Andhra Pradesh High Court: Revised Form-3 Cannot Impose a Payment Deadline That Has Already Passed — Compliance Held "Humanly Impossible"

Background and Context

The Andhra Pradesh High Court, in Writ Petition No. 32115 of 2023, delivered a significant ruling on 24.08.2026 in the matter of N. Venu Gopal Reddy Vs Union of India and Others, addressing a fundamental question of administrative fairness and statutory compliance under the Direct Tax Vivad se Vishwas Act, 2020. The Court allowed the writ petition and set aside the impugned demand notice as well as the interest order, directing the revenue authorities to issue Form-5 within six weeks.

The case arose from a peculiar situation where tax authorities, after acknowledging their own computational error in the original Form-3, issued a revised Form-3 on 29.10.2021 — yet required the assessee to make payment by 30.09.2021, a date that had already elapsed by the time the revised certificate was issued. The Court found this condition to be fundamentally untenable.

Facts of the Case

The Original Assessment and Appeal

The assessee, engaged in the business of works contracts and registered under the Income Tax Act, 1961, was subjected to a search operation on his premises. Following the search, the revenue authorities completed an assessment and raised a tax demand of Rs.29,60,420/- by way of an assessment order dated 28.03.2014, passed under Section 143(3) read with Section 254 of the Income Tax Act, 1961.

Aggrieved by this assessment, the assessee preferred an appeal before the appropriate appellate authority. When the Government of India introduced the Direct Tax Vivad se Vishwas Scheme (DTVSV Scheme), the assessee took the opportunity to withdraw his pending appeal with liberty to apply under the scheme, which offers resolution of income tax disputes through payment of the disputed tax amount without imposition of interest or penalty.

Filing of Form-1 and Issuance of Initial Form-3

The assessee approached the designated authority expressing his intent to avail the scheme and filed his declaration in Form-1 on 23.12.2020. Upon processing the declaration, the 2nd respondent authority issued a certificate in Form-3 dated 29.01.2021, specifying the amounts payable for full and final settlement:

  • Rs.25,96,438/- if paid on or before 31.03.2021
  • Rs.28,56,082/- if paid after 31.03.2021

Discrepancy Noticed and Rectification Sought

The assessee identified computational discrepancies in the initial Form-3 and, by a letter dated 12.02.2021, approached respondent Nos. 2 and 3 seeking rectification of the errors so that correct payments could be made. While awaiting a response, and noting that the deadline under the scheme stood at 30.09.2021, the assessee made certain interim payments during the intervening period.

Issuance of Revised Form-3

The revenue authorities eventually acknowledged the errors in computation and issued a revised Form-3 dated 29.10.2021, revising the payable amounts as follows:

  • Rs.23,36,812/- if paid on or before 30.09.2021
  • Rs.25,70,493/- if paid after 30.09.2021