HUF Gets Relief as Madras HC Orders Acceptance of Vivad Se Vishwas Claim Despite Initial Rejection [Read Order]

The Madras High Court has directed the Income Tax Department to accept the declaration filed by a Hindu Undivided Family (HUF) under the Direct Tax Vivad Se Vishwas (DTVSV) Scheme, 2024, and issue Form-2, despite an earlier rejection based on a technical ground. The Court held that once the appeal had been revived by the Income Tax Appellate Tribunal (ITAT), the HUF was entitled to avail of the scheme as the appeal was pending as on the relevant date.

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The petitioner, Ramasamy HUF, represented by its Kartha, Sakthivel Ramasamy, had filed a writ petition seeking a mandamus to the Principal Commissioner of Income Tax-3 to accept Form-1 dated 26 December 2024 for the assessment year 2014–15 under the DTVSV Scheme and issue the corresponding Form-2. The HUF had previously paid Rs. 52,970 towards tax arrears and received Form-3 in April 2021. Believing that the process under the 2020 scheme was complete, the petitioner failed to submit Form-4, unaware that it was a mandatory step to complete the settlement.

In the meantime, the Commissioner of Income Tax (Appeals) dismissed the petitioner’s income tax appeal on 9 June 2023 on the mistaken assumption that the DTVSV Scheme had already been availed. A rectification petition filed by the department clarifying that the petitioner had not completed the scheme was also dismissed. The petitioner then filed an appeal before the ITAT, which by a common order dated 25 November 2024 set aside the CIT(A)’s order and revived the original appeal, holding that the earlier dismissal was ex parte and without proper opportunity of hearing.

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Following this revival, and with the 2024 version of the DTVSV Scheme coming into force from 22 July 2024, the petitioner once again submitted Form-1 under the new scheme on 26 December 2024. However, the application was rejected by the designated authority through an online portal message stating that no appeal was pending as on 22 July 2024.

Justice Krishnan Ramasamy, deciding the case on 23 April 2025, held that in view of the ITAT’s order reviving the appeal, and in light of Section 4(6) of the DTVSV Act, 2020, all proceedings and claims stood restored and the petitioner was therefore entitled to avail of the scheme. The Court directed the Principal Commissioner to accept Form-1 and issue Form-2 by 28 April 2025, taking note of the impending expiry of the deadline.

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The writ petition was disposed of with a direction to comply with the order immediately. No costs were awarded.

To Read the full text of the Order CLICK HERE

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