No Scope for Rectification Once DTVSV Form 5 Is Issued: HC

The taxpayer, a resident of Bhagalpur, had settled his disputed tax demand arising from a search assessment under Section 143(3)/153B through the Direct Tax Vivad se Vishwas Act, 2020 (DTVSV). The authority issued a final certificate (Form 5), confirming closure of the dispute.

Despite this, the Assessing Officer later issued a notice under Section 154, claiming an apparent mistake in the earlier computation, and sought to impose additional tax on supposed unexplained income under Sections 69/69A read with Section 115BBE. The petitioner’s request for a refund of excess tax was also rejected, leading to the filing of this writ petition.

Main Issue: Whether a tax liability previously settled under the Direct Tax Vivad se Vishwas Act, 2020 can be reopened or amended by an Assessing Officer using Section 154, and whether the finality of the settlement is violated if the excess payment is not refunded.

HC’s Order: The High Court allowed the petition, ruling that once a settlement under the Vivad se Vishwas Act reaches finality through Form 5, the Assessing Officer cannot invoke Section 154 to reopen or modify the settled dispute. The Court observed that neither FAQs nor internal circulars could override the binding effect of the Act’s provisions.

Applying principles of legislative finality and fair procedure, the Court quashed the impugned rectification orders and directed the department to refund the petitioner’s excess tax within four weeks along with statutory interest.

To Read Full Judgment, Download PDF Given Below