Renu, New Delhi vs. ITO Ward-2, Karnal: Withdrawal of Appeal under Vivad Se Vishwas Scheme for AY 2011-12

Case Overview

The case titled Renu, New Delhi vs. ITO Ward-2, Karnal (ITA 6357/DEL/2019) pertains to the assessment year 2011-12. The case was filed on 29th July 2019, with the final tribunal order pronounced on 18th February 2021. The case was heard by the Income Tax Appellate Tribunal (ITAT) Delhi Bench ‘SMC-2’, under the authority of Shri R.K. Panda, Accountant Member.

Background of the Case

Renu, a resident of New Delhi, filed an appeal against the order passed by the Commissioner of Income Tax (Appeals) [CIT(A)], Karnal, relating to the assessment year 2011-12. The appellant challenged the assessment on various grounds, but during the pendency of the appeal, opted to settle the dispute under the Vivad Se Vishwas Scheme 2020. This scheme was introduced by the Government of India to resolve pending tax disputes, allowing taxpayers to pay a specified percentage of the disputed tax and receive immunity from interest and penalties.

Why the Case Was Filed

The case was initially filed due to disputes arising from the assessment order passed by the Assessing Officer (AO) under Section 143(3) of the Income Tax Act, 1961. The appellant contested the additions made by the AO, which were subsequently upheld by the CIT(A). The key issues involved in the assessment were related to income estimation, disallowances, and other adjustments that the appellant believed were unjustified and contrary to the principles of natural justice.

Withdrawal of Appeal

During the proceedings, the appellant’s counsel, Shri Tarun Kumar and Shri Deepesh Garg, Advocates, submitted an application for the withdrawal of the appeal. The reason cited for the withdrawal was that the appellant had opted to settle the case under the Vivad Se Vishwas Scheme 2020 and had received Form No. 3, which is an acknowledgment of acceptance under the scheme.

Under the Vivad Se Vishwas Scheme, taxpayers were given an opportunity to settle their pending disputes by paying the disputed tax amount without any further litigation. The scheme was a part of the government’s efforts to reduce litigation and provide relief to taxpayers by offering them an opportunity to clear their disputes amicably.

Tribunal’s Decision

Upon reviewing the application and considering the lack of any objection from the side of the Departmental Representative (DR), Shri Farat Khan, Additional Commissioner of Income Tax (DR), the tribunal allowed the withdrawal of the appeal. The appeal was thus dismissed as withdrawn, and the tribunal’s order was pronounced immediately during the hearing on 18th February 2021.

The tribunal’s order states: “This appeal filed by the assessee is directed against the order dated 3rd June 2019 passed by the Ld. CIT(A), Karnal, relating to the assessment year 2011-12. Ld. Counsel for the assessee filed an application seeking withdrawal of the appeal filed by the assessee on the ground that the assessee has opted to settle the dispute under the Vivad Se Vishwas scheme 2020 and has received Form No. 3. In view of the above submission of the Ld. Counsel for the assessee and in the absence of any objection from the side of the Ld. Addl. CIT(DR), the request of the assessee seeking withdrawal of the appeal is allowed. The appeal filed by the assessee is accordingly dismissed.”

Significance of the Case

This case highlights the impact of the Vivad Se Vishwas Scheme on the resolution of tax disputes in India. The scheme was designed to provide a quick and amicable resolution to long-pending tax disputes, allowing taxpayers to settle their cases by paying a portion of the disputed tax without the burden of additional interest and penalties.

The dismissal of this case underlines the effectiveness of the scheme in reducing the backlog of cases in appellate forums and providing relief to taxpayers. It also reflects the tribunal’s approach towards facilitating the resolution of disputes through alternative mechanisms, thereby reducing the burden on the judiciary.

Conclusion

The case of Renu, New Delhi vs. ITO Ward-2, Karnal (ITA 6357/DEL/2019) serves as a testament to the success of the Vivad Se Vishwas Scheme in providing a pathway for taxpayers to resolve their disputes amicably. The withdrawal of the appeal by the assessee after opting for the scheme demonstrates the taxpayer’s preference for settling disputes outside of prolonged litigation.

The tribunal’s decision to allow the withdrawal of the appeal further reinforces the scheme’s objectives and its role in easing the tax litigation process in India. As more taxpayers opt for such schemes, it is likely to contribute to a more efficient and taxpayer-friendly resolution process in the country.

Renu, New Delhi vs. ITO Ward-2, Karnal: Withdrawal of Appeal under Vivad Se Vishwas Scheme for AY 2011-12