Krishna Mutneja vs. ITO: Appeal Withdrawal Under Vivad Se Vishwas Scheme for AY 2011-12

Case Overview

The case of Krishna Mutneja vs. ITO, Ward-35(4), New Delhi (ITA No. 6371/DEL/2019) pertains to the assessment year 2011-12. The appellant, Krishna Mutneja, a resident of Delhi, filed this appeal challenging the order passed by the CIT(A)-12. The case was initially filed on 30th July 2019, and the final order was pronounced on 28th December 2020 by the Income Tax Appellate Tribunal (ITAT), Delhi Bench ‘SMC-2’.

Background of the Case

Krishna Mutneja had contested the assessment order passed by the Income Tax Officer (ITO), Ward-35(4), New Delhi, for the assessment year 2011-12. The specifics of the case involve the assessment of income and related tax liabilities, which were disputed by the appellant. The case reached the appellate stage, with the CIT(A)-12 issuing an order on 20th June 2019, which was subsequently challenged by Krishna Mutneja before the ITAT.

Why the Case Was Filed

The appeal was filed by Krishna Mutneja to contest the findings and decisions of the lower tax authorities concerning the assessment year 2011-12. The appellant sought relief from the tax demands that were deemed unjust or erroneous by the assessing officer. The primary aim of the appeal was to overturn or modify the assessment, thereby reducing or nullifying the tax liability imposed.

Tribunal Proceedings

The proceedings before the tribunal took an unexpected turn when the appellant, Krishna Mutneja, decided to withdraw the appeal. On 27th December 2020, the appellant submitted an application expressing the intention to resolve the pending tax dispute through the Direct Tax Vivad Se Vishwas Scheme (VSV) Act, 2020. The VSV scheme, introduced by the Indian government, was designed to reduce litigation and allow taxpayers to settle disputes by paying a specified amount, depending on the stage of the dispute.

In the application, Krishna Mutneja informed the tribunal that Form No. 1 and 2 had been filed under the VSV scheme. However, the authorities had not yet granted the certificate in Form No. 3, which is a critical step in finalizing the resolution under the scheme. The appellant, therefore, requested the withdrawal of the appeal, subject to the condition that if the dispute was not resolved under the VSV scheme, they would be at liberty to approach the tribunal for the reinstatement of the appeal.

Tribunal’s Decision

The tribunal, presided over by Shri Anil Chaturvedi, Accountant Member, considered the appellant’s submission and decided to dismiss the appeal as withdrawn. The tribunal’s order included a caveat that if the tax dispute for the assessment year 2011-12 was not ultimately resolved under the VSV scheme, Krishna Mutneja could request the reinstitution of the appeal, and the tribunal would consider such a request.

The order was pronounced on 28th December 2020, marking the conclusion of this case before the ITAT, with the appeal being dismissed without any further adjudication on the merits of the case.

Significance of the Case

This case is significant as it highlights the practical application of the Direct Tax Vivad Se Vishwas Scheme (VSV) Act, 2020. The scheme was a crucial initiative by the Indian government to reduce the backlog of pending tax disputes and to offer a simpler and faster resolution process for taxpayers. By opting for the VSV scheme, taxpayers like Krishna Mutneja could potentially resolve long-standing disputes without the need for prolonged litigation.

The tribunal’s acceptance of the withdrawal application under the VSV scheme demonstrates the judiciary’s support for alternative dispute resolution mechanisms, which can alleviate the burden on both taxpayers and the judicial system. The case also serves as a reminder to taxpayers of the importance of timely resolution of tax disputes and the benefits of availing government schemes designed for dispute resolution.

Conclusion

The case of Krishna Mutneja vs. ITO, Ward-35(4), New Delhi (ITA No. 6371/DEL/2019) is a clear example of how taxpayers can leverage government schemes like the Vivad Se Vishwas Scheme to resolve pending tax disputes efficiently. The decision to withdraw the appeal under the VSV scheme highlights a strategic move by the appellant to settle the dispute amicably without further litigation.

The tribunal’s ruling, allowing the withdrawal with a provision for potential reinstatement, underscores the flexibility and taxpayer-friendly approach of the judiciary in supporting such government initiatives. This case may encourage other taxpayers with pending disputes to consider similar avenues for resolution, thereby contributing to a more streamlined and less contentious tax administration system.

Krishna Mutneja vs. ITO: Appeal Withdrawal Under Vivad Se Vishwas Scheme for AY 2011-12