Sharen Nitin Naik vs Principal Commissioner of Income Tax W.P. NO. 118/2024, Bombay High Court, Goa Bench, Decided on 28th January 2026

The Bombay High Court at Goa allowed the writ petition filed by Smt. Sharen Nitin Naik and set aside the order rejecting her application under the Direct Tax Vivad Se Vishwas Scheme, 2020, holding that the rejection was arbitrary, legally unsustainable, and contrary to the object of the Scheme.

The Court held that where spouses are governed by Section 5A of the Income Tax Act (Portuguese Civil Code regime), income constitutes a single community income and once the dispute relating to such income is settled in the hands of one spouse, it cannot independently survive against the other. The Court noted that although the petitioner had not filed a separate appeal against the assessment order, her appeal against the penalty order was admittedly pending, which satisfied the requirement of a “pending dispute” under the Scheme, whose definition must be interpreted broadly.

Since the petitioner’s husband had already been granted relief under the Scheme on the same disputed income, denial of similar benefit to the petitioner was held to be discriminatory and perverse. Accordingly, the impugned order was quashed, and the authorities were directed to process the petitioner’s declaration under the Scheme and issue consequential forms within the prescribed timelines.