Hanu Portfolio Pvt. Ltd. vs ITO Ward 11(1), New Delhi: Appeal Dismissed Under Vivad Se Vishwas Scheme – ITA 6091/DEL/2019

Case Overview: Hanu Portfolio Pvt. Ltd. vs ITO Ward 11(1), New Delhi

Case Number: ITA 6091/DEL/2019

Appellant: Hanu Portfolio Pvt. Ltd., Delhi

Respondent: ITO, Ward- 11(1), New Delhi

Assessment Year: 2010-11

Case Filed On: 2019-07-17

Order Type: Final Tribunal Order

Date of Order: 2021-03-31

Pronounced On: 2021-03-31

Introduction

The case of Hanu Portfolio Pvt. Ltd. vs. ITO Ward 11(1), New Delhi revolves around the assessment year 2010-11, where the appellant, Hanu Portfolio Pvt. Ltd., challenged the tax assessment by the Income Tax Officer (ITO), Ward 11(1), New Delhi. The case was brought before the Income Tax Appellate Tribunal (ITAT), Delhi, with the appellant disputing the tax demands raised by the Income Tax Department. The appeal was filed on July 17, 2019, following the dissatisfaction with the decision of the Commissioner of Income Tax (Appeals) [CIT(A)], New Delhi.

Background: Why the Case Was Filed

Hanu Portfolio Pvt. Ltd., a company engaged in financial portfolio management and investments, was subjected to a tax assessment for the financial year 2009-10 (Assessment Year 2010-11). The Income Tax Department identified discrepancies in the financial records and raised a significant tax demand. The company, believing that the assessment included erroneous additions and disallowances, decided to appeal the CIT(A)’s decision to the ITAT.

The appeal was grounded on several contentions, including the incorrect treatment of certain income components and the unjustified disallowance of legitimate business expenses. Hanu Portfolio Pvt. Ltd. sought relief from the tribunal, aiming to reduce the inflated tax liability imposed by the tax authorities.

The Legal Proceedings

The case was heard by the ITAT Delhi ‘A’ Bench, consisting of Vice President Shri G.S. Pannu and Judicial Member Shri Kul Bharat. The hearing took place on March 31, 2021, via video conferencing due to the restrictions imposed by the global pandemic. Despite the case being scheduled for hearing, the appellant’s counsel did not appear before the tribunal.

Prior to the hearing, the appellant submitted a letter dated March 20, 2021, requesting the withdrawal of the appeal. The letter indicated that Hanu Portfolio Pvt. Ltd. had opted to resolve the tax dispute under the Vivad Se Vishwas Scheme, 2020, a government initiative designed to settle pending tax disputes amicably. The company also provided a certificate under Section 5(1) of the Direct Tax Vivad Se Vishwas Act, 2020, confirming its participation in the scheme and the settlement of the tax arrears for the assessment year in question.

Tribunal’s Ruling and Order

During the virtual hearing, the tribunal considered the appellant’s request for withdrawal of the appeal. The Senior Departmental Representative (DR), Shri M. Barnwal, who represented the Revenue, did not object to the withdrawal. Consequently, the tribunal accepted the appellant’s request and allowed the withdrawal of the appeal.

The tribunal’s order noted that the appeal was dismissed as withdrawn following the appellant’s decision to resolve the tax dispute under the Vivad Se Vishwas Scheme. The tribunal’s decision was delivered on March 31, 2021, immediately following the virtual hearing.

With the dismissal of the appeal, the case was formally closed and removed from the tribunal’s records for statistical purposes. This dismissal aligns with the objectives of the Vivad Se Vishwas Scheme, which seeks to reduce litigation and expedite the resolution of pending tax disputes.

Case Conclusion and Final Judgment

The dismissal of the appeal in the case of Hanu Portfolio Pvt. Ltd. vs ITO Ward 11(1), New Delhi, effectively marked the resolution of the tax dispute for the assessment year 2010-11. By choosing to participate in the Vivad Se Vishwas Scheme, Hanu Portfolio Pvt. Ltd. opted for a practical and expedient solution to end the prolonged litigation and mitigate the risks associated with a potential unfavorable ruling.

The tribunal’s decision to dismiss the appeal underscored the effectiveness of the Vivad Se Vishwas Scheme in facilitating the resolution of tax disputes without the need for protracted legal proceedings. The scheme’s benefits, including the reduction of tax liabilities and the avoidance of further legal costs, likely influenced the company’s decision to withdraw its appeal.

Implications of the Tribunal’s Decision

The resolution of this case under the Vivad Se Vishwas Scheme reflects a broader trend within the Indian tax system, where alternative dispute resolution mechanisms are increasingly being utilized to settle disputes. The tribunal’s acceptance of the withdrawal and subsequent dismissal of the appeal highlights the role of such schemes in reducing the burden on the judiciary and promoting a more efficient tax administration process.

For taxpayers like Hanu Portfolio Pvt. Ltd., the decision to opt for the Vivad Se Vishwas Scheme represents a strategic move to resolve disputes swiftly, avoid prolonged litigation, and secure a favorable outcome. The success of such schemes in resolving disputes could encourage more taxpayers to consider similar options in the future, thus contributing to a more streamlined and less contentious tax environment.

For the Income Tax Department, the Vivad Se Vishwas Scheme provides a valuable tool to recover disputed tax amounts without the delays and uncertainties associated with ongoing litigation. The scheme promotes a cooperative approach to tax compliance and dispute resolution, benefiting both the Revenue and taxpayers.

Conclusion

The case of Hanu Portfolio Pvt. Ltd. vs ITO Ward 11(1), New Delhi, serves as a notable example of the effectiveness of the Vivad Se Vishwas Scheme in resolving tax disputes. The tribunal’s decision to dismiss the appeal following the appellant’s participation in the scheme underscores the practical benefits of alternative dispute resolution mechanisms in the Indian tax system.

This case highlights the importance of considering such schemes as viable alternatives to traditional litigation, particularly in complex tax disputes where the costs and risks of prolonged legal battles can be significant. For Hanu Portfolio Pvt. Ltd., the decision to settle the dispute under the Vivad Se Vishwas Scheme likely provided a timely and cost-effective resolution, allowing the company to focus on its business operations without the lingering uncertainty of an unresolved tax case.

As more taxpayers and tax authorities embrace such schemes, the Indian tax system may continue to see a reduction in the backlog of cases and an improvement in the overall efficiency of tax dispute resolution. The tribunal’s handling of this case demonstrates its support for initiatives that promote quick and amicable settlements, further contributing to the goal of a fair and efficient tax system in India.

Hanu Portfolio Pvt. Ltd. vs ITO Ward 11(1), New Delhi: Appeal Dismissed Under Vivad Se Vishwas Scheme – ITA 6091/DEL/2019