Tax Revision Petitions Revive Automatically on Default Under DTVSV Act: J&K and Ladakh High Court

The High Court of Jammu & Kashmir and Ladakh has held that revision petitions withdrawn under the Direct Tax Vivad Se Vishwas (DTVSV) automatically revive by operation of law if the declarant fails to comply with payment conditions. The bench of Chief Justice Arun Palli and Justice Rajnesh Oswal set aside an order rejecting an assessee’s application under the DTVSV Scheme, 2024 and directed authorities to extend the benefit of the scheme. The case arose from assessment proceedings for Assessment Year 2011–2012. The Income Tax Department had passed an order under Sections 144/147 of the Income Tax Act, 1961, raising a tax demand of ₹29.73 lakh against the petitioner. A separate penalty of ₹10.62 lakh was imposed under Section 271(1)(c) for alleged concealment of income. Challenging both orders, the petitioner filed revision petitions under Section 264 of the Act before the revisional authority. During the pendency of those revisions, the Government introduced the Direct Tax Vivad Se Vishwas Act, 2020 to settle pending tax disputes. The petitioner filed the required declaration (Forms 1 and 2), and Form 3 was issued determining the payable amount. The revision petitions were thereafter disposed of as withdrawn. However, the petitioner failed to deposit the amount within the stipulated and extended timelines and did not file Form 4, rendering his declaration ineffective under the 2020 Act. In 2024, the Government reintroduced the DTVSV Scheme, providing another opportunity for dispute resolution, subject to the condition that litigation must be pending as on 22.07.2024. The petitioner once again applied under the 2024 Scheme. However, the designated authority rejected the application on January 10, 2025, holding that no revision petition was pending on the cut-off date, as the earlier petitions had already been disposed of in March 2021. This rejection order was challenged before the High Court. The central question before the Court was whether revision petitions deemed withdrawn under the DTVSV Act, 2020 automatically revive upon failure to comply with payment conditions under Section 4(6) of the Act? The petitioner argued that Section 4(6) creates a legal fiction: if a declarant violates the conditions or fails to act in accordance with the undertaking, the declaration is presumed never to have been made, and all proceedings withdrawn under Section 4 stand revived automatically. The Department contended that revival does not apply to proceedings initiated by the assessee and that since the revision petitions had been formally disposed of in 2021, nothing was pending on the cut-off date in 2024. The Bench examined Section 4 of the DTVSV Act, 2020 in detail and made the key findings. Upon filing of declaration and issuance of Form 3, pending appeals or revisions are deemed withdrawn by operation of law. Section 4(6) provides that if the declarant violates the conditions, the declaration is presumed never to have been made. In such cases, “all the proceedings and claims which were withdrawn” are deemed revived. Rejecting the Department’s narrow interpretation, the Court held that the expression “all the proceedings and claims” does not distinguish between those initiated by the Department and those filed by the assessee. Had the legislature intended such a limitation, it would have expressly provided so. The Bench emphasized that a plain and harmonious reading of Section 4(6) requires restoration of parties to their original legal position upon default. The Court categorically held that once the petitioner failed to comply with the payment conditions under Form 3, the legal fiction under Section 4(6) came into play. As a result the declaration stood treated as never made. The revision petitions stood automatically revived. The legal position reverted to what existed prior to the filing of the declaration. Therefore, the Court found that revision proceedings were indeed pending in the eyes of law on the cut-off date, rendering the petitioner eligible under the DTVSV Scheme, 2024. The Court held that the rejection order dated 10.01.2025 suffered from a “manifest error of law” as it failed to consider the statutory consequence of automatic revival under Section 4(6). Accordingly, the impugned order was set aside. The court directed the petitioner to approach the authorities within 30 days to complete necessary formalities under the DTVSV Scheme, 2024, including in respect of both tax arrears and penalty. The authorities have been directed to process and grant the benefit within a further 30 days upon compliance. Case Details Case Title: Vidya Sagar Sharma Versus Union of India and others Case No.: WP(C) No. 536/2025 Date: 13/02/2026 Counsel For Petitioner: Ajay Gandotra, Advocate Counsel For Respondent: Suraj Singh Wazir, Advocate Click Here To Read Order Read More: Beedi Rollers Are ‘Employees’ Under EPF Act Despite Intermediary Arrangement: Madras High Court

Tax Revision Petitions Revive Automatically on Default Under DTVSV Act: J&K and Ladakh High Court

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