Gujarat High Court

Neelaben Ghanshyambhai Parmar vs The Principal Commissioner Of Income ... on 8 September, 2025

Author: Bhargav D. Karia

Bench: Bhargav D. Karia

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                          C/SCA/10560/2025                                       JUDGMENT DATED: 08/09/2025

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                                   IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

                                    R/SPECIAL CIVIL APPLICATION NO. 10560 of 2025

                                                         With
                                     R/SPECIAL CIVIL APPLICATION NO. 10784 of 2025

                      FOR APPROVAL AND SIGNATURE:


                      HONOURABLE MR. JUSTICE BHARGAV D. KARIA

                      and
                      HONOURABLE MR. JUSTICE PRANAV TRIVEDI

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                                  Approved for Reporting                        Yes           No

                      ==========================================================
                                         NEELABEN GHANSHYAMBHAI PARMAR
                                                      Versus
                                     THE PRINCIPAL COMMISSIONER OF INCOME TAX
                      ==========================================================
                      Appearance:
                      MR SUDHIR M MEHTA(2058) for the Petitioner(s) No. 1
                      MS SHAILEE S MEHTA(5873) for the Petitioner(s) No. 1
                      KARAN G SANGHANI(7945) for the Respondent(s) No. 1
                      ==========================================================

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

                                                            Date : 08/09/2025

                                                           ORAL JUDGMENT

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

1. Heard learned advocate Mr. Sudhir M.

Mehta for the petitioner and learned

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Senior Standing Counsel Mr. Karan Sanghani

for the respondent.

2. Having regard to the controversy

involved, with the consent of the learned

advocates for the respective parties, the

matter is taken up for hearing.

3. The issue involved in both the

petitions is identical and therefore, they

have been heard together and would be

disposed of by this common judgment.

4. Rule returnable forthwith. Learned

Senior Standing Counsel Mr. Karan Sanghani

waives service of notice of rule on behalf

of the respondent in the respective

petitions.

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5. For the sake of convenience, facts are

recorded from Special Civil Application

No.10560 of 2025.

6. By this petition under Article 227 of

the Constitution of India, the petitioner

has prayed to quash and set aside order

dated 11.04.2025 rejecting the declaration

made by the petitioner under Direct Tax

Vivad Se Vishwas Scheme, 2024 (For short

"the DTVSV Scheme, 2024").

7. The petitioner filed the return of

income for the Assessment Year 2012-2013

which was the subject to the assessment

order passed under section 144 read with

section 147 of the Income Tax Act, 1961

(For short "the Act") dated 05.12.2019

making addition of Rs.30,80,770/-.

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8. Being aggrieved, the petitioner

preferred an appeal before the appellate

authority along with application to

condone the delay on 29.05.2023.

Therefore, the appeal filed by the

petitioner was pending as on 22.07.2024

which is the specified date as per

provisions of section 89(1)(n) of the

DTVSV Scheme, 2024.

9. By Finance (No.2) Act, 2024, the DTVSV

Scheme, 2024 came into force as per

Chapter IV from section 88 to section 99

of the said Act. As per the said Scheme

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

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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, DTVSV

Scheme, 2024 was notified with effect from

1.10.2024. The Rules under the DTVSV

Scheme, 2024 have been notified on

20.09.2024.

10. Under section 97 of the DTVSV Scheme,

2024, the Central Board of Direct Taxes

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

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which reads as under:

                              S. Issue                                         Comments
                              No.
                              Eligibility of cases
                              36       Suppose a taxpayer is Yes,         such
                                       eligible to apply for cases         are
                                       DTVSV Scheme, 2024 as eligible      for

his appeal is pending settlement as on 22.7.2024. But under the subsequently, before Scheme as the taxpayer could appeal was file declaration under pending as on the DTVSV Scheme, 22.7.2024. 2024, his appeal has Disputed tax been disposed off on will be merits or dismissed as calculated in withdrawn for the the same purposes of the manner as if Scheme. Can such a the appeal taxpayer still file pending on declaration under the 22.7.2024 is Scheme? yet to be disposed off.

11. The appeal preferred by the petitioner

was disposed of by CIT(Appeals) in the

month of October/December 2024 as non

maintainable. The Central Government

thereafter issued Notification No. S.O.

1650(E) [F.No.32/2025/F.No.370142/9/2025-

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TPL] dated 8.04.2025 in exercise of the

powers conferred by clause(l) of sub-

section (1) of section 89 of the Finance

(No.2) Act, 2024 and notified the last

date as the 30th day of April, 2025 under

the DTVSV Scheme, 2024 on or before

which, a declaration in respect of tax

arrear was to be filed by the declarant to

the Designated Authority in accordance

with the provisions of section 90 of the

said Act.

12. Accordingly, the petitioner filed a

declaration for the Assessment Year 2012-

2013 on 11.03.2025 in Form-1 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 the petitioner stated that

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appeal before the CIT(Appeals) was pending

as on 22.07.2024. However the respondent

Designated Authority rejected the

declaration of the petitioner on the

ground that the appeal filed by the

petitioner was held to be non maintainable

and therefore, the same was not a valid

appeal and accordingly, the petitioner was

held to be ineligible for the benefits of

the DTVSV Scheme, 2024.

13. Learned Advocate Mr. Sudhir Mehta for

the petitioner submitted that the

eligibility criteria for filing

declaration in Form-1 under the DTVSV

Scheme, 2024 is that the appeal filed by

the petitioner before the CIT(Appeals)

should be pending on the specified date

i.e. 22.07.2024.

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14. It was submitted that as per FAQ No.36

which is inserted by Guidance Note

No.2/2024 dated 16.12.2024, CBDT has

clarified that the assessee would be

eligible for settlement under the Scheme

as the appeal was pending as on 22.07.2024

and the disputed tax will be calculated in

the same manner as if the appeal pending

on 22.07.2024 is yet to be disposed of

though appeal would have been disposed of

on merits or dismissed as withdrawn.

15. It was therefore, submitted that even

if the appeal is held to be non

maintainable by CIT(Appeals) subsequently

after 22.07.2024, the petitioner would be

eligible for benefits under the DTVSV

Scheme, 2024.

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16. In support of his submissions,

reliance was placed on the following

decisions:

i) Tushar Agro Chemicals v. Principal

Commissioner of Income-tax-1 reported in

(2022) 441 ITR 179 (Gujarat).

ii) Atul Roshanlal Gupta v. Principal

Commissioner of Income-tax reported in

(2024) 167 taxmann.com 634 (Gujarat).

17. Per contra, learned Senior Standing

Counsel Mr. Karan Sanghani for the

respondent submitted that the reliance

placed by the petitioner on FAQ No.36 as

well as the aforesaid decisions would not

be applicable in facts of the case as the

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appeal preferred by the petitioner was

held to be non maintainable and therefore,

the appeal was an invalid appeal as held

by CIT(Appeals) and such order has

achieved finality.

18. It was therefore, submitted that an

invalid appeal cannot be said to be

pending as on the specified dated i.e

22.07.2024 and therefore, the Designated

Authority has rightly rejected the

declaration of the petitioner on the

ground of invalid appeal.

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

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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

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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:

"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

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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 and

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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

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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 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

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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

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

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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 Miscellaneous Application

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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

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rejecting the declaration filed by the

petitioner in Form-1 on the ground that