The Income Tax Appellate Tribunal (ITAT), Delhi Bench, in a decision pronounced through video conferencing, dismissed the tax appeal of Manish Garg HUF for the assessment year 2015-16. This case, registered as ITA No. 1907/Del/2019, highlights significant legal proceedings and the implications of the Vivad Se Vishwas scheme on longstanding tax disputes.
Manish Garg HUF appealed against the CIT (Appeals) order that denied benefits under Section 10(38) and added back a substantial amount under Section 68 of the Income Tax Act, 1961, relating to the sale of shares of M/s KAPPAC Pharma Ltd., amounting to Rs.2,22,87,246. The shares were deemed as accommodation entries by the Delhi High Court, identifying the company as bogus.
The hearing, scheduled for December 21, 2020, saw no appearance from the appellant, mirroring a similar absence during a prior hearing on December 1, 2020. The absence was noted alongside a letter dated March 12, 2020, from the appellant’s Chartered Accountant, indicating an intention to settle the dispute under the yet-to-be-announced Vivad Se Vishwas Scheme. The non-appearance and the intentions stated in the letter led to the technical withdrawal and dismissal of the appeal.
The case underscores the judiciary’s stance on disputes involving entities recognized as conduits for financial irregularities. Furthermore, it reflects on the broader implications of the Vivad Se Vishwas Scheme as a strategic tool for reducing litigation and providing a pathway to settle complex tax disputes amicably.
The dismissal of Manish Garg HUF’s appeal under the Vivad Se Vishwas scheme signifies a critical resolution mechanism in the Indian tax framework, encouraging more entities to opt for settlement rather than prolonged litigation. This case serves as a precedent for similar cases and highlights the importance of legal readiness and representation in tax-related disputes.
Dismissal of Tax Appeal by Manish Garg HUF Under Vivad Se Vishwas for AY 2015-16
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