Saga Properties Pvt Ltd vs. ITO Ward-22(2), New Delhi: Withdrawal of Appeal Under Vivad Se Vishwas for AY 2010-11

Saga Properties Pvt Ltd vs. ITO Ward-22(2), New Delhi: Withdrawal of Appeal Under Vivad Se Vishwas for AY 2010-11

The Income Tax Appellate Tribunal (ITAT), Delhi Bench ‘A,’ conducted a hearing via video conferencing on the case filed by Saga Properties Pvt Ltd against the Income Tax Officer, Ward-22(2), New Delhi concerning the assessment year 2010-11. The case, registered as ITA No. 6462/DEL/2019, was filed on 1st August 2019, with the final order issued on 26th November 2020.

Background of the Case

Saga Properties Pvt Ltd, a company based in New Delhi, had filed an appeal challenging the assessment order passed by the Income Tax Officer (ITO) for the assessment year 2010-11. The appeal was against the findings and assessments made by the ITO, which were subsequently upheld by the Commissioner of Income Tax (Appeals)-8, New Delhi (CIT(A)). The primary issues in the appeal were related to tax arrears assessed by the department, which the company contested.

However, during the pendency of the appeal, the Government of India introduced the Vivad Se Vishwas Scheme, 2020, a scheme designed to resolve disputes related to direct taxes. The scheme provided an opportunity for taxpayers to settle their tax disputes by paying a percentage of the disputed tax amount, leading to the closure of the case and relief from further litigation.

Appellant’s Request for Withdrawal

In light of the introduction of the Vivad Se Vishwas Scheme, 2020, Saga Properties Pvt Ltd decided to opt for this route to settle its tax arrears. On 23rd November 2020, the appellant submitted a letter via email to the ITAT, expressing their intent to withdraw the appeal. The letter mentioned that the company had decided to settle the dispute under the Vivad Se Vishwas Scheme and had accordingly filed the necessary declarations under Section 4 of The Direct Tax Vivad Se Vishwas Act, 2020.

The appellant also provided a certificate under Section 5(1) of The Direct Tax Vivad Se Vishwas Act, 2020, which confirmed that the necessary steps had been taken to settle the tax arrears for the assessment year in question.

Tribunal’s Decision

During the hearing held on 26th November 2020, the appeal was presented before the ITAT Bench comprising Shri G.S. Pannu, Vice President, and Smt. Madhumita Roy, Judicial Member. The respondent, represented by Shri M. Baranwal, Senior Departmental Representative (DR), had no objection to the withdrawal request made by the appellant.

After considering the appellant’s request and the lack of objection from the Revenue, the Tribunal accepted the withdrawal of the appeal. Consequently, the appeal filed by Saga Properties Pvt Ltd was dismissed as withdrawn. The Tribunal’s order emphasized that the withdrawal was in line with the provisions of the Vivad Se Vishwas Scheme, which aims to reduce litigation and settle disputes amicably.

Significance of the Vivad Se Vishwas Scheme

The Vivad Se Vishwas Scheme, 2020, was introduced as part of the Union Budget 2020 to resolve the long-pending tax disputes in India. The scheme was a bold step towards reducing the burden of litigation on both taxpayers and the Income Tax Department. Under this scheme, taxpayers were allowed to pay the disputed tax amount with a waiver of interest and penalty, thereby closing the dispute.

The scheme was particularly beneficial for companies like Saga Properties Pvt Ltd, which faced lengthy litigation processes. By opting for the scheme, the company could resolve its tax disputes swiftly and avoid the uncertainties associated with prolonged litigation.

Moreover, the scheme allowed the government to collect revenue without incurring the costs associated with ongoing litigation. The scheme was designed to be a win-win for both the government and the taxpayers, fostering a more cooperative tax environment.

Conclusion

In conclusion, the withdrawal of the appeal by Saga Properties Pvt Ltd under the Vivad Se Vishwas Scheme, 2020, highlights the effectiveness of the scheme in resolving tax disputes. The decision by the ITAT to dismiss the appeal as withdrawn underscores the importance of such alternative dispute resolution mechanisms in reducing litigation and providing relief to taxpayers.

The case of Saga Properties Pvt Ltd serves as an example for other taxpayers who may be considering whether to continue litigation or opt for settlement under similar schemes. The swift resolution of the case through the withdrawal under Vivad Se Vishwas demonstrates the benefits of such a choice, especially in cases where the cost and time involved in litigation may outweigh the benefits.

The ITAT’s order, pronounced on 26th November 2020, is a testament to the growing reliance on alternative dispute resolution mechanisms in the Indian tax system. As more taxpayers opt for schemes like Vivad Se Vishwas, it is likely that the burden of litigation on the Income Tax Department will continue to decrease, paving the way for a more efficient and taxpayer-friendly system.

Order Pronounced in the Open Court on 26th November 2020

Signed by:
Judicial Member: Smt. Madhumita Roy
Vice President: Shri G.S. Pannu

Date of Pronouncement: 26th November 2020

Saga Properties Pvt Ltd vs. ITO Ward-22(2), New Delhi: Withdrawal of Appeal Under Vivad Se Vishwas for AY 2010-11