Samvardhana Motherson International Ltd., New Delhi vs JCIT Circle-22(1), New Delhi: Withdrawal Under Vivad Se Vishwas Scheme for AY 2015-16

Samvardhana Motherson International Ltd., New Delhi vs JCIT Circle-22(1), New Delhi: Withdrawal Under Vivad Se Vishwas Scheme for AY 2015-16

Case Number: ITA 6439/DEL/2019
Appellant: Samvardhana Motherson International Ltd., New Delhi
Respondent: JCIT Circle-22(1), New Delhi
Assessment Year: 2015-16
Date of Order: 2020-12-29
Order Type: Final Tribunal Order
Case Filed On: 2019-08-01

Background of the Case

This case involves an appeal filed by Samvardhana Motherson International Ltd., New Delhi, against the Joint Commissioner of Income Tax (JCIT), Circle-22(1), New Delhi. The appeal was filed for the assessment year 2015-16, challenging the assessment order passed by the JCIT on 14th June 2019. The appellant is a prominent company engaged in the automotive components industry, and the appeal was part of the litigation process related to its tax assessment.

The dispute arose out of certain adjustments and disallowances made by the JCIT in the assessment order, which the appellant company believed to be unjustified. Consequently, the company decided to contest the assessment by filing an appeal before the Income Tax Appellate Tribunal (ITAT), Delhi Bench.

Vivad Se Vishwas Scheme, 2020

During the pendency of the appeal, the Government of India introduced the Vivad Se Vishwas Scheme (VSVS), 2020, as a measure to resolve tax disputes and reduce the backlog of cases. The scheme provided an opportunity for taxpayers to settle their disputes by paying a specified amount of tax, thereby avoiding prolonged litigation.

Recognizing the benefits of the Vivad Se Vishwas Scheme, Samvardhana Motherson International Ltd. opted to resolve its dispute under the scheme. On 23rd December 2020, the company’s counsel, Ms. Shruti Khimta, submitted a letter to the Tribunal requesting the withdrawal of the appeal, as the company had already filed Form No. 1 and Form No. 2 under the Vivad Se Vishwas Scheme. A certificate under Section 5(1) of The Direct Tax Vivad Se Vishwas Act, 2020, was also submitted to confirm the settlement of the tax arrears for the assessment year under consideration.

Tribunal’s Order

The case was heard on 29th December 2020 through video conferencing, with the Tribunal comprising Shri G.S. Pannu, Vice President, and Shri K.N. Chary, Judicial Member. During the hearing, the Tribunal considered the request for withdrawal of the appeal in light of the appellant’s participation in the Vivad Se Vishwas Scheme.

The Tribunal acknowledged the request and noted that the appellant had chosen to settle the dispute by opting for the Vivad Se Vishwas Scheme. Accordingly, the Tribunal decided to dismiss the appeal as withdrawn. The order also included a caveat that in case the dispute relating to the tax arrears was not ultimately resolved under the Vivad Se Vishwas Scheme, the appellant would have the liberty to approach the Tribunal for reinstatement of the appeal. The Revenue, represented by Shri Gaurav Dudeja, Senior Departmental Representative (DR), had no objection to this caveat.

The order was pronounced on the same day, 29th December 2020, concluding the proceedings for the assessment year 2015-16. The appeal was treated as dismissed for statistical purposes and consigned to the records of the Tribunal.

Conclusion

The case of Samvardhana Motherson International Ltd., New Delhi vs JCIT Circle-22(1), New Delhi, for the assessment year 2015-16 highlights the effective use of the Vivad Se Vishwas Scheme as a tool for resolving tax disputes. By opting for the scheme, the appellant was able to settle the dispute efficiently, avoiding the need for further litigation.

This case underscores the importance of alternative dispute resolution mechanisms in the context of tax litigation. The Vivad Se Vishwas Scheme provided a practical solution for taxpayers to settle their disputes with the tax authorities, thereby reducing the burden on judicial bodies like the ITAT.

The Tribunal’s order reflects its role in facilitating such resolutions, ensuring that the process is carried out in a fair and transparent manner. The inclusion of a caveat allowing the appellant to reinstate the appeal if the settlement under the scheme did not materialize demonstrates the Tribunal’s commitment to upholding the rights of taxpayers while promoting the efficient resolution of disputes.

The success of the Vivad Se Vishwas Scheme in cases like this one highlights the potential for similar initiatives in the future, aimed at reducing the backlog of cases and providing taxpayers with a means to resolve disputes without the need for prolonged litigation. The scheme’s impact on the tax dispute resolution landscape is likely to be felt for years to come, as more taxpayers take advantage of such opportunities to settle their disputes amicably.

Samvardhana Motherson International Ltd., New Delhi vs JCIT Circle-22(1), New Delhi: Withdrawal Under Vivad Se Vishwas Scheme for AY 2015-16