The case ITA 5/DEL/2019 involved Samtex Fashions Ltd., G B Nagar, as the appellant, contesting against the Income Tax Officer (ITO), Ward-22(2), New Delhi. The appeal pertained to the assessment year 2014-15.
Samtex Fashions Ltd. filed the appeal on January 1, 2019, challenging the order of the Commissioner of Income Tax (Appeals)-8, New Delhi, dated October 31, 2018. The appeal was heard by the Delhi ‘D’ Bench of the Income Tax Appellate Tribunal (ITAT) on January 16, 2020, with the final order pronounced on January 28, 2020.
The appellant was aggrieved by the CIT(A)’s decision to decide the appeal ex-parte without considering the merits of the case. The primary contention was that the CIT(A) had passed the order without providing adequate opportunity for a hearing and without evaluating the substantive issues raised in the appeal.
The appeal was heard by a bench comprising Ms. Sushma Chowla, Vice President, and Shri R.K. Panda, Accountant Member. The appellant was represented by Sh. Salil Kapoor and Sh. Sumit Lal Chandani, Advocates, while the respondent was represented by Sh. Saras Kumar, Senior Departmental Representative.
On January 12, 2021, the appellant submitted a letter requesting the withdrawal of the appeal, citing their decision to resolve the tax dispute under the Vivad Se Vishwas Scheme, 2020. This scheme was introduced by the Government of India to provide a one-time opportunity for taxpayers to settle tax disputes amicably and avoid prolonged litigation.
The tribunal acknowledged the appellant’s request and dismissed the appeal. The order noted that the dismissal was subject to the caveat that if the tax arrears dispute for the relevant assessment year was not resolved under the Vivad Se Vishwas Scheme, the appellant could approach the tribunal for reinstitution of the appeal. The respondent had no objections to this arrangement.
The tribunal’s decision was guided by the provisions of Section 250(6) of the Income Tax Act, 1961, which mandates the CIT(A) to decide appeals after hearing both parties, stating the points for determination and providing reasons for the decision. The tribunal emphasized that the CIT(A) should not dismiss appeals for non-prosecution without a reasoned order addressing the merits of the case.
The decision to restore the appeal to the CIT(A) was based on ensuring that the appellant received a fair hearing and that the issues were resolved on their merits. The tribunal’s approach underscores the importance of procedural fairness and the right of taxpayers to have their grievances addressed adequately.
The case of ITA 5/DEL/2019 highlights the significance of the Vivad Se Vishwas Scheme in providing an effective mechanism for dispute resolution. The scheme offers a pathway for taxpayers to settle disputes without the need for extensive litigation, benefiting both taxpayers and the tax administration.
The tribunal’s decision to allow the withdrawal of the appeal under the scheme and the provision to reinstitute the appeal if necessary ensures that the taxpayer’s rights are protected while promoting the resolution of tax disputes. This case serves as a precedent for similar cases, illustrating the benefits of alternative dispute resolution mechanisms in the tax administration system.
Withdrawal of Appeal by Samtex Fashions Ltd. under Vivad Se Vishwas Scheme – ITA 5/DEL/2019
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