[Cites 13, Cited by 0]
Jammu & Kashmir High Court
Vidya Sagar Sharma vs Union Of India And Others on 13 February, 2026
Author: Rajnesh Oswal
Bench: Rajnesh Oswal
IN THE HIGH COURT OF JAMMU & KASHMIR AND LADAKH
AT JAMMU
Case No: WP(C) No. 536/2025
CM No.1253/2025
Reserved on: 03.02.2026
Pronounced on:13.02.2026
Uploaded on: 13.02.2026
Whether the operative part or full
Judgment is pronounced : Full
Vidya Sagar Sharma.
...Petitioner(s)/Appellant(s)
Through: Mr. Ajay Gandotra, Advocate.
v/s
Union of India and others
.... Respondent(s)
Through: Mr. Suraj Singh Wazir, Advocate
CORAM: HON'BLE THE CHIEF JUSTICE
HON'BLE MR. JUSTICE RAJNESH OSWAL, JUDGE.
JUDGMENT
PER OSWAL-J
1. Pursuant to an order passed under Sections 144/147 of the Income
Tax Act, 1961 (for short- 'the Act'), the respondent No. 3 assessed the
tax liability of the petitioner for the Assessment Year 2011-2012 and
called upon the petitioner to deposit a sum of Rs.29,73,640/-. Further,
by a separate order dated 14.06.2019 passed under Section 271(1)(c)
of the Act, the petitioner was directed to deposit a penalty amounting
to Rs.10,62,037/- on account of concealment of income.
2. The aforesaid two orders were assailed by the petitioner by way of
separate Revision Petitions filed before the Revisional Authority
under Section 264 of the Act on 16.03.2020. During the pendency of
the said Revision Petitions, the Government of India, Ministry of
Finance, introduced the Direct Tax Vivad Se Vishwas Act, 2020 (for
short, "the Act of 2020"). The rules under the Scheme were framed
vide Notification No. S.O. 1129(E).
3. The petitioner claims to have applied under the Act of 2020 before the
respondent No. 2 by submitting online Forms 1 and 2 within the
prescribed time for availing the benefits under the Act of 2020. In
order to claim the benefit of the Scheme, the petitioner furnished a
declaration on 23.02.2021 and undertaking that he would not pursue
any remedy in relation to the tax arrears. Thereafter, Form 3 dated
04.03.2021 was issued to the petitioner by respondent No. 2.
Subsequently, through his Tax Consultant, the petitioner sought
withdrawal of the two Revision Petitions, and respondent No. 2 vide a
common order dated 17.03.2021, disposed of the said Revision
Petitions accordingly.
4. Thereafter, the petitioner received a communication dated 14.05.2022
informing him that Form-4 under the Act of 2020 had not been
submitted for the Assessment Year 2011-2012. Vide letter dated
16.05.2022, the petitioner sought time to make the requisite deposit on
the ground that he was to superannuate on 30.09.2022 and was
expecting release of his retiral benefits. The petitioner further claims
to have made a representation to the Ministry of Finance on
27.10.2023 explaining the reasons for his inability to comply with the
requirements of the Act of 2020.
5. In the meantime, respondent No. 1 reintroduced the DTVSV Scheme
in the year 2024 (for short- 'the scheme of 2024'), providing a
mechanism for extending benefits to those Assesses whose
litigation(s) was/were pending as on the specified date, i.e.,
22.07.2024. The petitioner once again submitted Form-1 and, in
Schedule-X thereof, declared his liability to pay the tax assessed for
the Financial Year 2011-2012 amounting to Rs.11,68,241/- on
25.11.2024, which was subsequently revised on 23.12.2024, well
before the cut-off date of 31.12.2024. However, the respondent No. 2
rejected the said application (Form-1) vide order dated 10.01.2025,
observing that in terms of Section 89 of the Scheme of 2024, a
revision petition under Section 264 of the Act must be pending on
22.07.2024. Since, in the petitioner's case, the Revision Petitions had
already been disposed of by the PCIT, Srinagar, vide order dated
17.03.2021, no such proceedings were pending on the cut-off date, i.e.
22.07.2024. The petitioner was, therefore, held ineligible to claim the
benefit under the Scheme of 2024.
6. The order dated 10.01.2025 is the subject matter of challenge in the
present writ petition. The petitioner contends that the respondents
have erred in rejecting his application for availing the benefit under
the Scheme of 2024. According to the petitioner, in terms of Section
4(6) of the Act of 2020, upon his failure to make the payment within
the stipulated period, the Revision Petitions filed by him and
withdrawn stood revived automatically. It is, thus, the precise case of
the petitioner that his inability to comply with the mandate of the Act
within stipulated timeline resulted in automatic revival of the Revision
Petitions, by operation of Section 4(6) of the Act of 2020. However,
the respondent No. 2, in disregard of the said statutory provision,
proceeded to pass the impugned order rejecting the petitioner's claim.
7. The respondent No.2 has filed its response stating therein that for the
Assessment Year 2011-2012, the petitioner did not file any Return
and total taxable income was Rs.39,23,680/-, and accordingly, a
demand for an amount Rs. 29,73,640 was created as per the said
assessment order. Through separate order dated 14.06.2019, a penalty
of Rs.10,62,040.00 was also imposed upon the petitioner in terms of
Section 271(1)(c) of the Income Tax Act. The respondents have
admitted the filing of the Revision Petitions and the enactment of Act
of 2020 and further as per the said Act, any litigant who has filed the
appeal/writ petition/SLP, be the Assessee of the Income Tax or the
Income Tax Department may, subject to being eligible, apply for
remission/concession in the payment of Income tax and recall of any
penalty/interest. The petitioner applied by way of submitting online
Form-1 and undertaking under sub-section 5 of Section 4 of the Act of
2020 on 23.02.2021. Form-3 under sub-section (1) of the section 5 of
Act of 2020 was issued to the petitioner by respondent No.3 on
04.03.2021 determining that as against the assessed amount of tax,
interest and penalty to the tune of Rs.39,23,680/- , the amount payable
on or before 31.03.2021 would be Rs.10,62,037/-. The petitioner was
required to deposit Rs.11,68,241/- if the payment was to be made after
31.03.2021 and thereafter file Form No.4.
8. It is also contended that the dates to make above mentioned payments
were extended to 30.09.2021 without additional amount and after
01.10.2021 with additional amount vide different Notifications. The
last date to make the payment with additional amount was also
notified to be 31.10.2021, but the petitioner did not make the payment
till the extended date of 31.10.2021. And as Form-4 was not received
from the petitioner, a letter was written to the petitioner on 14.05.2022
to furnish the reasons for not submitting the Form-4 under the Act of
2020. It is contended that once the petitioner failed to deposit the said
amount within the extended time as stated above and submit Form-4,
the declaration filed by him under the Act of 2020 became void and
was deemed to have never been made as provided in Form-3 issued by
the respondents. The respondents have admitted the issuance of
DTVSV Scheme of 2024 and the contention of the petitioner that he
applied and filled the Form-1 on 03.12.2024 and determined amount
of Rs.11,68,241/- payable under DTVSV Scheme on or before
31.12.2024 as old appellant case in respect of tax arrears of
Rs.40,35,674/- for the Assessment Year 2011-2012. Thereafter, the
petitioner filed a revised Form-1 on 23.12.2024. Vide order impugned
dated 10.01.2025, the claim of the petitioner was rejected as no
Revision Petition was pending in the case of the petitioner as on the
cut-off date, i.e. 22.07.2024.
9. In nutshell, the stand of the respondents is that once the Revision
Petitions preferred by the petitioner stood disposed of vide order dated
17.03.2021, no proceedings were pending as on 22.07.2024.
Consequently, the petitioner was rendered ineligible to avail the
benefit under the DTVSV Scheme, 2024, and his claim came to be
rejected by way of the impugned order challenged in the present
petition.
10.Mr. Ajay Gandotra, learned counsel for the petitioner has submitted
that sub-section (2) of Section 4 of the Act of 2020 provides that upon
filing the declaration, any appeal pending before any authority in
respect of disputed income or disputed interest or disputed penalty
shall be deemed to have been withdrawn from the date on which the
certificate under sub-section (1) of section 5 is issued by the
designated authority. And in the instant case, the certificate was issued
by the designated authority on 04.03.2021 meaning thereby that the
Revision Petitions preferred by the petitioner in fact were deemed to
have been withdrawn on 04.03.2021 notwithstanding the formal order
of disposal of the Revision Petitions in terms of order dated
17.03.2021. He has further submitted that Section 4(6) of the Act of
2020 provides that declaration under sub section (1) of Section 4 shall
be presumed never to have been made if the declarant acts in any
manner which is not in accordance with the undertaking given by him
under sub-section (5), and in such cases, all the proceedings and the
claims which were withdrawn under Section 4 of the Act shall be
deemed to have been revived. Lastly, he submitted that for whatever
the reasons the petitioner could not follow the mandate of the Act of
2020 in view of the provisions contained in Section 4(6) of the Act of
2020, the Revision Petitions preferred by the petitioner stood
automatically revived. It is further submitted that in Form-1, the
petitioner made reference only to Section 147 of the Income Tax Act
and did not specifically mention Section 271(1)(c) of the said Act but
in Schedule-X, the petitioner clearly referred not only to the alleged
concealed income, but also to the penalty. Any omission of section
271(1)(c) of the Income Tax Act in Form-1, was bona fide error on
the part of the petitioner.
11.Per contra, Mr. Suraj Wazir, learned counsel for the respondents,
submitted that Section 4(6) of the Act of 2020 does not come to the
aid of the petitioner inasmuch as the Revision Petitions had been
withdrawn at the petitioner's own instance and stood disposed of on
17.03.2021. Since no revision proceedings were pending as on
22.07.2024, i.e., the cut-off date prescribed under the DTVSV
Scheme, 2024 for availing its benefit, the petitioner was not entitled to
seek relief under the said Scheme. It was further argued that Section
4(6) of the Act of 2020 is couched in terms which do not envisage
revival of the proceedings at the instance of the Assessee in the
manner sought to be projected by the petitioner. He has further
submitted that in the Form-1 submitted pursuant to DTVSV Scheme
of 2024, yet again the petitioner did not apply for availing the benefit
in respect of order passed under Section 271(1)(C) of the Act.
12.Heard learned counsel appearing for the parties and perused the
record.
13.It is undisputed that the petitioner submitted Form-1 along with the
requisite undertaking on 23.02.2021, pursuant to which respondent
No. 3 issued Form-3 under Section 5(1) of the Act of 2020 on
04.03.2021. Subsequently, the petitioner withdrew the Revision
Petitions on 17.03.2021. While the petitioner failed to meet the
timelines stipulated in the Form-3 and subsequent extension
notifications, the record shows he challenged the order under Section
147 of Income Tax Act without specifically assailing the order of
penalty issued under Section 271(1)(c) of Income Tax Act. Crucially,
however, Schedule-X made reference to both the alleged concealed
income and the penalty. Despite the same, respondent No. 2 issued
Form-3 only in respect of the tax arrears. Given these facts, the failure
to explicitly mention challenge to order under Section 271(1)(c) of the
Income Tax Act, appears to be a bona fide and inadvertent error for
which the petitioner should not be penalized.
14. The pivotal question for this Court's consideration is whether the
Revision Petitions, withdrawn by the petitioner on 17.03.2021, were
automatically revived upon his failure to comply with the mandate of
Form-3. To resolve this issue, it is necessary to examine the relevant
provisions of Section 4 of the Act of 2020, which are extracted below:
4. Filing of declaration and particulars to be furnished-(1)
The declaration referred to in section 3 shall be filed by the
declarant before the designated authority in such form and
verified in such manner as may be prescribed.
(2) Upon the filing the declaration, 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 is issued by the
designated authority.
(3) Where the declarant has filed any appeal before the
appellate forum or any writ petition before the High Court or
the Supreme Court against any order in respect of tax arrear, he
shall withdraw such appeal or writ petition with the leave of the
Court wherever required after issuance of certificate under sub-
section (1) of section 5 and furnish proof of such withdrawal
alongwith the intimation of payment to the designated authority
under sub-section (2) of section 5.
(4) Where the declarant has initiated any proceeding for
arbitration, conciliation or mediation, or has given any notice
thereof under any law for the time being in force or under any
agreement entered into by India with any other country or
territory outside India whether for protection of investment or
otherwise, he shall withdraw the claim, if any, in such
proceedings or notice after issuance of certificate under sub-
section (1) of section 5 and furnish proof of such withdrawal
alongwith the intimation of payment to the designated authority
under sub-section (2) of section 5.
(5) Without prejudice to the provisions of sub-sections
(2), (3) and (4), the declarant shall furnish an undertaking
waiving his right, whether direct or indirect, to seek or pursue
any remedy or any claim in relation to the tax arrear which may
otherwise be available to him under any law for the time being
in force, in equity, under statute or under any agreement entered
into by India with any country or territory outside India whether
for protection of investment or otherwise and the undertaking
shall be made in such form and manner as may be prescribed.
(6) The declaration under sub-section (1) shall be
presumed never to have been made if,--
(a) any material particular furnished in the declaration is
found to be false at any stage;
(b) the declarant violates any of the conditions referred to
in this Act
(c) the declarant acts in any manner which is not in
accordance with the undertaking given by him under sub-
section (5), and in such cases, all the proceedings and claims
which were withdrawn under section 4 and all the consequences
under the Income-tax Act against the declarant shall be deemed
to have been revived.
(7) No appellate forum or arbitrator, conciliator or
mediator shall proceed to decide any issue relating to the tax
arrear mentioned in the declaration in respect of which an order
has been made under sub-section (1) of section 5 by the
designated authority or the payment of sum determined under
that section."
15.A perusal of Section 4 of the Act of 2020 reveals that a declaration
under Section 4 is a sine qua non for availing the benefits under the
Act of 2020. Section 4(2) of the Act of 2020 mandates that upon filing
such a declaration, any pending appeal before the Income Tax
Appellate Tribunal or the Commissioner (Appeals) shall be deemed
withdrawn from the date the Designated Authority issues the
certificate under Section 5(1) of the Act.
16.This provision of 'deemed withdrawal' operates automatically by
operation of law and is independent of any formal order passed by the
concerned authority. In the instant case, it is the admitted position of
the respondents that the petitioner submitted Form-1 and the requisite
undertaking under Section 4(5) of the Act on 23.02.2021.
Consequently, the Revision Petitions are deemed to have been
withdrawn on 04.03.2021 when the Form-3 under Section 5(1) of the
Act of 2020 was issued, notwithstanding that the formal order of
withdrawal was passed only on 17.03.2021.
17.It is further undisputed that the petitioner failed to adhere to the Act's
requirements by not depositing the amounts stipulated in the Form-3.
Specifically, the petitioner was obligated to pay ₹10,62,037 on or
before 31.03.2021, or ₹11,68,241 thereafter. Despite multiple
extensions of the deadline, the petitioner failed to deposit the amounts
specified in the Form-3.
18.Section 4(6) of the Act of 2020, as extracted above, creates a legal
fiction that a declaration under sub-section (1) is presumed never to
have been made if the declarant fails to satisfy the statutory
conditions. Specifically, if a declarant violates any condition of the
Act or fails to act in accordance with the undertaking given under sub-
section (5) of Section 4 of the Act of 2020, all the proceedings and the
claims withdrawn under Section 4 of the Act of 2020 along and the
consequences against the declarant under the Income Tax Act are
deemed to have been revived by operation of law.
19.It is undisputed that the petitioner failed to comply with the mandate
of the Act by not depositing the amount determined in the Form-3.
The petitioner contends that this violation triggers the consequences
under Section 4(6) of the Act of 2020, resulting in the automatic
revival of his Revision Petitions. Conversely, the respondents argue
that the phrase 'all the proceedings and the claims' followed by 'all the
consequences under the Income Tax Act' refers exclusively to the
proceedings or the claims initiated by the Department.
20.A plain reading of Section 4(6) of the Act of 2020 refutes this
restrictive interpretation. The provision encompasses 'all the
proceedings and claims' without distinction; it does not differentiate
between those initiated by the Assessee and those by the Income Tax
Authority. Had the Legislature intended to limit the scope of 'revival'
solely to Departmental actions, it would have employed specific
qualifying language to that effect.
21.Furthermore, the statutory definition of 'appellant' under the Act is
expansive, including any person who has filed an appeal, writ petition,
SLP, or an application for Revision under Section 264 of the Income
Tax Act, whether filed by the individual or the Income Tax Authority.
In the present case, the petitioner had invoked the Revision
jurisdiction under Section 264 of the Income Tax Act. Consequently,
we are of the considered view that the expression 'all the proceedings
and claims' withdrawn under Section 4 of the Act of 2020 must
include those filed by the Assessee also. To hold otherwise would be
to read a limitation into the statute that does not exist.
22.Applying the principle of harmonious construction, we are of the
considered opinion that the expression 'consequences under the
Income Tax Act against the declarant' necessarily implies that any
adverse orders previously passed against the declarant-assessee are
also revived. This ensures that upon the failure of the declaration, the
parties are restored to their original positions, including the
petitioner's right to pursue his challenge against such orders.
23.Accordingly, we are of the considered view that by virtue of Section
4(6) of the Act of 2020, once the petitioner failed to comply with the
statutory mandate within the stipulated time, the Revision Petitions
stood automatically revived by operation of law. The parties are,
therefore, restored to the same legal position they occupied prior to
the filing of the declaration.
24.Authorities administering a beneficial scheme designed for the
resolution of tax disputes are expected to adopt a purposive approach
that furthers its underlying objectives, particularly where an assessee
demonstrates a clear intent to settle. In the present case, we find that
the respondents proceeded on the erroneous premise that the petitioner
was ineligible under the DTVSV Scheme, 2024, on the ground that no
Revision Petitions were pending on the relevant date. This conclusion
was reached in complete disregard of the statutory mandate under
Section 4(6) of the Act of 2020, which provides for the automatic
revival of such proceedings upon a default. Consequently, the
impugned order dated 10.01.2025 suffers from a manifest error of law
and cannot be sustained. The respondents are correct in submitting
that the petitioner in the Form-1 submitted to avail the benefit of
DTVSV Scheme of 2024 has again committed the same mistake,
which he committed while applying under the Act of 2020.
25.In view of the foregoing discussion and findings, the impugned order
dated 10.01.2025 is set aside. The petitioner shall approach the
respondents within a period of thirty days from today for completion
of all the requisite formalities for availing the benefit of the DTVSV
Scheme, 2024, in respect of both the tax arrears and the penalty
imposed. Upon such approach, the respondents shall permit the
petitioner to do the needful within the aforesaid period. After the
petitioner completes the necessary formalities within the stipulated
time, the respondents shall grant the benefit of the DTVSV Scheme,
2024 to the petitioner within a further period of thirty days thereafter.
In the event the petitioner fails to approach the respondents within the
stipulated period or fails to comply with the mandate for grant of
benefit within the time prescribed, the respondents shall be at liberty
to proceed against the petitioner in accordance with law.
26.Disposed of as above along with connected CM(s) if any.
(Rajnesh Oswal) (Arun Palli)
Judge Chief Justice
Jammu
13.02.2026
Madan Verma-Secy
Whether order is speaking? Yes.
Whether order is reportable? Yes.
MADAN LAL VERMA
2026.02.13 16:19
integrity of this document
