Fareha Faisal vs. ITO: Settlement Under Vivad Se Vishwas Scheme for AY 2015-16

Case Overview

The case of Fareha Faisal vs. ITO, Ward 2(1), Moradabad (ITA No. 6375/DEL/2019) pertains to the assessment year 2015-16. The appellant, Fareha Faisal, a resident of Moradabad, filed an appeal against the order passed by the Commissioner of Income Tax (Appeals), Moradabad, challenging the assessment made by the Income Tax Officer (ITO), Ward 2(1), Moradabad. The appeal was filed on 30th July 2019 and was subsequently withdrawn by the appellant under the Direct Tax Vivad Se Vishwas Act, 2020.

Background of the Case

Fareha Faisal, the appellant, was assessed for the assessment year 2015-16 by the Income Tax Officer, Ward 2(1), Moradabad. The assessment led to a tax demand that was disputed by the appellant. Consequently, an appeal was filed with the Income Tax Appellate Tribunal (ITAT), Delhi Bench, seeking relief from the tax demand.

The appellant later decided to resolve the tax dispute under the Direct Tax Vivad Se Vishwas Act, 2020. This scheme was introduced by the Government of India to provide a resolution mechanism for taxpayers to settle their pending tax disputes by paying a specified percentage of the disputed tax amount, thereby avoiding prolonged litigation.

Why the Case Was Filed

The case was filed by Fareha Faisal to contest the tax demand raised by the Income Tax Officer for the assessment year 2015-16. The appellant believed that the assessment order was not justified 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.

The Vivad Se Vishwas Scheme provided an opportunity for taxpayers like Fareha Faisal to resolve their disputes with the tax authorities by paying a reduced amount of the tax arrears. This scheme aimed to reduce litigation and clear pending disputes, allowing taxpayers to settle their dues without further legal proceedings.

Tribunal Proceedings

The case was heard by the ITAT Delhi Bench ‘A’, comprising Shri G.S. Pannu, Vice President, and Shri Sudhanshu Srivastava, Judicial Member, on 28th August 2020. During the proceedings, the appellant, Ms. Fareha Faisal, informed the tribunal through a letter dated 18th August 2020 that she had opted to settle the tax dispute under the Vivad Se Vishwas Scheme, 2020. The letter was received by the tribunal via email on 21st August 2020.

The respondent, represented by Shri Saras Kumar, Senior Departmental Representative (DR), raised no objections to the withdrawal of the appeal under the scheme.

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 appeal was being withdrawn because the appellant had opted to resolve the tax arrears for the assessment year 2015-16 under the scheme.

The tribunal further stated that the withdrawal of the appeal was subject to a caveat: if the dispute relating to the tax arrears was not ultimately resolved under the Vivad Se Vishwas Scheme, the appellant would have the liberty to approach the tribunal for reinstatement of the appeal. The tribunal would then consider such an application according to the law. The respondent (i.e., the Revenue) did not object to this caveat.

As a result, the appeal was dismissed for statistical purposes, and no further proceedings were conducted. The tribunal’s order was pronounced on 28th August 2020, following the virtual hearing.

Significance of the Case

This case highlights the utility of the Vivad Se Vishwas Scheme in resolving tax disputes efficiently. By opting for the scheme, the appellant, Fareha Faisal, was able to settle the tax arrears for the assessment year 2015-16 without engaging in prolonged litigation. The scheme provided a structured and cost-effective mechanism for taxpayers to resolve their disputes with the tax authorities.

The Vivad Se Vishwas Scheme represents a significant step towards reducing the burden of litigation on both taxpayers and the judicial system. It encouraged taxpayers to come forward and resolve their pending issues with the tax authorities by offering a clear and fair settlement process. The successful implementation of the scheme in cases like this one demonstrates its effectiveness in achieving these goals.

Conclusion

The case of Fareha Faisal vs. ITO, Ward 2(1), Moradabad (ITA No. 6375/DEL/2019) illustrates how the Vivad Se Vishwas Scheme can be effectively used to settle tax disputes. By choosing to withdraw the appeal under the scheme, the appellant was able to resolve the tax arrears for the assessment year 2015-16 without further litigation.

The tribunal’s acceptance of the withdrawal request and the dismissal of the appeal reflect the judiciary’s support for the Vivad Se Vishwas Scheme and its role in facilitating the resolution of tax disputes. For other taxpayers facing similar disputes, this case serves as an example of the benefits of utilizing such settlement schemes to achieve a quick and cost-effective resolution to tax-related issues.

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

Fareha Faisal vs. ITO: Settlement Under Vivad Se Vishwas Scheme for AY 2015-16