Ruchir Agarwal (HUF) vs. ITO: Settlement Under Vivad Se Vishwas Scheme for AY 2015-16

Case Overview

The case of Ruchir Agarwal (HUF) vs. ITO, Ward 2(2), Moradabad (ITA No. 6376/DEL/2019) pertains to the assessment year 2015-16. The appellant, Ruchir Agarwal (HUF), a Hindu Undivided Family (HUF) based in Moradabad, Uttar Pradesh, challenged the assessment order issued by the Income Tax Officer (ITO) of Ward 2(2), Moradabad. The appeal was filed on 30th July 2019 and later withdrawn under the Direct Tax Vivad Se Vishwas Scheme, 2020.

Background of the Case

The dispute arose when the Income Tax Department assessed the income of Ruchir Agarwal (HUF) for the assessment year 2015-16. The assessment led to a demand for additional tax, which the appellant contested by filing an appeal with the Income Tax Appellate Tribunal (ITAT), Delhi Bench. The appellant sought relief from the tribunal, challenging the basis and calculation of the tax demand.

However, during the pendency of the appeal, the appellant decided to opt for the Direct Tax Vivad Se Vishwas Scheme, 2020. This scheme was introduced by the Government of India as a means to reduce litigation by allowing taxpayers to settle their tax disputes by paying a specified percentage of the disputed tax amount, thereby closing the case without further legal proceedings.

Why the Case Was Filed

The case was filed by Ruchir Agarwal (HUF) to dispute the tax demand raised by the Income Tax Officer for the assessment year 2015-16. The appellant believed that the assessment was incorrect and sought to have it reviewed and overturned by the appellate authorities. However, given the ongoing litigation and the time, effort, and costs involved, the appellant eventually chose to settle the dispute under the Vivad Se Vishwas Scheme, which provided a faster and less burdensome resolution.

The Vivad Se Vishwas Scheme offered a practical solution for taxpayers like Ruchir Agarwal (HUF) to resolve their disputes with the tax authorities. By opting for this scheme, the appellant could pay a reduced amount of the disputed tax and avoid the uncertainty and potential cost of continued litigation.

Tribunal Proceedings

The case was scheduled for a virtual hearing before the ITAT Delhi Bench ‘A’, which included Hon’ble Vice President Shri G.S. Pannu and Judicial Member Shri Amit Shukla. The hearing took place on 30th July 2021. Despite being scheduled, no one appeared on behalf of the appellant at the time of the virtual hearing.

Subsequently, the tribunal received a letter dated 5th August 2021 from the appellant, informing them that Ruchir Agarwal (HUF) had opted to settle the tax dispute under the Vivad Se Vishwas Scheme, 2020. The letter, which was received via email, also indicated that a certificate under Section 5(1) of the Direct Tax Vivad Se Vishwas Act, 2020 had been filed to confirm the settlement.

The respondent, represented by Senior Departmental Representative (DR) Shri M. Barnwal, raised no objections to the appellant’s request to withdraw the appeal under the scheme.

Tribunal’s Decision

In light of the appellant’s decision to withdraw the appeal under the Vivad Se Vishwas Scheme, the tribunal accepted the request and dismissed the appeal. The tribunal noted that the appeal was withdrawn because the appellant had resolved the tax arrears for the assessment year 2015-16 under the provisions of the Vivad Se Vishwas Scheme.

The tribunal’s order was pronounced on the same day, 30th July 2021, immediately following the virtual hearing. The dismissal of the appeal was final, subject to the condition that if the dispute was not ultimately resolved under the Vivad Se Vishwas Scheme, the appellant could approach the tribunal to reinstate the appeal. The tribunal stated that it would consider such an application in accordance with the law, and the respondent had no objections to this stipulation.

Significance of the Case

This case illustrates the effectiveness of the Vivad Se Vishwas Scheme in providing a practical and efficient resolution to tax disputes. By choosing to settle under the scheme, Ruchir Agarwal (HUF) was able to resolve the tax arrears for the assessment year 2015-16 without further litigation, saving both time and resources.

The Vivad Se Vishwas Scheme, which aimed to reduce the backlog of tax litigation, offered taxpayers a clear and structured pathway to settle disputes. The scheme encouraged taxpayers to come forward and pay a reduced amount of the disputed tax, leading to the closure of their cases. For taxpayers facing complex and protracted litigation, this scheme provided an attractive alternative to lengthy and costly legal proceedings.

The case of Ruchir Agarwal (HUF) vs. ITO, Ward 2(2), Moradabad demonstrates how the scheme has been successfully utilized to achieve a fair and timely resolution of tax disputes. It also highlights the judiciary’s support for the scheme and its role in facilitating the settlement process.

Conclusion

The case of Ruchir Agarwal (HUF) vs. ITO, Ward 2(2), Moradabad (ITA No. 6376/DEL/2019) serves as a significant example of how the Vivad Se Vishwas Scheme can be effectively used to settle tax disputes. By opting to withdraw the appeal under the scheme, the appellant was able to resolve the tax arrears for the assessment year 2015-16 without further legal proceedings.

The tribunal’s acceptance of the withdrawal request and the subsequent dismissal of the appeal reflect the judiciary’s endorsement of the Vivad Se Vishwas Scheme. For other taxpayers facing similar disputes, this case illustrates the benefits of utilizing such settlement schemes to achieve a swift and cost-effective resolution to tax-related issues.

Overall, the resolution of this case under the Vivad Se Vishwas Scheme underscores the scheme’s potential to streamline the tax dispute resolution process, benefiting both taxpayers and the tax administration.

Ruchir Agarwal (HUF) vs. ITO: Settlement Under Vivad Se Vishwas Scheme for AY 2015-16