MERIT CREDIT CORPORATION LIMITED V. THE PRINCIPAL COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE

SCA/16238/2021

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The case involves Merit Credit Corporation Limited, the petitioner, challenging the inaction of the Principal Commissioner of Income Tax, Central Circle, the respondent, regarding the non-consideration of the petitioner's applications for re-issuance of revised Form 3 under the Direct Tax Vivad se Vishwas Act, 2020. The petitioner had initially filed a declaration under the Act to settle an appeal for the assessment year 2011-12, which involved a dispute over the computation of tax and a claimed refund. Despite multiple requests for reconsideration following a relevant CBDT circular, the respondent did not respond, prompting the petitioner to seek judicial intervention.

• Counselvise Citation: [2021] 140 COUNSELVISE.COM (IT) 749585 (HC-GUJARAT)
• Appeal Type: Others
• Pronouncement Date: 26-10-2021
• Assessment Year: misc
• Laws Referred To: Direct Tax Vivad se Vishwas Act, 2020, Income Tax Act
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: M R BHATT; KARAN SANGHAI
• Assessee Lawyers: TUSHAR HEMANI; VAIBHAVI PARIKH
• Keywords: Bogus business loss; Direct Tax Vivad Se Vishwas Act; Refund request; Re-issuance of revised Form 3; Settling appeal
• Section: 147; 143(3); 132; 132-A

Judgement Text

"C/SCA/16238/2021 ORDER DATED: 26/10/2021 IN THE HIGH COURT OF GUJARAT AT AHMEDABAD R/SPECIAL CIVIL APPLICATION NO. 16238 of 2021 ========================================================== MERIT CREDIT CORPORATION LIMITED Versus THE PRINCIPAL COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE ========================================================== Appearance: MR TUSHAR HEMANI with MS VAIBHAVI K PARIKH(3238) for the Petitioner(s) No. 1 MR MR BHATT with MR KARAN SANGHAI for the Respondent(s) No. 1 ========================================================== CORAM: HONOURABLE MS. JUSTICE SONIA GOKANI and HONOURABLE MR. JUSTICE HEMANT M. PRACHCHHAK Date : 26/10/2021 ORAL ORDER (PER : HONOURABLE MS. JUSTICE SONIA GOKANI) 1. By way of the present petition under Article 226 of the Constitution of India, the petitioner challenges the inaction on the part of the respondent of not considering the applications moved by the petitioner for re-issuance of revised Form 3 in relation to the declaration filed under the Direct Tax Vivad se Vishwas Act, 2020 (hereinafter referred to as ‘the Act’) for the assessment year 2011-12. 2. While framing the assessment under Section 143(3) read with Section 147 of the Act, the Assessing Officer, based on certain information, had treated the business loss as bogus. The appeal was preferred against the said assessment order Page 1 of 5 C/SCA/16238/2021 ORDER DATED: 26/10/2021 dated 29.12.2015 before the Commissioner of Income Tax (Appeals). According to the petitioner, there was neither any search under Section 132 of the Income Tax Act carried out at the premises of the petitioner nor any requisition was made under Section 132(A) of the Income Tax Act and the assessment for the year under consideration i.e. 2011-12 was framed under Section 143(3) of the Act. 2.1. On 17.03.2020, the Act received the assent of the President and the Act was enacted. 2.2. The petitioner chose to avail the benefit of the Act and filed a declaration in the prescribed forms on 29.12.2020 for settling the appeal for the said assessment year. The amount payable for settling the appeal was Rs. 88,61,351/-. The petitioner, in fact, had paid the taxes aggregating to Rs.1,03,24,750/-. According to the petitioner, he was entitled to the refund of Rs. 14,63,399/-. 2.3. The designated authority issued Form 3 on 11.01.2021 whereby the amount payable by the petitioner was worked out at Rs. 1,16,57,935/- and hence, the additional amount of Rs.13,33,185/- was worked out as against the claim of refund. In order to buy peace of mind, the said additional amount of Rs.13,33,185/- as quantified by the designated authority had Page 2 of 5 C/SCA/16238/2021 ORDER DATED: 26/10/2021 been paid. The immunity was granted to the petitioner in accordance with the scheme of the Act. 2.4. There were several representations received by the Government and CBDT for clarification with regard to the classification of the case as a search case. The petitioner also requested vide its letter dated 24.03.2021, after the circular was issued by the CBDT on 23.03.2021 being Circular No. 04 of 2021 and requested to re-issue Form 3 after considering the case of the petitioner as non-searched case. 2.5. The subsequent request of 31.03.2021 and lastly on 15.09.2021 have not been replied to and hence, this petition with the following prayers: - “(a) direct the Respondent to rectify the error crept in computing disputed tax after taking into account Circular No. 4/2021 issued by the CBDT on 23.03.21 and issue revised From 3 in relation to declaration filed under the Act for settling appeal pending before the Commissioner of Income-Tax (Appeals) for the Assessment Year 2011-12; (b) direct the Respondent to refund a sum of Rs.27,96,584/- legitimately due to the petitioner pursuant to filing of declaration under the Act for settling appeal pending before the Commissioner of Income-tax (Appeals) for Assessment Year 2011- 12 along with interest; (c) pending the admission, hearing and final disposal of this petition, direct the Respondent to refund a sum of Rs. 27,96,584/- legitimately due to the petitioner pursuant to filing of declaration Page 3 of 5 C/SCA/16238/2021 ORDER DATED: 26/10/2021 under the Act for settling appeal pending before the Commissioner of Income-Tax (Appeals) for Assessment Year 2011-12 along with interest; (d) Any other and further relief deemed just and proper be granted in the interest of justice; (e) to provide for the cost of this petition.” 3. We have heard learned Senior Advocate Mr. Tushar Hemani assisted by learned advocate Ms. Parikh for the petitioner. We have also requested learned Senior Advocate Mr. M.R.Bhatt assisted by learned advocate Mr. Karan Sanghai and without entering into the merits, we have chosen to dispose it of at an admission stage before issuance of the notice as the only request on the part of the petitioner is for the authority concerned to respond. 4. We have considered that thrice the petitioner has made a request to the authority concerned i.e. the respondent herein on dated 24.03.2021, 31.03.2021 and thereafter on 15.09.2021. None of these communications have been responded to. 5. Let the same be responded to within four (4) weeks from the date of receipt of copy of this order. 6. The Court has chosen not to enter into the merits. It is left to the authority concerned to decide in accordance with Page 4 of 5 C/SCA/16238/2021 ORDER DATED: 26/10/2021 law. It is only because there had been no response on the part of the authority concerned that the Court has chosen to direct the this to be decided. Respondent shall respond to the request of the petitioner in accordance with law without being influenced by disposed of this matter. 7. Petition is disposed of in above terms. (SONIA GOKANI, J) (HEMANT M. PRACHCHHAK,J) Bhoomi Page 5 of 5 "