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TMI Blog2025 (5) TMI 130X X X X Extracts X X X X X X X X Extracts X X X X ..... r and / or directions in the nature of mandamus directing the Respondent-Designated Authority to accept the Form-1 filed by the Petitioner for the Assessment Year 2017-18 and ; b) issue a writ of and / or order and / or directions in the nature of mandamus directing the Respondent-Designated Authority to issue Form-2 for the Assessment Year 2017-18." Prefatory facts 4. The petitioner is a company incorporated under the laws of the United Kingdom and is engaged in the business of manufacture and sale of coding and marking equipments; manufacture and sale of consumables; sale of spares; and rendering of after sales services. The petitioner had incorporated a company in India named Domino Printech India Pvt. Ltd. [Domino India] on 16.05.1996 under the provisions of the Companies Act, 1956. Domino India was also engaged in the similar business that was carried out by the petitioner. 5. Domino India had issued 40,80,000 equity shares. The entire capital was subscribed by the petitioner - 40,79,998 (Forty Lacs Seventy-nine Thousand Nine Hundred and Ninety-eight) equity shares were held by the petitioner in its name and the balance 2 (Two) equity shares were held by Domino U.K. Ltd. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urn of income for the relevant assessment year. 13. Thereafter, on 30.01.2021, the petitioner voluntarily deposited a sum of Rs. 47,11,15,609/- with the Income Tax Authority under protest and without prejudice to its contentions that no tax was payable on account of supposed capital gains arising from conversion of equity shares of Domino India to a partnership interest in Domino LLP. 14. In compliance with the notice dated 13.01.2021 issued under Section 148 of the Act, the petitioner filed its return of income for AY 2017-18 on 31.01.2021. 15. The proceedings initiated pursuant to the notice dated 13.01.2021 issued under Section 148 of the Act culminated in an assessment order dated 23.05.2022 passed by the AO under Section 147 of the Act read with Section 144C (3) of the Act. The AO assessed the petitioner's income chargeable to tax as capital gains on account of conversion of equity shares of Domino India into partnership interest in Domino LLP, at Rs. 2,35,46,65,609/-. 16. Aggrieved by the said assessment order, the petitioner filed an appeal before the Commissioner of Income Tax (Appeals) [CIT(A)] which is pending adjudication. 17. The Parliament enacted the DTVSV Scheme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rival Contentions 25. The learned counsel for the petitioner contends that the non-disclosure of the details of the pending writ petition before this court was neither essential nor material. He submitted that the writ petition would have been rendered infructuous on settlement of the appeal, which was pending before the learned CIT(A). Additionally, the petitioner had also furnished an undertaking that it would waive all rights whether indirect or direct to pursue any remedy. It was further contended that the prescribed Form 1 did not permit the declarant to refer two separate disputes, and therefore, once the petitioner had filled in the column "whether appeal/objection/revision/writ/SLP" by mentioning 'appeal' and the next column captioned "appellate forum JCIT(A) / CIT(A) / DRP / CIT/PCIT/ITAT /HC/SC" by referring to 'CIT(A)', the online form would not accept any other entry. Thus, in the revised declaration (Form No. 1), the petitioner had mentioned the details of writ petition in scheduled column. In the alternative, he submitted that the dispute pending before this court is considered as a separate dispute by the Designated Authority. The petitioner was not precluded from s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Form-1. Upon verification, it was observed that the assessee did not disclose the details pertaining to the pending writ petition in Form-1. There was hence incorrect disclosure of information regard pending appeals in Form-1. As per section 91 (5) of the DTVSV Act, a declaration shall be deemed invalid if any material particular furnished in the declaration is found to be false at any stage. 4. When this incorrect disclosure was reported by the AO in his report dated 31.01.2025 addressed to this office, the assessee filed letter dated 04.02.2025 stating that it would withdraw the writ petition upon issuance of Form-2 even though it was not declared in Form-1. Thereafter, the assessee filed a revised Form-1 оп 07.02.2025 and also filed letter dated 08.02.2025 and email dated 19.02.2025. In the revised Form-1, the details regarding writ petition were declared. 5. The assessee submissions and revised Form-1 are carefully considered. As per CBDT Circular No. 19/2024 (FAQ no. 50) dated 16.12.2024, the amount payable is linked to the date of filing the declaration. Circular No. 20/2024 dated 30.12.2024 extended the due date for filing declarations till 31.01.2025. Since ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d tax. And second, that the AAR had not determined the income arising out of capital gains, which is chargeable to tax; therefore, the dispute stemming from the decision of the AAR was not covered by the DTVSV Scheme. 29. Before proceeding further, it would be relevant to refer to Section 91 of the Finance (No. 2) Act, 2024, the same is set out below: "91. (1) The declaration referred to in section 90 shall be filed by the declarant before the designated authority in such form and verified in such manner, as may be prescribed. (2) Upon filing the declaration, any appeal pending before the Income Tax Appellate Tribunal or Commissioner (Appeals) or Joint 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 92 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 Cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of equity shares of Domino India to a partnership interest in Domino LLP had been fleshed out in the assessment order passed by the AO under Section 147 of the Act, which was subject matter of the petitioner's appeal before the CIT(A). Indisputably, the settlement of the said dispute would be dispositive of the petitioner's claim that no income chargeable to tax had arisen from extinguishment of the equity shares of Domino India and its conversion to a partnership interest in Domino LLP. Thus, not mentioning the pendency of the writ petition in the given facts could not be construed as failure to disclose a material fact, which would render the declaration made by the petitioner non-est under Section 91 (5) (a) of the Finance (No. 2) Act 2024 or otherwise invalid. 32. It is also relevant to refer to the undertaking furnished by the petitioner, which was an integral part of the declaration made in the prescribed form. The said undertaking is reproduced below: "UNDERTAKING I ASHOK KUMAR SHRIMALI son/daughter of Shri/Smt MADAN LAL SHRIMALI designation Authorised Signatory holding PAN AJPPS6259K being duly authorised and competent in this regard, on behalf of DOMINO PRINTING SC ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to issue a certificate determining the amount payable by the declarant in accordance with the provisions of the DTVSV Scheme within fifteen days of the date of receipt of the declaration. Admittedly, no such order was passed by the Designated Authority within the period as prescribed under Section 92 (1) of the Finance (No. 2) Act, 2024. 37. There is no cavil that the Designated Authority had refrained from passing such an order on account of its objections, including failure to mention that the writ petition preferred by the petitioner was pending before this court, in the declaration. As observed earlier, we do not find the said non-disclosure to be material or of any significance in the given facts and circumstances of the case. 38. It is also not controverted that there was no specific space to mention an additional proceeding relating to the same subject matter in the relevant column in Part B (Information Relating to Dispute) of Form-1. Thus, once the petitioner had filled up the field by entering 'CIT(A)' in the relevant column regarding where dispute was pending; it could not fill in the details of the writ petition under the same column of Form no. 1. 39. The settlem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion has been filed against a notice initiating reassessment proceedings (notice under Section 148 or 148A of the Act). At the stage of reopening of the assessment, it is not ascertained whether the income of the assessee chargeable to tax has escaped assessment. The quantum of any such income and tax payable on the same is yet to be determined; the same is determined by the AO at the culmination of the proceedings. There is no determination of the "disputed income", "disputed tax", "tax arrear", "disputed penalty" and "disputed interest" at the stage of issuance of notice under Section 148 or 148A of the Act. Consequently, it would be impossible to determine the amount payable for settlement of the dispute under DTVSV Scheme which in terms of Section 90 of Finance (No. 2) Act, 2024 is based on the quantum of "disputed tax", "disputed penalty", "disputed interest" or "disputed fee." It is in this context that the FAQ No. 26 of CBDT Circular No. 12 of 2024 dated 15.10.2024 clarifies that in such cases DTVSV Scheme would be inapplicable. The FAQ 26 expressly indicates that it is in respect of writ petitions challenging notices issued under Section 148 or 148A of the Act. More importa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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