben Ghandhyambhai

Parmar Vs. The Principal Commissioner of Income

Tax, in SCA Nos.10560 and 10784 of 2025 dated

08.09.2025.

[7] On the other hand, learned Senior

Standing Counsel Mr. Varun Patel submitted that

the appeal filed by the petitioner was not in

accordance with Rule 45 as amended by the Income

Tax (Amendment), Rules 2016 effective from

01.03.2016, as the petitioner did not file appeal

online. It was, therefore, submitted that the

respondent - authorities have rightly rejected

NEUTRAL CITATION

C/SCA/7839/2025 JUDGMENT DATED: 07/10/2025

undefined

the Form No.1 filed by the petitioner under the

DTVSV Scheme, 2024 as the appeal filed by the

petitioner was not valid as on 22.07.2024.

[8] Having considered the submissions made

by the learned advocates for the respective

parties and having perused the material on

record, it would be germane to refer to the

provisions of the DTVSV Scheme, 2024, which has

come into effect by Finance (No.2) Act, 2024. As

per Chapter VI of the Finance (No.2) Act, 2024,

Section 88 to Section 99 pertains to the 'DTVSV

Scheme, 2024' for dispute resolution in respect

of pending income tax litigation and to reduce

the pending tax litigation in order to generate

timely revenue for Government and benefit the tax

payers by providing them peace of mind, certainty

and savings on account of time and resources that

would otherwise be spent on the long drawn and

vexatious litigation process. The DTVSV Scheme,

2024 was notified with effect from 01.10.2024 and

NEUTRAL CITATION

C/SCA/7839/2025 JUDGMENT DATED: 07/10/2025

undefined

the Rules under the DTVSV Scheme, 2024 have been

notified on 20.09.2024.

[9] Under Section 97 of the DTVSV Scheme,

2024, the Central Board of Direct Taxes has

issued Guidance Note No.1/2024 in form of answers

to the Frequently Asked Questions (FAQs) vide

Circular No.12 of 2024 dated 15.10.2024.

Thereafter, Guidance Note No.2/2024 was issued on

16.12.2024 and following FAQ No.36 was inserted

in place of FAQ No.8 of Guidance Note No.1/2024,

which reads as under:

                        Sr. No.                            Issue                         Comments

                        Eligibility of cases

                        36         Suppose a taxpayer is eligible to apply is Yes, such cases are
                                   pending        as      on     22.07.2024.         But eligible    for    settlement

subsequently, before the taxpayer could under the Scheme as file declaration under the DTVSV Scheme appeal was pending as 2024, his appeal has been disposed of on on 22.07.2024. Disputed merits or dismissed as withdrawn for the tax will be calculated in purposes of the Scheme. Can such a the same manner as if taxpayer still file declaration under the the appeal pending on Scheme? 22.07.2024 is yet to be disposed of.

NEUTRAL CITATION

C/SCA/7839/2025 JUDGMENT DATED: 07/10/2025

undefined

[10] It is not in dispute that the petitioner

filed an appeal manually on 04.06.2020 which was

pending on 22.07.2024. Therefore, the declaration

filed by the petitioner in Form No.1 for the

Assessment Year 2012-13 under sub-section (1) of

Section 90 read with sub-section (4) of Section

91 of the Finance (No.2) Act, 2024 under the

DTVSV Scheme, 2024 wherein it was stated that the

appeal filed before the CIT(Appeals) was pending

on 22.07.2024, was as per the record.

[11] However, the rejection of Form No.1

filed by the petitioner by the respondent -

authority on the ground that the appeal was not

maintainable as the same was not filed online as

per the provisions of Rule 45 of the Rules and

therefore, the petitioner was not eligible for

the benefits of the DTVSV Scheme, 2024, is

concerned, as per the FAQ No.36 which is inserted

by Guidance Note No.2 of 2024 dated 16.12.2024,

the CBDT has clarified that the assessee would be

NEUTRAL CITATION

C/SCA/7839/2025 JUDGMENT DATED: 07/10/2025

undefined

eligible for settlement under the DTVSV Scheme,

2024 as the appeal was pending as on 22.07.2024

and the disputed tax is to be calculated in the

same manner as if the pending appeal on

22.07.2024 is yet to be disposed of, though

appeal would have been disposed of on merits or

otherwise.

[12] This Court in case of Tushar Agro

Chemicals Vs. Principal Commissioner of Income-

Tax-1 reported in (2022) 441 ITR 179 (Gujarat)

and in case of Atul Roshanlal Gupta Vs. Principal

Commissioner of Income-Tax reported in (2024) 167

taxmann.com 634 (Gujarat), has in similar

circumstances while considering the similar

Scheme called "Kar Vivad Samadhan Scheme", held

that even if the appeal is filed with a delay, it

is to be treated as pending on the specified

date.

[13] In case of Neelaben Ghanshyambhai Parmar

(supra), after considering the above decisions of

NEUTRAL CITATION

C/SCA/7839/2025 JUDGMENT DATED: 07/10/2025

undefined

this Court, it is held as under:

"19. Having considered the rival submissions made by learned advocates for the respective parties, it would be germane to refer to the relevant provisions of the DTVSV Scheme, 2024 as contained in sections 88 to 99 in Finance (No.2) Act, 2024 as under:

"89.(1) in the Scheme, unless the context otherwise requires-

(l) "last date" means such date as may be notified by the Central Government in the Official Gazette."

(n) "specified date" means the 22nd day of July, 2024"

20. As per section 90 of the the DTVSV Scheme, 2024, a declarant assessee has to pay the tax as on 1st day of January, 2025. The date of computation of tax payable was further extended by Circular No.20/2024 dated 30.12.2024 from 31st December, 2024 to 31st January, 2025 and in view of Notification dated 8.04.2025, the last date of the Scheme was notified as the 30th day of April, 2025. Accordingly, the petitioner has filed a declaration under section 90(1) read with section 91(4) of the DTVSV Scheme, 2024 in Form-1 on the ground that the appeal preferred by the petitioner before the CIT(Appeals) though disposed of in October/December, 2024 was pending as on the specified date i.e. 22.07.2024 as per the provisions of section 89(1)(n) of Finance (No.2) Act, 2024.

21.In case of Tushar Agro Chemicals(supra), this Court has held as under:

NEUTRAL CITATION

C/SCA/7839/2025 JUDGMENT DATED: 07/10/2025

undefined

"10. At this juncture, it would be relevant to refer to the decision of Supreme Court in case of Commissioner of Income Tax v. Shatrusailya Digvijaysingh Jadeja, relied upon by the learned Senior Advocate Mr. Hemani, in which the S.C. had an occasion to deal with the issue, as to whether, the department could have rejected the Declaration filed under the similar scheme called Kar Vivad Samadhan Scheme, introduced vide the Finance [No.2] Act 1998, on the ground that the Revision / Appeal filed by the concerned Petitioner was time barred or was not valid. In the said case, the Supreme Court considered the object of the said Scheme as also the other earlier decisions, and observed as under:

"13. In our view, the Scheme was in substance a recovery scheme though it was nomenclatured as a "litigation settlement scheme" and was not similar to the earlier Voluntary Disclosure Scheme. As stated above, the said Scheme was a complete Code by itself. Its object was to put an end to all pending matters in the form of appeals, reference, revisions and writ petitions under the IT Act/WT Act.

Keeping in mind the above object, we have to examine section 95(i)(c) of the Scheme, which was different from appeals under section 246, revisions under section 264, appeals under section 260A etc. of the IT Act and similar provisions under the W.T. Act. Under the I.T. Act, there is a difference between appeals, revisions and references. However, those differences were obliterated and appeals, revisions

NEUTRAL CITATION

C/SCA/7839/2025 JUDGMENT DATED: 07/10/2025

undefined

and references were put on par under section 95(i)(c) of the Scheme. The object behind section 95(i)(c) in putting on par appeals, references and revisions was to put an end to litigation in various forms and at various stages under the IT Act/Wealth Tax Act and, therefore, the rulings on the scope of appeals and revisions under the IT Act or on Voluntary Disclosure Scheme, will not apply to this case.

15. In the case of Dr. Mrs. Renuka Delta (supra), this Court has held on interpretation of section 95(i)

(c) that if the appeal or revision is pending on the date of the filing of the declaration under section 88 of the Scheme, it is not for the DA to hold that the appeal/revision was "sham", "ineffective" or "infructuous" as it has.

16. In the case of Raja Kulkarni v. The State of Bombay reported in AIR 1954 SC 73, this Court laid down that when a section contemplates pendency of an appeal, what is required for its application is that an appeal should be pending and in such a case there is no need to introduce the qualification that it should be valid or competent. Whether an appeal is valid or competent is a question entirely for the appellate court before whom the appeal is filed to decide and this determination is possible only after the appeal is heard but there is nothing to prevent a party from filing an appeal which may

NEUTRAL CITATION

C/SCA/7839/2025 JUDGMENT DATED: 07/10/2025

undefined

ultimately be found to be incompetent, e.g., when it is held to be barred by limitation. From the mere fact that such an appeal is held to be unmaintainable on any ground whatsoever, it does not follow that there was no appeal pending before the Court.

17. To the same effect is the law laid down by the judgment of this Court in the case of Tirupati Balaji Developers (P) Ltd. v. State of Bihar & Others reported in (2004) 5 SCC 1, in which it has been held that an appeal does not cease to be an appeal though irregular and incompetent."

11. In view of the aforestated legal position, there remains no shadow of doubt that appeal could be said to be pending, even if the delay occurred in filing the same was not condoned and even if it was allegedly irregular or incompetent. In the instant case therefore also, the Respondent could not have rejected the Declaration Form of the Petitioner filed under the said Act merely on the ground that the Appeal was not valid or competent, as the delay occurred in filing the Appeal was not condoned by the Appellate Authority. In the opinion of the Court, the Respondent had to only take into consideration, as to whether, the Petitioner had filed an Appeal, and the same was pending on the 'specified date' i.e. 31.1.2020. It was not for the Respondent to decide, as to whether, such Appeal was irregular or incompetent or invalid in the eye of law."

22. In case of Atul Roshanlal

NEUTRAL CITATION

C/SCA/7839/2025 JUDGMENT DATED: 07/10/2025

undefined

Gupta(supra), it was held by this Court as under:

"7. In view of the above provisions of the VSV Act, it emerges that the petitioner has to be an appellant so as to be eligible on the specified date i.e. 31st January, 2020 to file declaration under Sections 3 and 4 of the VSV Act. Admittedly, the appeal filed by the petitioner in the year 2015 was not pending as on 31st January, 2020. However, in view of order dated 03rd September, 2020 passed by the Tribunal recalling its order dated 26th March, 2019 whereby appeal filed by the petitioner was dismissed, the appeal was restored to its file i.e. Appeal filed in the year 2015. Therefore, the appeal of the petitioner has to be considered as pending as on 31st January, 2020 which is the specified date as per the VSV Act.

7.1 It is also pertinent to note that when the petitioner has filed declaration under the VSV Act to claim the benefit of the Scheme, the Tribunal had already recalled the order dated 26th March, 2019 and therefore, the appeal preferred by the petitioner before the Tribunal was pending as on 31st January, 2020.

7.2 In view of the above facts, it cannot be said that no appeal was pending as on 31st January, 2020 when the petitioner filed the application/declaration under the provisions of the Scheme in view of order dated 03rd September, 2020 passed by the Tribunal in

NEUTRAL CITATION

C/SCA/7839/2025 JUDGMENT DATED: 07/10/2025

undefined

Miscellaneous Application No.75/Ahd/2020 preferred by the petitioner to recall order dated 26th March, 2019 whereby appeal of the petitioner was dismissed for non-prosecution."

8. Considering the above facts, the impugned action of the respondent authority of rejecting the declaration filed by the petitioner is not tenable and accordingly, the same is quashed and set aside. The respondent authority is directed to consider and process the declaration filed by the petitioner under the provisions of the VSV Act within a period of 12 weeks from the date of receipt of copy of this order. The petition is accordingly disposed of. Notice is discharged. No order as to costs."

23. Applying the above decisions to the facts of the case and in view of FAQ No.36, it is not in dispute that appeal filed by the petitioner was pending on the specified date i.e. 22.07.2024 and therefore, we are of the opinion that the Designated Authority was not justified in rejecting the declaration filed by the petitioner in Form-1 on the ground that appeal filed by the petitioner was an invalid appeal as the appeal was very much pending as on 22.07.2024 even if the same was held to be invalid subsequently. The appeal cannot be said to be not filed or pending only on the ground that it was held to be non maintainable by CIT(Appeals) subsequently. Therefore, the respondent Designated Authority could not have rejected the declaration in Form-1

NEUTRAL CITATION

C/SCA/7839/2025 JUDGMENT DATED: 07/10/2025

undefined

filed by the petitioner under the said Act merely on the ground that the appeal was not valid or competent.

24. In view of the foregoing reasons, the impugned communication in both the petitions dated 11.04.2025 displayed on the Portal of the Department, rejecting declaration in Form-1 filed by the petitioner under the DTVSV Scheme, 2024 is hereby quashed and set aside. The respondent Designated Authority is directed to process the declaration in Form-1 filed by the petitioner under the DTVSV Scheme, 2024 in accordance with the said scheme."

[14] Applying the above ratio to the facts of

the case, the respondent-authority was not

justified in rejecting the declaration in Form

No.1 filed by the petitioner under the DTVSV

Scheme, 2024 on the ground that appeal filed by

the petitioner was an invalid appeal as the same

was not filed as per Rule 45 of the Rules.

[15] In view of the foregoing reasons, the

impugned communication dated 22.01.2025 displayed

on the portal of the department, rejecting the

declaration in Form No.1 filed by the petitioner

under the DTVSV Scheme, 2024, is hereby quashed