Reetu Finlease Pvt Ltd vs ITO Ward 21(2), New Delhi: Appeal Dismissed Under Vivad Se Vishwas Scheme – ITA 6089/DEL/2019

Case Analysis: Reetu Finlease Pvt Ltd vs ITO Ward 21(2), New Delhi

Case Number: ITA 6089/DEL/2019

Appellant: Reetu Finlease Pvt Ltd, New Delhi

Respondent: ITO Ward 21(2), New Delhi

Assessment Year: 2010-11

Case Filed On: 2019-07-17

Order Type: Final Tribunal Order

Date of Order: 2020-12-18

Pronounced On: 2020-12-18

Introduction

The case of Reetu Finlease Pvt Ltd vs. ITO Ward 21(2), New Delhi (ITA 6089/DEL/2019) pertains to the assessment year 2010-11. The appellant, Reetu Finlease Pvt Ltd, a private limited company based in New Delhi, filed an appeal against the Income Tax Officer (ITO), Ward 21(2), New Delhi, disputing the tax arrears determined by the Income Tax Department for the mentioned assessment year. The appeal was filed on July 17, 2019, following the company’s dissatisfaction with the order passed by the Commissioner of Income Tax (Appeals) [CIT(A)].

Background: Why the Case Was Filed

Reetu Finlease Pvt Ltd, a financial services company, was assessed for the year 2010-11 by the Income Tax Department. The assessment led to a tax demand, which the company contested, arguing that the assessment was incorrect and that the tax arrears were unjustified. Consequently, the company took the matter to the ITAT (Income Tax Appellate Tribunal) to seek a resolution, aiming for a reconsideration of the tax liability imposed by the department.

The key issues under dispute were related to the tax calculations and the company’s claim that certain amounts had been erroneously assessed. The appellant sought relief from the tribunal, arguing that the assessment order was flawed and that the company was liable for a lesser amount of tax than what had been demanded by the ITO.

The Legal Proceedings

Upon filing the appeal, the case was brought before the ITAT Delhi “Friday-A” Bench, presided over by Vice President Shri G.S. Pannu and Judicial Member Shri Sudhanshu Srivastava. The case was scheduled for a hearing on December 18, 2020, conducted via video conferencing due to the prevailing circumstances.

During the hearing, the appellant’s counsel, Ms. Somya Jain, submitted a letter dated September 12, 2020, on behalf of Reetu Finlease Pvt Ltd. The letter informed the tribunal that the company had opted to resolve the tax dispute under the Vivad Se Vishwas Scheme, 2020. This scheme was introduced by the Government of India to reduce litigation and allow taxpayers to settle their tax disputes by paying the disputed tax amount, thereby avoiding further penalties and interest.

In the letter, the appellant requested the withdrawal of the appeal in light of their decision to settle the tax arrears under the Vivad Se Vishwas Scheme. The counsel indicated that the appellant had decided to take advantage of the scheme to resolve the matter expeditiously and avoid prolonged litigation.

Tribunal’s Ruling and Order

After considering the appellant’s request, the tribunal acknowledged the decision of Reetu Finlease Pvt Ltd to settle the dispute under the Vivad Se Vishwas Scheme. As a result, the tribunal decided to consign the appeal to records and treated it as dismissed for statistical purposes.

However, the tribunal included a crucial caveat in its order. It stated that if the dispute relating to the tax arrears for the assessment year 2010-11 was not ultimately resolved under the Vivad Se Vishwas Scheme, Reetu Finlease Pvt Ltd would have the liberty to approach the tribunal for the reinstitution of the appeal. The tribunal assured that such an application would be considered appropriately as per the law, ensuring that the appellant’s rights were fully protected.

The respondent, represented by Senior Departmental Representative (DR) Shri Jagdish Singh, raised no objection to the appellant’s request for withdrawal or the caveat included in the tribunal’s order. This agreement from both parties facilitated a smooth conclusion to the proceedings.

Case Conclusion and Final Judgment

The tribunal’s decision to dismiss the appeal was formally announced on December 18, 2020, during the virtual hearing. The order highlighted that while the appeal was consigned to records, the option to reinstate it remained available to the appellant, contingent on the outcome of the settlement under the Vivad Se Vishwas Scheme.

By opting for the Vivad Se Vishwas Scheme, Reetu Finlease Pvt Ltd aimed to resolve the dispute swiftly, avoiding the uncertainty and costs associated with prolonged litigation. The tribunal’s order provided a balanced resolution, ensuring that the appellant’s decision to withdraw the appeal did not preclude them from seeking further recourse if needed.

Implications of the Tribunal’s Decision

The dismissal of the appeal under the Vivad Se Vishwas Scheme demonstrates the scheme’s effectiveness in reducing litigation and providing a clear path for taxpayers to settle their disputes with the tax authorities. This case serves as an example for other taxpayers who might be facing similar disputes, showing that the Vivad Se Vishwas Scheme can be a viable option for resolving tax-related issues without the need for extended legal proceedings.

The ITAT’s approach in this case underscores its role in facilitating such resolutions, providing a fair and just platform for both the taxpayer and the Revenue. The inclusion of the caveat to reinstate the appeal if the settlement does not go through ensures that taxpayers’ rights are safeguarded while encouraging the use of government schemes to settle disputes.

Conclusion

The case of Reetu Finlease Pvt Ltd vs ITO Ward 21(2), New Delhi, underlines the importance of alternative dispute resolution mechanisms like the Vivad Se Vishwas Scheme in the Indian tax system. By choosing this route, the appellant not only aimed to resolve the dispute but also set a precedent for other taxpayers in similar situations. The tribunal’s decision reflects a balanced and pragmatic approach, ensuring that justice is served while encouraging taxpayers to resolve disputes amicably.

For future cases, this judgment serves as a reminder of the options available to taxpayers under schemes like Vivad Se Vishwas and the supportive role of the ITAT in facilitating such resolutions.

Reetu Finlease Pvt Ltd vs ITO Ward 21(2), New Delhi: Appeal Dismissed Under Vivad Se Vishwas Scheme – ITA 6089/DEL/2019