Direct Tax Vivad Se Vishwas Act | Revival On Default Applies To Proceedings Initiated By Both Department And Assessee: J&K&L High Court
Aleem Syeed
13 March 2026 7:35 PM IST
The Jammu & Kashmir and Ladakh High Court has held that under the Direct Tax Vivad Se Vishwas Act, 2020, failure to comply with the conditions of the scheme results in automatic revival of all proceedings withdrawn earlier, irrespective of whether they were initiated by the assessee or the Income Tax Department.
A Division Bench of Chief Justice Arun Palli and Justice Rajnesh Oswal ruled that Section 4(6) of the act applies to “all proceedings and claims” without distinction, and therefore revival operates by law even in respect of revision petitions filed by the assessee.
"A plain reading of Section 4(6) of the Act of 2020 refutes this restrictive interpretation. The provision encompasses 'all the proceedings and claims' without distinction; it does not differentiate between those initiated by the Assessee and those by the Income Tax Authority. Had the Legislature intended to limit the scope of 'revival' solely to Departmental actions, it would have employed specific qualifying language to that effect."
The petitioner had challenged an assessment order passed under Sections 144 and 147 of the Income Tax Act, 1961 for the Assessment Year 2011-12, which created a tax demand of ₹29.73 lakh, along with a penalty of ₹10.62 lakh under Section 271(1)(c). Two revision petitions were filed under Section 264 before the revisional authority.
During the pendency of those petitions, the petitioner-assessee, Vidya Sagar Sharma, opted for the Direct Tax Vivad Se Vishwas Act, 2020 and submitted the prescribed forms. Form-3, determining the payable amount, was issued on March 4, 2021, following which the revision petitions were disposed of as withdrawn.
However, the petitioner failed to deposit the determined amount within the stipulated time.
The Court noted that Section 4(6) of the Act provides that if the declarant fails to comply with the conditions of the scheme, the declaration is deemed never to have been made, and all proceedings withdrawn earlier stand revived automatically.
Rejecting the Revenue's argument that revival applies only to departmental proceedings, the Bench observed that Section 4(6) covers “all proceedings and claims” without distinction and therefore includes proceedings filed by the assessee as well.
The Court held that the Sharma's revision petitions stood revived automatically upon failure to comply with the payment condition. Consequently, the order rejecting the petitioner's claim under the 2024 scheme was set aside.
He was granted 30 days to approach the authorities to complete the necessary formalities for availing the benefits under the later dispute settlement scheme.
For Respondent: Advocate Suraj Singh Wazir