9911796707
TMI Blog2023 (2) TMI 26X X X X Extracts X X X X X X X X Extracts X X X X ..... hares issued by the assessee without appreciating that in terms of section 5[3] of the Direct Tax Vivad se Vishwas Act, 2020, the assessment could not be reopened in respect of matters that were settled under the scheme and that the receipt of the share premium was not an independent transaction but part of the amounts received by the assessee for issue of shares at premium for which an addition of Rs. 9,71,04,000/ - representing share premium was made u/s. 68 of the Act in the order of assessment and thus, the matter stood settled under the VSV scheme. 3. Without prejudice to the above, the learned PCIT erred in holding that the assessment order passed u/s. 143[3] rws 147 of the Act, dated 27/12/2019 was erroneous in so far it is prejudicial to the interest of revenue on account of the failure of the A.O. to make enquiries in course of assessment. 4. The learned PCIT failed to appreciate that the learned A.O. had passed the order u/s 143(3) rws 147 of the Act after making sufficient inquiries with regard to the receipt of amounts towards issue of shares and there was proper application of mind, and thus the same could not be held as erroneous in order to warrant revision u/s 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ttlement in Form 1 and 2 and thereafter the assessee had received Form No.3 from the Designated Authority accepting the application. Accordingly, the assessee has withdrawn the appeal filed by the assessee before the CIT[A] and has paid the taxes due and filed Form 4. Thereafter, the assessee has also received Form 5 from the Designated Authority and the matter has since become final. 5. The assessee received a notice u/s. 263of the Act, dated 05/01/2022 fixing the case for hearing on 19/01/2022from the P.C.I.T. It was stated in the said notice that the revision proceedings had been initiated for the following reasons: "On a perusal of the records, the following discrepancy is found:- 3.1 It was found that only the share premium was added back without adding back the share capital relating to the share premium. The assessee company had reportedly issued shares at Rs. 250 per share (Rs. 10+ Rs.240) to the paper companies and the share capital received by the company was at Rs. 40,46,000/- (9,71,04,000/240'10) which should also have been added back. Failure to do so resulted in short computation of Rs. 40,46,000/- with a consequent short levy of tax amounting to Rs. 25,33,55 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have been done. Hence, it is held that the assessment order passed by the Assessing Officer is erroneous so far as it is pre-judicial to the interest of the Revenue as per the provisions of Clause (a) of Explanation (2) to the Section 263 of the Income-tax Act, 1961. 8. The assessee in its submission during current proceedings has submitted that addition on account of receipt of Share premium of Rs. 9,71,04,000/- was disputed before CIT(A) and is settled subsequently under VSV scheme. Hence it is claimed that once the issue is settled under VSV it should not be revised under 263 of I T Act. Further, it is also claimed that order passed by AO cannot be deemed to be erroneous as the conditions of explanation 2 to section 263 are not satisfied. 9.The claim made by assessee are thoroughly considered. The addition made by the assessing officer in the reassessment order on account of unexplained share premium received is settled by the assessee under DTVSV Scheme, however the issue of unexplained share capital of Rs. 40,46,000/- was not considered by the assessing officer during assessment proceedings and no addition was made, even though the information of the same was available wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 143(3) r.w.s. 147. The assessee has opted for DTVSV for this issue and filed the relevant forms in this regard [Page 113 to 126 of the paper book]. The Ld.AR submitted that the same issue cannot be a subject matter of proceedings u/s. 263 of the Act. The Ld.AR in this regard relied on the decision of Hon'ble Madras High Court in the case of Gopalakrishnan Rajkumar vs. PCIT (2022) 445 ITR 557 (Mad). The Ld.AR drew our attention to the decision of the Coordinate Bench in the case of Shri Pavan Kandkur vs. PCIT in ITA No. 522/Bang/2022 dated 17.11.2022 in which case the Hon'ble Tribunal has followed the decision of the Hon'ble Madras High Court in the case of Gopalakrishnan Rajkumar (supra). On merits, the Ld.AR submitted the impugned issue has been thoroughly verified by the AO which evident from the detailed findings given in the order of assessment by the AO. The Ld.AR therefore submitted that the ground on which the revisionary proceedings i.e. lack of enquiry by the AO about the genuineness of the face value of the shares is not correct and clause(a) of explanation(2) to section 263 cannot be applied in assessee's case. 9. The Ld.DR submitted that the disputed amount for which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed; (C) in a case where the order has been passed by the Assessing Officer on or before the specified date, and the time for filing appeal against such order has not expired as on that date, the amount of tax payable by the assessee in accordance with such order; (D) in a case where objection filed by the assessee is pending before the Dispute Resolution Panel under section 144C of the Income-tax Act as on the specified date, the amount of tax payable by the assessee if the Dispute Resolution Panel was to confirm the variation proposed in the draft order; (E) in a case where Dispute Resolution Panel has issued any direction under sub-section (5) of section 144C of the Income-tax Act and the Assessing Officer has not passed the order under sub-section (13) of that section on or before the specified date, the amount of tax payable by the assessee as per the assessment order to be passed by the Assessing Officer under subsection (13) thereof; (F) in a case where an application for revision under section 264 of the Income-tax Act is pending as on the specified date, the amount of tax payable by the assessee if such application for revision was not to be accepted: Provided th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eliness specified under section (5), the designated authority shall not institute any proceedings in respect of an offence or aims or levy any penalty or charge any interest under the Income-tax in respect of the tax arrears. 44. Section 5 of the Direct Tax Vivad Se Vishwas Act, 2020, also makes it clear that save as otherwise expressly provided in sub-section (3) of section 5 or section 6, noting contained in this Act shall be construed as conferring any benefit, concession or immunity on the declarant in any proceedings other than those in relation to which the declaration has been made. 45. The intention of the parliament enacting the of the Direct Tax Vivad Se Vishwas Act, 2020, is to bring a closure of disputes in respect of tax arrears. Whether the petitioner had correctly or wrongly availed the benefit of section 57(F) of the Income-tax Act or not cannot be re-opened once again under section 263 of the Income-tax Act, 1961. 46. Once the petitioners had opted to settle the dispute under the Direct Tax Vivad Se Vishwas Act, 2020, the proceedings initiated under section 263 have to go. If on the other hand the respective petitioners had not filed Form 1 and 2 or not accep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at section 8 of DTVSV scheme, states that the immunity is not available to the declarant in any proceedings other than those in relation to which the declaration has been made. 12. In assessee's case the declaration under DTVSV is made for the proceedings in which disputed amount pertaining to the allotment of shares to shell company on premium. The assessee has filed the necessary forms under DTVSV and the Form 5 confirming the settlement under the scheme issue by the PCIT. Therefore the impugned transaction in our view has been part of the proceedings declared under DTVSV. We see merit in the argument of the Ld.AR that without verification of the face value, the AO would not have assessed the premium amount and that the amount towards face value of the shares is part and parcel of the entire proceedings for which the assessee has opted DTVSV. Therefore we are of the considered view that the assessee's case is covered by the ratio laid down by the Hon'ble Madras High Court in Gopalakrishnan Rajkumar (supra) as followed by the decision of the Coordinate Bench in the case of Shri Pavan Kandkur (supra). Respectfully following these decisions, we hold that the PCIT is not justified i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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