Income Tax Appeal Outcome for Harish Kumar Dhawan vs DCIT on Penalty after Vivad Se Vishwas Settlement

Income Tax Appellate Tribunal Decision: Harish Kumar Dhawan vs. DCIT, Circle-28(1), Delhi

Case Overview

ITA No. 1389/DEL/2022 is a significant case brought before the Income Tax Appellate Tribunal, Delhi Bench ‘B’, involving appellant Harish Kumar Dhawan and respondent DCIT, Circle-28(1), Delhi. The dispute centered around a penalty imposed on Dhawan despite a settlement under the ‘Vivad Se Vishwas Scheme’ for the assessment year 2016-17. The Tribunal’s final decision allowed the appeal, thereby deleting the penalty.

Background

The appellant, Harish Kumar Dhawan, challenged the penalty levied following a dispute settlement under the Vivad Se Vishwas Scheme. Despite the settlement, the Income Tax Department issued a penalty notice, leading Dhawan to appeal the decision.

Case Arguments

Dhawan argued that the penalty was unjust as it contradicted the settlement terms under the Vivad Se Vishwas Scheme. The responding DCIT maintained that the penalty was valid, necessitating Tribunal arbitration.

Judicial Analysis

The Tribunal meticulously examined submissions from both parties, the legal framework of the Vivad Se Vishwas Scheme, and the circumstances under which the penalty was imposed. It found that the imposition of the penalty post-settlement was neither legal nor in line with the scheme’s intentions, highlighting a critical oversight by the assessing officer.

Conclusion and Impact

The decision to allow Dhawan’s appeal and delete the penalty sets a precedent on the interpretation and application of the Vivad Se Vishwas Scheme. This case underscores the importance of adhering to the resolution terms agreed upon under the scheme and ensures fairness in the tax dispute resolution process.

Order pronounced on 18th July 2022, marking a significant interpretation of the Vivad Se Vishwas Scheme in the context of tax penalty disputes.

Income Tax Appeal Outcome for Harish Kumar Dhawan vs DCIT on Penalty after Vivad Se Vishwas Settlement