TALHA AGENCY,MODASA V. PCIT-1, AHMEDABAD

ITA 279/AHD/2022

AI Insights

The case involves Talha Agency appealing against an order by the PCIT, Ahmedabad, which exercised revision jurisdiction under section 263 of the Income Tax Act, 1961, after the agency had already settled its tax disputes under the Vivad Se Vishwas Scheme. The Tribunal referenced a decision by the Gujarat High Court in PCIT vs. Mrs. Swatiben Biharilal Parekh, which supported the view that once disputes are settled under the Vivad Se Vishwas Scheme, they cannot be reopened. The Tribunal found that the PCIT's action to reopen the settled issue was not in accordance with the law, leading to the quashing of the PCIT's order.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 789936 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 4 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-11-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: misc
• Appeal Filed On: 14-07-2022
• Other Referred Cases: PCIT vs. Mrs. Swatiben Biharilal Parekh
• Laws Referred To: Income Tax Act, 1961, Direct Tax Vivad Se Vishwas Act, 2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RIGNESH DAS
• Assessee Lawyers: BIREN SHAH; GULAB THAKOR
• Section: 263; 6

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH, AHMEDABAD BEFORE: SHRI SANJAY GARG, JUDICIAL MEMBER AND SHRI NARENDRA PRASAD SINHA, ACCOUNTANT MEMBER आयकर अपील सं./I.T.A. No. 279/Ahd/2022 (िनधा[रण वष[ / Assessment Year : 2017-18) Talha Agency 1 Talha Agency, Old Market Yard Station Road, Modasa/Arvalli, Gujarat - 383315 बनाम/ Vs. PCIT-1 Ahmedabad Öथायी लेखा सं./जीआइआर सं./PAN/GIR No. : AAKFT5021C (Appellant) .. (Respondent) अपीलाथȸ ओर से /Appellant by : Shri Biren Shah & Shri Gulab Thakor, A.Rs. Ĥ×यथȸ कȧ ओर से/Respondent by : Shri Rignesh Das, CIT. DR Date of Hearing 03/09/2025 Date of Pronouncement 27/11/2025 (आदेश)/ORDER Per Sanjay Garg, Judicial Member: The present appeal has been preferred by the assessee against order passed by the Ld. Principal Commissioner of Income-Tax, PCIT, Ahmedabad-1 [hereinafter referred to as “Ld. PCIT”] dated 15.03.2022 under section 263 of the Income Tax Act, 1961 (\"the Act\" for short) pertaining to Assessment Year 2017-18. 2. The short issue involved in this appeal is as to whether the revision jurisdiction u/s.263 of the Act can be assumed by the Ld. Printed from counselvise.com ITA No. 279/Ahd/2022 [Talha Agency vs. PCIT] A.Y. 2017-18 - 2 – PCIT after the assessee has availed the benefit under the Direct Tax Vivad Se Vishwas Act, 2020 and settled the matter after paying due taxes. Admittedly, in this case, the assessee has availed the benefit of Vivad Se Vishwas Scheme under the Direct Tax Vivad Se Vishwas Act, 2020. The Ld. PCIT, thereafter, has exercised revision jurisdiction on the same issue u/s.263 of the Act. The issue is no more res integra as the same is covered by the decision of Jurisdictional Gujarat High Court in the case of PCIT vs. Mrs. Swatiben Biharilal Parekh, reported in [2023] 156 taxmann.com 267 (Guj.), wherein the Hon’ble Jurisdictional High Court has held that opting Vivad Se Vishwas Scheme and finalizing thereof is nothing but closure of disputes in respect of tax arrears which cannot be subsequently reopened by issuing notice u/s.263 of the Act for revising assessment order. It is pertinent to mention here that Section 5(3) of the Direct Tax Vivad Se Vishwas Act, 2020 states as under: “(3) Every order passed under sub-section (1), determining the amount payable under this Act, shall be conclusive as to the matters stated therein and no matter covered by such order shall be reopened in any other proceeding under the Income-tax Act or under any other law for the time being in force or under any agreement, whether for protection of investment or otherwise, entered into by India with any other country or territory outside India.” 3. Further, the Hon’ble Jurisdictional High Court in the case of PCIT vs. Mrs. Swatiben Biharilal Parekh (supra) has taken note of the relevant provision of the Direct Tax Vivad Se Vishwas Act, 2020 and held as under: “5. ……………………… Printed from counselvise.com ITA No. 279/Ahd/2022 [Talha Agency vs. PCIT] A.Y. 2017-18 - 3 – ……………………… 43. Section 6 of the Direct Tax Vivad Se Vishwas Act, 2020, makes it very clear that once there is a compliance with the timeliness 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 8 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 accepted with the issue of Form 3, the Impugned Notice seeking to re-open the assessment under section 263 of the Income-tax Act, 1961 could be justified.\" 10. In light of the facts and the decision of the Madras High Court, it was not open for the authorities to initiate proceedings under section 263 of the Act, especially when they were clearly so barred. We are also conscious of the fact that even if the appeal memo which is placed on record is seen, the matter in issue before the CIT (Appeals) which was sought to be brought to rest by opting for the benefit of the Scheme was in context of the same issue which the Revenue sought to invoke by issuing notice under section 263 of the Act. 6. The Tribunal therefore cannot be faulted for allowing the appeal of the assessee as it was not open for the authorities to initiate proceedings under section 263 of the Act, when they were barred.” 4. In view of this, the exercise of jurisdiction by the Ld. PCIT u/s.263 of the Act in this case is against the provision of Direct Printed from counselvise.com ITA No. 279/Ahd/2022 [Talha Agency vs. PCIT] A.Y. 2017-18 - 4 – Tax Vivad Se Vishwas Act, 2020. Therefore, the impugned order passed by the Ld. PCIT u/s.263 of the Act is not sustainable in the eyes of law and the same is hereby quashed. 5. In the result, appeal filed by the assessee stands allowed. This Order pronounced on 27/11/2025 Sd/- Sd/- (NARENDRA PRASAD SINHA) (SANJAY GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad; Dated 27/11/2025 S. K. SINHA True Copy आदेश कȧ Ĥितिलǒप अĒेǒषत/Copy of the Order forwarded to : 1. अपीलाथȸ / The Appellant 2. Ĥ×यथȸ / The Respondent. 3. संबंिधत आयकर आयुƠ / Concerned CIT 4. आयकर आयुƠ(अपील) / The CIT(A)- 5. ǒवभागीय Ĥितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाड[ फाईल / Guard file. आदेशानुसार/ BY ORDER, उप/सहायक पंजीकार (Dy./Asstt. Registrar) आयकर अपीलीय अिधकरण, अहमदाबाद / ITAT, Ahmedabad Printed from counselvise.com "