The Assessing Officer cannot rectify a final tax determination order

The Assessing Officer cannot rectify a final tax determination order passed under the DTVSV Act.

Issue

Whether the Assessing Officer has the jurisdiction under Section 154 of the Income-tax Act to rectify a tax determination certificate issued by the Principal Commissioner under Section 5(2) of the Direct Tax Vivad se Vishwas (DTVSV) Act, 2020 based on a subsequent audit objection.

Facts

The Principal Commissioner passed a final settlement order and issued a certificate under Section 5(2) of the DTVSV Act, 2020.
Following this, an audit objection was raised alleging that the tax amount in the original settlement certificate had been calculated incorrectly.
Based on this audit objection, the Assessing Officer passed a rectification order under Section 154 of the Income-tax Act, 1961 to modify the amount determined under the 2020 Act.
The legislative framework of the DTVSV Act, 2020 does not grant rectification powers to the Assessing Officer, nor does it give such powers to the Principal Commissioner.
Section 5(3) of the DTVSV Act, 2020 explicitly states that the amount determined and the order passed under this scheme shall be final and conclusive.

Decision

Held, in favour of the assessee: The rectification order passed by the Assessing Officer under Section 154 is completely contrary to law and is quashed.
Finality of the Special Scheme: The provisions of the Income-tax Act, 1961 regarding rectification have not been made applicable to orders finalized under the DTVSV Act, 2020.
Lack of Jurisdiction: Since Section 5(3) of the special Act grants absolute finality to the settlement, the Assessing Officer lacks the inherent jurisdiction to alter or reopen the determination.

Key Takeaways

Special Acts Override General Laws: The DTVSV Act is a specific, self-contained dispute resolution scheme. Its provisions override the general rectification and assessment powers contained in the standard Income-tax Act.
Conclusive Finality Means No Reopening: When a statutory scheme declares an order to be “final and conclusive,” it creates a legal bar that prevents the Revenue from using tools like audit objections or rectification notices to alter the agreed settlement.
Assessing Officer Cannot Review Superior Orders: An Assessing Officer cannot use Section 154 to modify or correct an order passed by a superior authority like the Principal Commissioner under a special administrative scheme.

HIGH COURT OF DELHI

Gail (India) Ltd.

Assistant Commissioner of Income-tax^*

Dinesh Mehta and Vinod Kumar, JJ.

W.P.(C) No. 1883 OF 2026
CM APPL. 9154 and 9155 OF 2026

MAY 4, 2026

Rohit Jain and Samarth Choudhary, Advs. for the Petitioner. Gaurav Gupta, SSC, Shivendra Singh and Yojit Pareek, JSCs for the Respondent.

ORDER

1. By way of present writ petition, the petitioner has challenged the order dated 05.01.2026 passed by respondent no.1 under Section 154 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act of 1961’).

2. Mr. Rohit Jain, learned counsel for the petitioner at the outset submitted that the impugned order passed in exercise of the purported powers of rectification given under Section 154 of the Act of 1961 is wholly without jurisdiction and illegal on various counts.

3. He submitted that what has been rectified by the Assessing Officer vide impugned order dated 05.01.2026 is, the order dated 01.11.2021 issued by the Principal Commissioner of Income Tax as per Section 5(2) of the Direct Tax Vivad se Vishwas Act of 2020 (hereinafter referred to as ‘the Act of 2020’).

4. He submitted that the order which has been passed by the Principal Commissioner of Income Tax, if at all could be rectified, could be rectified by the Principal Commissioner of Income Tax himself and not by the respondent no.1.

5. He further submitted that the invocation of provision under Section 154 of the Act of 1961 is per se misconceived inasmuch as the order passed by the Principal Commissioner of Income Tax on 01.11.2021 was passed under the Act of 2020, which does not make Section 154 of the Act of 1961 applicable.

6. In support of the aforesaid, he relied upon a judgment of this Court rendered in the case of Satish Kumar Dhingra v. CIT 467 ITR 574 (Delhi).

7. Mr. Gaurav Gupta, learned Senior Standing Counsel, on the other hand submitted that the impugned rectification order was necessitated, as the Assessing Officer came to receive an audit objection indicating therein that the amount to be paid under the scheme was wrongly calculated by the respondent at the time of issuance of certificate under the Act of 2020.

8. He further submitted that the judgment of this Court in the case of Satish Kumar Dhingra (supra) is distinguishable from the present case on facts.

9. Heard learned counsel for the parties and perused the record.

10. A simple look at the order dated 05.01.2026 shows that the respondent no.1 has sought to rectify an order which was passed by Principal Commissioner of Income Tax.

11. We further observe that the scheme of the Act of 2020 does not give any power of rectification even to the Principal Commissioner of Income Tax. The provision contained under Section 5(3) of the Act of 2020 clearly provides that the amount determined and order passed under the Scheme shall be final and conclusive. Provisions of the Act of 1961 have not been made applicable by the Act of 2020.

12. The order impugned dated 05.01.2026 is clearly contrary to the provisions of the Act of 2020 and is, therefore, liable to be quashed and set aside. Similar is the view taken by this Court rendered in the case of Satish Kumar Dhingra (supra).

13. The writ petition is, therefore, allowed. The order dated 05.01.2026 passed by respondent no.1 is quashed and set aside.

14. The writ petition is disposed of alongwith pending applications.