Income Tax Matters settled under DTVSV scheme cannot be Revised u/s 263: ITAT [Read Order]

The Bangalore bench of the Income Tax Appellate Tribunal (ITAT) has held that the revisional jurisdiction under section 263 of the Income Tax Act, 1961 cannot be invoked in respect of matters settled under the amnesty scheme, DTVSV.

The assessee, Shri Pavan Kandkur is a proprietor of the firm HVK Agencies, which is into the wholesale business of palm oil, sunflower oil and vegetable oil. The assessee filed the return of income for AY 2017-18 on 05.11.2017 declaring a total income of Rs.1,46,760/-. The case was selected for complete scrutiny under CASS for and especially verifying the cash deposits during the demonetization period.

The AO treated a sum of Rs.92,838/- as unaccounted cash credit under Section 68 of the Act and applied tax rate under Section 115BBE of the Act. The PCIT issued show cause notice in response to which the assessee made submissions wherein it was stated that he has applied for the Direct Tax Vivad Se Viswas (DTVSV) scheme and has filed a letter before the CIT(A) for withdrawal of his appeal filed against the order passed under Section 143(3) of the Act.

Shri N.V. Vasudevan, Vice President and Ms. Padmavathy S., Accountant Member, while considering a second appeal by the assessee, held that in assessee’s case the issue of cash deposits during the demonetisation period have been considered by the AO in original assessment proceedings under Section 143(3) of the Act and the assessee has opted for DTVSV scheme for the additions made in this regard. Section 8 of DTVSV Act as quoted by the PCIT, clearly mentions that the immunity is not available for any proceedings other than those in relation to which the declaration has been made.

“In the given case however the PCIT has initiated the revision proceedings u/s.263 on the same issue for which the assessee has already opted for DTVSV. It is also noticed the assessee has filed the necessary forms under the DTVSV scheme which have been accepted and therefore in our considered view the decision of the Hon’ble Madras High Court is clearly applicable to the assessee’s case. Accordingly we hold that the PCIT is not justified in initiating the impugned proceedings under Section 263 of the Act when the assessee has opted to settle the dispute under DTVSV scheme,” the ITAT said.

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