The Allahabad High Court has held that once an assessee is issued Form-5 under Vivad Se Vishwas Act 2020, it is not required for them to fill Form-26B under the Income Tax Act 1961 to claim refund.

The Court was considering a Writ Tax Petition seeking refund of ₹2,19,42,954/- as amount of tax arrears refundable to the petitioner as per the order of full and final settlement of tax arrears in Form 5 issued under Section 5(2) read with Section 6 of the Vivad Se Vishwas Act, 2020 along with interest under Section 244A of the Income Tax Act, 1961.

The division-bench of Chief Justice Arun Bhansali and Justice Kshitij Shailendra observed, "After filing of the present petition, after a passage of two years, it did not lie on the respondents that the petitioner was required to fill Form 26B of the Income Tax Rules for seeking the refund. The said action of the respondents, has no basis inasmuch as once Form 5 under the VSV Act, 2020 was issued entitling the petitioner to a refund of Rs.2,19,42,954/-, there was no question of the respondents then requiring to file Form 26B as now sought to be demanded by the respondents.."

The Petitioner was represented by Advocate Vivek Sarin while the Respondent was represented by Advocate Gaurav Mahajan.

The facts of the case are that the TDS Return was filed by the Petitioner for F.Y. 2008-09, which was taken up for assessment by the assessing officer and after the assessment proceedings were concluded, a total demand of ₹40,56,14,101/- under Section 201/201(1-A) of the Act, 1961 was raised on the alleged short payment of TDS along with interest.

The demand was challenged by the petitioner before the first appellate authority, who by order dated 21.8.2013 allowed the appeal and remanded the matter back for fresh assessment. The assessing officer by the revised assessment order imposed total demand of Rs.2,25,48,341/- for F.Y. 2008-09. A demand notice under Section 156 of the Act, 1961 withholding refund equivalent to demand of Rs.2,25,48,341/- was passed. The revised assessment was challenged by the petitioner before the Income Tax Appellate Tribunal dismissed the appeal filed by the petitioner. The order passed by the I.T.A.T. was challenged. In the meanwhile, the Central Government notified the VSV Act, 2020 to provide for resolution of tax disputes.

The petitioner by submitting Form 1 & 2 applied for the settlement of disputed tax for F.Y. 2008-09 under the VSV Act, 2020 inter-alia indicating the amount payable under the VSV Act, 2020 at Rs.6,05,387/-. The application was accepted and certificate in Form 3 was issued determining ₹2,19,42,954/- as amount refundable to the petitioner. As required, the petitioner filed declaration of advance payment in Form 4 based on which a certificate was issued. The Petitioner withdrew the pending Income Tax Appeal and the Respondents issued order for full and final settlement of tax arrears under Section 5(2) of the VSV Act, 2020 in Form 5, indicating refundable sum of ₹2,19,42,954/-. However, the amount was not refunded as determined despite Several follow ups and representations made to the respondents seeking refund along with interest. When Petitioner received no response, the present relief was sought.

Standing Counsel for the Respondents submitted that after filing of the Writ Petition, a communication was issued to the Petitioner requesting the company to submit their claim for refund of excess TDS in prescribed Form 26B through online functionality provided in TRACES so that further necessary action may be taken by the office and that if the petitioner does the needful, the refund would be paid to it.

It was further submitted that under the provisions of Section 7 of the VSV Act, 2020 no interest is payable. The Counsel also submitted that the plea raised by the Respondents is de-hors the provisions of the VSV Act, 2020 and Act, 1961. It was averred that the Ptitioner was seeking refund based on the provisions of VSV Act, 2020 whereby Form 5 indicating the amount refundable has been issued way back in 2022 and the Respondents are bound to return the amount based on the said Form 5 along with interest under Section 244A of the Act, 1961 and the plea raised pertaining to the submission of Form 26B for seeking refund has been raised only with a view to deprive the petitioner of interest to which it is otherwise entitled.

Reliance was placed on Dwejesh Acharya v. Income-tax Officer : [2023] 157 taxmann.com 332 (Rajasthan).

The Court found that the Petitioner wasn't required to fill for Form-26B under the Income Tax Act 1961 as he was already issued Form-5 under Vivad Se Vishwas Act 2020.

The Petition was accordingly allowed.

Cause Title: Dish TV India Limited vs. Commissioner of Income Tax (TDS) and 2 Others (2024:AHC:189085-DB)

Appearances:

Petitioner- Advocate Vivek Sarin, Advocate Divyanshi Singh, Advocate Harsh Vardhan Gupta

Respondent- Advocate Gaurav Mahajan, Advocate Manu Ghildyal

Click here to read/ download Order:









Allahabad High CourtChief Justice Arun BhansaliJustice Kshitij Shailendra

Sheetal Joon