Ajit Parshad Jain & Sons (HUF) vs. ACIT: Vivad Se Vishwas Scheme Settlement for AY 2016-17

Case Overview

The case of Ajit Parshad Jain & Sons (HUF) vs. ACIT, Circle-47(1), New Delhi (ITA No. 6374/DEL/2019) pertains to the assessment year 2016-17. The appellant, Ajit Parshad Jain & Sons (HUF), challenged the assessment order issued by the Assistant Commissioner of Income Tax (ACIT), Circle-47(1), New Delhi. The appeal was filed on 30th July 2019 and was subsequently withdrawn by the appellant under the Vivad Se Vishwas Scheme, 2020.

Background of the Case

The appellant, a Hindu Undivided Family (HUF) named Ajit Parshad Jain & Sons, based in New Delhi, filed an appeal against the order passed by the CIT(A)-16, New Delhi, for the assessment year 2016-17. The appellant had been assessed under various heads of income, leading to disputes regarding the tax liability. The appellant sought to resolve these disputes through legal channels by filing the present appeal with the Income Tax Appellate Tribunal (ITAT), Delhi Bench.

Why the Case Was Filed

The case was filed by Ajit Parshad Jain & Sons (HUF) to challenge the assessment order issued by the ACIT for the assessment year 2016-17. The appellant disputed the tax demand raised by the ACIT and sought relief through the appellate process. However, during the pendency of the appeal, the appellant opted to settle the dispute under the Vivad Se Vishwas Scheme, 2020, which was introduced by the Government of India to reduce litigation and provide an opportunity for taxpayers to resolve their tax disputes amicably.

The Vivad Se Vishwas Scheme was designed to facilitate the resolution of long-standing tax disputes by allowing taxpayers to settle their tax arrears by paying a specified percentage of the disputed tax amount. Under this scheme, once the dispute is settled, all appeals related to the tax arrears are withdrawn, and no further proceedings are conducted.

Tribunal Proceedings

The case was heard by the ITAT Delhi Bench ‘C’, comprising Shri G.S. Pannu, Vice President, and Ms. Madhumita Roy, Judicial Member, on 29th June 2021. During the proceedings, the learned counsel for the appellant, Sh. C.S. Anand, CA, and Sh. Sankalp Anand, CA, informed the tribunal that the appellant had opted to settle the tax arrears under the Vivad Se Vishwas Scheme, 2020. A certificate under Section 5(1) of The Direct Tax Vivad Se Vishwas Act, 2020, was also submitted as evidence of the settlement.

The learned Senior Departmental Representative (DR), Ms. Anima Baranwal, representing the respondent, ACIT, Circle-47(1), New Delhi, raised no objections to the withdrawal of the appeal.

Tribunal’s Decision

In light of the appellant’s decision to settle the dispute under the Vivad Se Vishwas Scheme, the tribunal accepted the request for withdrawal of the appeal. The tribunal noted that the appellant had obtained a certificate under Section 5(1) of The Direct Tax Vivad Se Vishwas Act, 2020, indicating that the dispute had been resolved under the scheme.

As a result, the appeal was dismissed, and no further proceedings were conducted. The tribunal’s order was pronounced on 29th June 2021, immediately following the virtual hearing in the presence of both parties.

Significance of the Case

This case highlights the effectiveness of the Vivad Se Vishwas Scheme in resolving tax disputes and reducing litigation. By opting for the scheme, the appellant was able to settle the tax arrears for the assessment year 2016-17 without the need for prolonged litigation. The scheme provided a mechanism for taxpayers to resolve their disputes efficiently, ensuring that both the taxpayer and the tax authorities could avoid the costs and delays associated with ongoing legal proceedings.

The Vivad Se Vishwas Scheme also underscores the importance of alternative dispute resolution mechanisms in the Indian tax system. By offering a clear and structured process for settling tax disputes, the scheme encouraged taxpayers to come forward and resolve their pending issues with the tax authorities, thereby reducing the burden on the judicial system and fostering a more cooperative relationship between taxpayers and the government.

Conclusion

The case of Ajit Parshad Jain & Sons (HUF) vs. ACIT, Circle-47(1), New Delhi (ITA No. 6374/DEL/2019) serves as an example of how the Vivad Se Vishwas Scheme can be utilized to settle tax disputes amicably. The decision to withdraw the appeal under the scheme allowed the appellant to resolve the tax arrears for the assessment year 2016-17 without further litigation.

The tribunal’s acceptance of the withdrawal request and the dismissal of the appeal demonstrate the tribunal’s role in facilitating the implementation of the Vivad Se Vishwas Scheme. For taxpayers facing similar disputes, this case highlights the benefits of opting for such settlement schemes, which provide a straightforward and cost-effective resolution to tax-related issues.

Overall, the successful resolution of this case under the Vivad Se Vishwas Scheme reflects the scheme’s potential to streamline the resolution of tax disputes, benefiting both taxpayers and the tax administration.

Ajit Parshad Jain & Sons (HUF) vs. ACIT: Vivad Se Vishwas Scheme Settlement for AY 2016-17