HCL Technologies Ltd. (Successor to Geometric Ltd.) vs. DCIT: Appeal Withdrawal under Vivad Se Vishwas Scheme for AY 2015-16

HCL Technologies Ltd. (Successor to Geometric Ltd.) vs. DCIT: Appeal Withdrawal under Vivad Se Vishwas Scheme for AY 2015-16

Case Number: ITA 6287/DEL/2019

Appellant: HCL Technologies Ltd. (as successor in interest of erstwhile Geometric Ltd.), New Delhi

Respondent: Deputy Commissioner of Income Tax (DCIT), Circle-11(1), New Delhi

Assessment Year: 2015-16

Order Type: Final Tribunal Order

Date of Order: March 25, 2021

Pronounced On: March 25, 2021

Case Filed On: July 26, 2019

Tribunal Bench: Delhi Bench A: New Delhi (Through Video Conferencing)

Judges: Shri G.S. Pannu (Vice President) and Shri Sudhanshu Srivastava (Judicial Member)

Background of the Case

The appellant, HCL Technologies Ltd., as the successor in interest of erstwhile Geometric Ltd., filed an appeal against the Deputy Commissioner of Income Tax (DCIT), Circle-11(1), New Delhi, for the assessment year 2015-16. This appeal was directed against the order passed by the Assessing Officer on May 31, 2019. The case involved disputes concerning the assessment of tax liabilities for the relevant assessment year.

Reason for Filing the Appeal

The appeal was initially filed by HCL Technologies Ltd., following its acquisition of Geometric Ltd., to contest the tax demands raised by the Income Tax Department for the assessment year 2015-16. The appellant sought to challenge the assessment order, arguing that the tax liabilities imposed were incorrect and excessive, given the nature of the transactions and business operations involved.

Settlement under the Vivad Se Vishwas Scheme, 2020

During the pendency of the appeal, the Government of India introduced the Vivad Se Vishwas Scheme, 2020. This scheme was aimed at reducing litigation and providing taxpayers with an opportunity to settle their disputes with the Income Tax Department. The scheme allowed taxpayers to resolve disputes by paying a percentage of the disputed tax amount, thus receiving immunity from further litigation.

HCL Technologies Ltd., as the successor to Geometric Ltd., opted to settle the dispute under the Vivad Se Vishwas Scheme, 2020. A certificate under Section 5(1) of The Direct Tax Vivad Se Vishwas Act, 2020, was filed by the appellant, confirming that the tax arrears related to the assessment year 2015-16 were settled under the scheme.

Withdrawal of the Appeal

On March 25, 2021, during the virtual hearing of the case, the Assessee’s Authorized Representative (A.R.), Sh. Arpit Goyal, submitted a letter dated February 24, 2021, requesting the withdrawal of the appeal on behalf of HCL Technologies Ltd. The withdrawal request was made following the successful settlement under the Vivad Se Vishwas Scheme. The respondent’s representative, Sh. M. Baranwal, Sr. DR, had no objection to the withdrawal of the appeal.

Given the request for withdrawal, the Income Tax Appellate Tribunal (ITAT) accepted the withdrawal and dismissed the appeal as withdrawn. The decision was pronounced at the conclusion of the virtual hearing on March 25, 2021, in the presence of both parties.

Final Order

The final order was delivered by Shri G.S. Pannu, Vice President, and Shri Sudhanshu Srivastava, Judicial Member, who constituted the bench. The bench concluded that the appeal filed by HCL Technologies Ltd. for the assessment year 2015-16 was dismissed as withdrawn due to the settlement of the dispute under the Vivad Se Vishwas Scheme, 2020.

This decision marks the end of the litigation process for the appellant, providing relief from the contested tax liabilities for the assessment year in question.

Conclusion

The case of HCL Technologies Ltd. (as successor to Geometric Ltd.) vs. DCIT for the assessment year 2015-16 serves as an example of the effectiveness of the Vivad Se Vishwas Scheme, 2020, in resolving tax disputes. By opting for this scheme, the appellant was able to amicably resolve the dispute without engaging in prolonged litigation. The withdrawal of the appeal under the scheme highlights its role in reducing the burden on both taxpayers and the judiciary.

The ITAT’s acceptance of the withdrawal and dismissal of the appeal underscores the importance of such schemes in promoting a more efficient tax dispute resolution process. The success of the Vivad Se Vishwas Scheme, 2020, in this case, provides a positive precedent for other companies and taxpayers facing similar disputes.

By withdrawing the appeal, HCL Technologies Ltd. benefited from the government’s initiative to streamline tax dispute resolution, ensuring that the case was resolved quickly and with certainty. This outcome demonstrates the value of government schemes designed to encourage dispute resolution without the need for lengthy and expensive litigation.

Overall, the Vivad Se Vishwas Scheme’s implementation and its positive outcomes, as evidenced in this case, reinforce the government’s commitment to easing the tax compliance process and providing practical avenues for dispute resolution. The scheme’s success in this case not only resolved a significant tax dispute but also set a benchmark for other taxpayers seeking similar resolutions.

The withdrawal of the appeal by HCL Technologies Ltd. under the Vivad Se Vishwas Scheme highlights the scheme’s effectiveness in achieving its goals and underscores its importance in the broader context of tax administration and compliance in India. The case serves as a reminder that such schemes can be a valuable tool for taxpayers seeking to resolve disputes efficiently and fairly.

As more taxpayers opt for similar schemes, the overall efficiency of the tax dispute resolution process is likely to improve, contributing to a more cooperative relationship between taxpayers and the tax authorities. This case sets a positive example for the business community and demonstrates how proactive measures can lead to favorable outcomes for both the taxpayer and the government.

HCL Technologies Ltd. (Successor to Geometric Ltd.) vs. DCIT: Appeal Withdrawal under Vivad Se Vishwas Scheme for AY 2015-16