– v. ….The Principal Commissioner Of Income Opposite Parties Tax, Central Circle, Vishakapatnam And Others

Order No. 01. IN THE HIGH COURT OF ORISSA AT CUTTACK W.P.(C) No.12426 of 2025 …. Ghanshyam Dalmia Petitioner –Represented by Adv.Mr. Sreejit Mohanty, Advocate -Versus- ….The Principal Commissioner of Income Opposite Parties Tax, Central Circle, Vishakapatnam and others –Represented by Adv.Mr. S.S. Mohapatra, Senior Standing Counsel Mr. S.C. Mohanty, Advocate CORAM: HON’ BLE THE CHIEF JUSTICE AND HON’BLEMR. JUSTICE MURAHARI SRI RAMAN ORDER 06.05.2025 1. The petitioner availed the remedy available under the Direct Tax Vivad Se Vishwas (DTVSV) Scheme, 2024 in respect of an assessment order dated 2[nd] May, 2023 passed by the assessing officer in relation to the assessment year 2014-15. 2. The prelude to availing the benefits under the aforesaid Scheme pertains to the processing of an application declaring the income under Section 143 (1) of the Income Tax Act, 1961 for the assessment year 2014-15, but on the basis of an information with regard to certain claims, the survey operation under Section 133A of the Income Tax Act was conducted on 5[th] December, 2015 by the DDIT (Inv.), Rourkela at the registered address of the two companies in which the assessee appears to be a Managing Director and the report so submitted was forwarded for a necessary action to be taken in this regard. 3. By an assessment order dated 2[nd] May, 2023, the assessing officer arrived at the conclusion that the claim of long term capital gain under Section 10 (38) was found to be bogus and the sale consideration amount in respect of the aforesaid two companies introduced/credited by the assessee against the sale of the scrips of the abovementioned companies during such financial year in his capital account as his income being unexplained, a separate penalty proceeding to be initiated for furnishing the inaccurate particulars of the income. The authority thereafter proceeded to assess the income under Section 147 read with Section 144B of the Income Tax Act and a separate proceeding was initiated under Section 271 (1) (c) of the said Act for furnishing the inaccurate particulars of income. 4. Admittedly, the petitioner challenged the said order before the CIT (Appeals) which is pending for final adjudication. Amidst the pendency of the said statutory appeal, an application was made under the DTVSV Scheme which was floated in the year 2024 and by the impugned order dated 4[th] February, 2025 uploaded on the website, such application is rejected as the aforementioned proceedings were initiated on the basis of a search conducted under Section 132 of the said Act and, therefore, it comes within the ambit of Section 96 of the said Scheme. 5. Before we proceed, it would be apposite to quote Section 96 of the said Scheme which runs thus: “—96. The provisions of this Scheme shall not apply —(a) in respect of tax arrear, (i) relating to an assessment year in respect of which an assessment has been made under sub-section (3) of section 143 or section 144 or section 147 or section 153A or section 153C of the Income-Tax Act on the basis of search initiated under section 132 or section 132A of the Income-tax Act; (ii) relating to an assessment year in respect of which prosecution has been instituted on or before the date of filing of declaration; (iii) relating to any undisclosed income from a source located outside India or undisclosed asset located outside India; (iv) relating to an assessment or reassessment made on the basis of information received under an agreement referred to in section 90 or section 90A of the Income-tax Act, if it relates to any tax arrear; (b) to any person in respect of whom an order of detention has been made under the provisions of the Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974 on or before the date of filing of declaration: —Provided that (ii) relating to an assessment year in respect of which prosecution has been instituted on or before the date of filing of declaration; (iii) relating to any undisclosed income from a source located outside India or undisclosed asset located outside India; (iv) relating to an assessment or reassessment made on the basis of information received under an agreement referred to in section 90 or section 90A of the Income-tax Act, if it relates to any tax arrear; (b) to any person in respect of whom an order of detention has been made under the provisions of the Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974 on or before the date of filing of declaration: —Provided that (i) such order of detention, being an order to which the provisions of section 9 or section 12A of the said Act do not apply, has not been revoked on the report of the Advisory Board under section 8 of the said Act or before the receipt of the report of the Advisory Board; or (ii) such order of detention, being an order to which the provisions of section 9 of the said Act apply, has not been revoked before the expiry of the time for, or on the basis of, the review under sub-section (3) of section 9, or on the report of the Advisory Board under section 8, read with sub-section (2) of section 9 of the said Act; or (iii) such order of detention, being an order to which the provisions of section 12A of the said Act apply, has not been revoked before the expiry of the time for, or on the basis of, the first review under sub-section (3) of that section, or on the basis of the report of the Advisory Board under section 8 read with sub-section (6) of section 12A, of the said Act; or (iv) such order of detention has not been set aside by a court of competent jurisdiction; (c) to any person in respect of whom prosecution for any offence punishable under the provisions of the Unlawful Activities (Prevention) Act, 1967, the Narcotic Drugs and Psychotropic Substances Act, 1985, the Prohibition of Benami Property Transactions Act, 1988, the Prevention of Corruption Act, 1988, the Prevention of Money-laundering Act, 2002, has been instituted on or before the filing of the declaration or such person has been convicted of any such of offence punishable under any of those Acts; (d) to any person in respect of whom prosecution has been initiated by an income-lax authority for any offence punishable under the provisions of the Bharatiya Nyaya Sanhita, 2023 or for the purpose of enforcement of any civil liability under any law for the time being in force, on or before the filing of the declaration or such person has been convicted of any such offence consequent to the prosecution initiated by an income-tax authority; (e) to any person notified under section 3 of the Special Court (Trial of Offences Relating to Transactions in Securities) Act, 1992 on or before the date of filing of declaration.” 6. On a manifest reading of the aforementioned provision, it is aptly clear that the provision of the said Scheme indicated therein shall not apply in respect of a tax period relating to an assessment year in respect of which an assessment has been made under sub-Section (3) of Section 143 or Section 144 or Section 147 or Section 153A or Section 153C of the Income Tax Act, if initiated on the basis of a proceeding under Section 132 or Section 132A of the Income Tax Act. The order impugned indicates that the competent authority under the said Scheme proceeded to reject the said application perceiving the initiation of a proceeding being an outcome of a survey under Section 132 and, therefore, activated the provisions under Section 96 of the said Scheme. The order of the assessing officer evinced that the case was processed under Section 143 (1) of the Income Tax Act on a survey operation having done under Section 133A of the Income Tax Act and there is no reflection that such initiation was an outcome of the search under Section 132 or under Section 132A of the said Act. having done under Section 133A of the Income Tax Act and there is no reflection that such initiation was an outcome of the search under Section 132 or under Section 132A of the said Act. 7. In absence of any material justifying the formation of an opinion that the proceeding was initiated on a search under Section 132 of the Act, the authorities could not have surreptitiously arrived at the decision that it was the resulted effect of a search under Section 132 of the said Act. The assessing officer has vividly and exclusively indicated the genesis of the initiation of the proceeding being a survey operation under Section 133A and, therefore, we do not find any justification in the impugned order passed by the competent authority under the said Scheme to take a different view without recording any proper reasons in this regard. 8. Admittedly, the proceeding under Section 133A of the Income Tax Act is consciously omitted under Section 96 of the said Scheme and, therefore, the embargo created thereunder with regard to availment of the Scheme does not operate and, therefore, the order dated 4[th] February, 2025 impugned in the instant writ petition cannot be justified. 9. Accordingly, the order dated 4[th] February, 2025 is hereby quashed and set aside. The matter is relegated before the authority under the said Scheme to decide the matter afresh on merit on the basis of the documents made available to him. 10. The writ petition is accordingly disposed of. (Harish Tandon) Chief Justice (M.S. Raman) Judge S.K. Guin/PA Signature Not Verified Digitally SignedSigned by: ANISHA NANDADesignation: Junior StenographerReason: AuthenticationLocation: High Court of Orissa, CuttackDate: 08-May-2025 12:12:04