On February 20, 2020, Swatch Group (India) Pvt. Ltd., based in New Delhi, filed an appeal against the order dated December 23, 2019, passed by the Commissioner of Income-tax (Appeals) [CIT(A)], New Delhi. The case pertained to the assessment year 2011-12 and involved a tax dispute with the Additional Commissioner of Income Tax (ACIT), Circle-22(2), New Delhi. The original assessment order was issued for the assessment year 2011-12. The appeal was heard and subsequently withdrawn on March 12, 2021, as the appellant opted to settle the dispute under the Vivad Se Vishwas Scheme, 2020.
Appellant: Swatch Group (India) Pvt. Ltd., New Delhi
Respondent: ACIT, Circle-22(2), New Delhi
Assessment Year: 2011-12
Case Filed On: February 20, 2020
Order Type: Final Tribunal Order
Date of Order: March 12, 2021
Date of Pronouncement: March 12, 2021
The appellant was represented by Ms. Shubhangi Arora, Authorized Representative (AR), while the respondent was represented by Shri M. Baranwal, Senior Departmental Representative (DR).
Swatch Group (India) Pvt. Ltd. was assessed for the assessment year 2011-12, and certain tax arrears were identified by the Additional Commissioner of Income Tax, Circle-22(2), New Delhi. The company contested these arrears and filed an appeal with the CIT(A), New Delhi, which was decided on December 23, 2019. Unsatisfied with the CIT(A)’s decision, Swatch Group (India) Pvt. Ltd. filed a further appeal with the Income Tax Appellate Tribunal (ITAT), Delhi Bench ‘A’.
The specific grounds for appeal involved contesting the tax arrears and seeking relief from the assessment order issued by the ACIT, Circle-22(2), New Delhi. However, before the appeal could be fully adjudicated, Swatch Group (India) Pvt. Ltd. opted to settle the dispute under the Vivad Se Vishwas Scheme, 2020, which aims to resolve pending tax disputes through a simplified settlement mechanism.
The Vivad Se Vishwas Scheme, introduced by the Government of India, aims to reduce litigation and settle tax disputes efficiently. Under this scheme, taxpayers can pay the disputed tax amount and get a waiver of interest and penalties. Swatch Group (India) Pvt. Ltd. decided to take advantage of this scheme to settle its tax arrears for the assessment year 2011-12.
On March 5, 2021, the appellant submitted a letter requesting the withdrawal of the appeal, citing their decision to settle the dispute under the Vivad Se Vishwas Scheme. A certificate under Section 5(1) of the Direct Tax Vivad Se Vishwas Act, 2020, was also filed to support this request. During the hearing on March 12, 2021, the Senior Departmental Representative raised no objections, and the tribunal accepted the withdrawal request.
The case was heard on March 12, 2021, via video conferencing by a bench comprising Shri G.S. Pannu, Vice President, and Shri K. Narasimha Chary, Judicial Member. After considering the withdrawal request and the filed certificate, the tribunal accepted the appellant’s request and dismissed the appeal as withdrawn.
The tribunal noted the following in its order:
The learned counsel for the assessee, vide its letter dated 05.03.2021 received by email, has requested for withdrawal of the appeal filed by him and stated that the assessee has opted to settle the dispute relating to the tax arrears for the assessment year under consideration under the Vivad Se Vishwas Scheme, 2020. A certificate to this effect under Section 5(1) of The Direct Tax Vivad Se Vishwas Act, 2020 has also been filed.
Learned Senior DR has no objection.
In view of the above, we accept the request of the assessee for withdrawal of the appeal.
In the result, the appeal of the assessee is dismissed as withdrawn.
The decision in ITA No.870/DEL/2020 highlights the effectiveness of the Vivad Se Vishwas Scheme in resolving tax disputes. By opting for this scheme, Swatch Group (India) Pvt. Ltd. was able to settle its tax arrears efficiently, avoiding prolonged litigation. This case serves as a precedent for other taxpayers considering the scheme to resolve their tax disputes.
This case has broader implications for businesses and tax professionals, particularly regarding the utilization of the Vivad Se Vishwas Scheme to settle tax disputes. The key takeaways include:
This section provides a detailed analysis of the judicial precedents and legal principles related to the case, particularly focusing on the utilization and effectiveness of settlement schemes like Vivad Se Vishwas.
The Vivad Se Vishwas Scheme embodies the principle of efficient dispute resolution, aiming to reduce the burden of litigation on both taxpayers and tax authorities. By providing a streamlined mechanism for settling disputes, the scheme encourages voluntary compliance and timely resolution of tax issues.
Various legal precedents support the utilization of settlement schemes to resolve tax disputes. These precedents emphasize the importance of reducing litigation and fostering a cooperative relationship between taxpayers and tax authorities. Courts have often highlighted the benefits of settlement schemes in achieving these objectives.
Analyzing similar cases where taxpayers opted for settlement schemes can provide valuable insights into the benefits and challenges of such schemes. Case studies can illustrate how different taxpayers have leveraged these schemes to resolve their disputes and the outcomes they achieved.
The case of ITA No.870/DEL/2020 serves as an important example of how businesses can utilize settlement schemes like Vivad Se Vishwas to resolve tax disputes efficiently. Taxpayers and tax professionals should stay informed about such schemes and consider their benefits when facing tax disputes. By maintaining compliance, thorough documentation, and evaluating strategic options, taxpayers can effectively manage and resolve their tax issues.
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