Dhandia Jewellers vs. ITO Ward-30(4), Delhi: Vivad Se Vishwas Resolution for AY 2007-08

Case Overview: Dhandia Jewellers vs. ITO Ward-30(4), Delhi – Assessment Year 2007-08

The case of Dhandia Jewellers vs. ITO Ward-30(4), Delhi pertains to the assessment year 2007-08 and was heard before the Income Tax Appellate Tribunal (ITAT) Delhi Bench ‘F’. The tribunal, comprising Vice President Shri G. S. Pannu and Judicial Member Shri Sudhanshu Srivastava, conducted the hearing on December 23, 2020, through video conferencing due to the prevailing circumstances brought about by the COVID-19 pandemic.

Background of the Case

Dhandia Jewellers, a Delhi-based firm, filed its income tax return for the assessment year 2007-08. The Income Tax Officer (ITO) of Ward-30(4), New Delhi, assessed the return and raised a tax demand. Discontented with the assessment, Dhandia Jewellers appealed to the Commissioner of Income Tax (Appeals)-33, New Delhi, but the CIT(A) upheld the assessment. Consequently, Dhandia Jewellers took the matter to the ITAT, contesting the order passed by the CIT(A) on May 22, 2019.

Opting for the Vivad Se Vishwas Scheme

In 2020, the Indian government introduced the Direct Tax Vivad Se Vishwas Scheme as a means to reduce litigation and resolve pending tax disputes. The scheme provided taxpayers with an opportunity to settle their tax disputes by paying a specified percentage of the disputed tax amount, thereby closing the case and avoiding prolonged litigation.

Following the introduction of this scheme, Dhandia Jewellers decided to opt for it to settle the tax dispute for the assessment year 2007-08. On December 18, 2020, the firm submitted a letter to the ITAT, informing them of their decision to withdraw the appeal as they had chosen to resolve the dispute under the Vivad Se Vishwas Scheme. The firm also submitted a certificate under Section 5(1) of The Direct Tax Vivad Se Vishwas Act, 2020, confirming the settlement.

Tribunal’s Decision

During the virtual hearing on December 23, 2020, no representative appeared on behalf of Dhandia Jewellers. However, the tribunal considered the letter submitted by the appellant and the certificate under the Vivad Se Vishwas Scheme. The Senior Departmental Representative (DR) raised no objection to the withdrawal of the appeal.

After reviewing the submissions and the situation, the ITAT accepted the request of Dhandia Jewellers to withdraw the appeal. Consequently, the tribunal dismissed the appeal, marking the end of the litigation for the assessment year 2007-08.

Implications of the Dismissal

The dismissal of the appeal underlines the effectiveness of the Vivad Se Vishwas Scheme in reducing litigation and allowing taxpayers to settle disputes in a simplified manner. By opting for this scheme, Dhandia Jewellers was able to resolve its tax arrears for the assessment year 2007-08, thereby avoiding further legal proceedings and potential penalties.

The tribunal’s acceptance of the withdrawal showcases the scheme’s utility for both the taxpayers and the tax authorities. For taxpayers, it provides a clear and structured method to settle disputes, while for the tax authorities, it helps in reducing the backlog of cases and focuses resources on more contentious issues.

Conclusion

The case of Dhandia Jewellers vs. ITO Ward-30(4), Delhi illustrates the practical application of the Vivad Se Vishwas Scheme, demonstrating its role in facilitating the resolution of tax disputes. The withdrawal of the appeal and its dismissal by the ITAT Delhi Bench exemplify the benefits of this scheme, particularly in terms of reducing litigation and enabling a smoother, more efficient tax administration process.

As more taxpayers opt for similar schemes, the overall burden on the judicial system is likely to decrease, resulting in faster resolutions for pending cases and a more streamlined approach to tax dispute management in India.

Dhandia Jewellers vs. ITO Ward-30(4), Delhi: Vivad Se Vishwas Resolution for AY 2007-08