KANHAIYALAL SARAF V. PRINCIPAL COMMISSIONER OF INCOME TAX

WPT/65/2025

AI Insights

The case involves Kanhaiyalal Saraf, the petitioner, who sought to challenge the rejection of his appeal restoration by the ITAT. Initially, Saraf faced an adverse assessment which led to a series of appeals and the eventual withdrawal of his appeal to avail the Direct Tax Vivad se Vishwas Scheme, 2020. Despite fulfilling the scheme's conditions, his appeal was not restored, leading to the current writ petition under Article 226 of the Constitution. The petitioner argued that the technical grounds for rejecting his appeal restoration were unjust, especially given the circumstances of his compliance with the settlement scheme.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 669738 (HC-CHHATTISGARH)
• Appeal Type: High Court cases
• Pronouncement Date: 17-06-2025
• Assessment Year: misc
• Other Referred Cases: P.M. Paul vs. The State Tax Officer & Ors. {Special Leave Petition (Civil) Diary No(s). 8386/2023}
• Laws Referred To: Article 226 of the Constitution of India, Income-tax Act, 1961, Vivad se Vishwas Scheme, 2020, Vivad se Vishwas Scheme, 2024
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: AJAY KUMRANI
• Assessee Lawyers: MOHIT KUMAR
• Keywords: Appeal Withdrawal; Income Tax; Settlement Scheme; Technical Grounds; Writ petition
• Section: 254(2)

Judgement Text

"1 2025:CGHC:24978 NAFR HIGH COURT OF CHHATTISGARH AT BILASPUR WPT No. 65 of 2025 1 - Kanhaiyalal Saraf S/o Shri Tulsi Ram Aged About 61 Years R/o Sadar Road, P.S. P.O. Tahsil Ambikapur Distt. Surguja (C.G.). ... Petitioner(s) versus 1 - Principal Commissioner Of Income Tax Raipur-1 Aaykar Bhawan, Civil Lines, P.S., P.O., Tah And Distt. Raipur (C.G.). ... Respondent(s) For Petitioner(s) : Shri Mohit Kumar, Advocate. For Respondent(s) : Shri Ajay Kumrani appears on behalf of Shri Amit Chaudhari, Advocates. Hon'ble Shri Justice Deepak Kumar Tiwari Order on Board 17/06/2025 1. This Writ Petition has been filed under Article 226 of the Constitution of India for the following relief(s):- i- To call for the relevant records of the respondents for its kind perusal. ii- To quash the impugned order passed on 10.02.2025 under section 254(2) of the Income-tax Act, 1961 and AVINASH SHARMA Digitally signed by AVINASH SHARMA Date: 2025.06.18 14:33:57 +0530 2 restore the second appeal ITA No.172/RPR./2017 to the file of said authority. iii- To direct Respondent to keep window open for filing of declaration under VSV Act, 2024 till disposal of the petition. iv- To pass such other and/ or further order and/or orders as the Hon'ble High Court may deem fit and proper in the facts and circumstances of the case. 2. Brief facts of the case are that against petitioner/assessee, an assessment order was passed on 28.03.2013, against which, assessee preferred an appeal before the Commissioner of Income Tax (Appeals) {for short “CIT(A)”} on 25.04.2013 which came to be dismissed vide order dated 25.03.2017, against which, petitioner filed second appeal before the Income Tax Appellate Tribunal, (for short “ITAT”) Raipur being ITA No.172/RPR/2017. Meanwhile, Government of India notified the Direct Tax Vivad se Vishwas Scheme, 2020. For availing the aforesaid settlement scheme, petitioner, as per the mandatory condition, applied for withdrawal of the appeal which was withdrawn vide order dated 02.07.2021. Petitioner has also paid taxes on disputed arrears on 21.10.2022 and 23.12.2022. Petitioner filed Form No.4 intimating payment of taxes to the Principal Commissioner of Income Tax, Raipur-1 and requested for issuance of Form 5 on 10.07.2024. Petitioner had also filed Form-1 under Vivad se Vishwas Scheme, 2024 on 24.11.2024, however, learned Principal Commissioner of Income 3 Tax, Raipur-1 rejected Form-1 vide order dated 28.11.2024, as no appeal was pending as on 22.07.2024. Petitioner filed Miscellaneous Application to recall ITA No.172/RPR/2017 and the same was also rejected by the Tribunal on the ground of delay in filing the application vide order dated 10.02.2025. Hence this Petition. 3. Learned counsel for the petitioner would submit that he had applied for withdrawal of the appeal pending before the ITAT as a pre-condition for availing the benefit under the said scheme. He further submits that when the appellant was not allowed the benefit under the said scheme, then his appeal ought to be heard on merits but his application for restoration of the appeal has also not been allowed only on the technical grounds, which is not sustainable. He places reliance on the judgment dated 01.09.2023 rendered by Hon’ble Supreme Court in the matter of P.M. Paul vs. The State Tax Officer & Ors. {Special Leave Petition (Civil) Diary No(s). 8386/2023}. 4. Per contra, learned counsel for the respondent would support the order impugned. 5. In the case at hand, the petitioner/assessee had applied for withdrawal of the appeal only as a pre-condition for availing the said benefit, however, for one or another reason, the same could not be entertained, therefore, this Court is of the opinion that appeal preferred by the petitioner ought to have been heard on merits. 4 6. In view of the aforesaid, the ITAT is directed to restore the appeal bearing ITA No. 172/RPR/2017 and the Authority shall decide the said appeal on merits, unless the petitioner is able to get benefit under any scheme of the Department. 7. With the aforesaid observation/direction, this Petition stands disposed of. Sd/- (Deepak Kumar Tiwari) Judge Avinash "