Shalibhader Metals and Alloys Pvt. Ltd. vs ITO: Settlement of Tax Dispute under Vivad Se Vishwas Scheme for AY 2007-08

Case Summary: Shalibhader Metals and Alloys Pvt. Ltd., New Delhi vs ITO, Ward 23(1), New Delhi

Case Number: ITA 6082/DEL/2019
Appellant: Shalibhader Metals and Alloys Pvt. Ltd., New Delhi
Respondent: ITO, Ward 23(1), New Delhi
Assessment Year: 2007-08
Case Filed On: 17th July 2019
Order Type: Final Tribunal Order
Date of Order: 11th September 2020
Pronounced On: 11th September 2020

Introduction

The case of Shalibhader Metals and Alloys Pvt. Ltd. vs ITO involves a tax dispute for the Assessment Year (AY) 2007-08. The appellant, Shalibhader Metals and Alloys Pvt. Ltd., filed an appeal before the Income Tax Appellate Tribunal (ITAT) Delhi against the order of the Commissioner of Income Tax (Appeals) [CIT(A)] dated 15th May 2019. However, during the proceedings, the appellant opted to settle the dispute under the Vivad Se Vishwas Scheme, 2020, leading to the withdrawal of the appeal.

Background of the Case

Shalibhader Metals and Alloys Pvt. Ltd., a company engaged in the business of manufacturing and trading metals and alloys, had filed its income tax return for AY 2007-08. The return was subjected to scrutiny by the Income Tax Department, resulting in certain additions and adjustments to the company’s income. Dissatisfied with the assessment order, Shalibhader Metals and Alloys Pvt. Ltd. filed an appeal with the CIT(A), which was partially successful but left some issues unresolved. Consequently, the company escalated the matter to the ITAT Delhi by filing an appeal.

Grounds of Appeal

The appellant challenged the CIT(A)’s order on various grounds, including:

• The CIT(A) allegedly erred in confirming certain additions made by the Assessing Officer (AO) without proper consideration of the evidence and submissions provided by the appellant.
• The appellant contended that the additions were unjustified and based on incorrect interpretations of the provisions of the Income Tax Act, 1961.
• The appellant sought relief from the ITAT by requesting the deletion of the disputed additions and a favorable adjustment to its taxable income.

Proceedings Before the ITAT

The case was listed for hearing before the Delhi Friday Bench ‘Friday-A’ of the ITAT, comprising Vice President Shri G.S. Pannu and Judicial Member Shri K. Narasimha Chary. During the virtual hearing on 11th September 2020, the appellant’s counsel, Shri Vaibhav Jain, informed the tribunal that the company intended to settle the dispute under the Vivad Se Vishwas Scheme, 2020. This scheme, introduced by the Government of India, allows taxpayers to resolve their pending tax disputes by paying a specified amount and withdrawing their appeals.

The appellant’s counsel submitted a letter requesting the withdrawal of the appeal, stating that the company had opted to settle the tax arrears for AY 2007-08 under the Vivad Se Vishwas Scheme. The Senior Departmental Representative (DR), Ms. Rakhi Vimal, representing the Revenue, raised no objection to the withdrawal request.

Vivad Se Vishwas Scheme, 2020

The Vivad Se Vishwas Scheme, 2020, was enacted to reduce litigation and expedite the resolution of tax disputes. It provides taxpayers with an opportunity to settle their disputes by paying a percentage of the disputed tax amount and obtaining immunity from interest, penalties, and prosecution. The scheme applies to cases pending before various appellate forums, including the ITAT, High Courts, and the Supreme Court of India.

Under the scheme, the taxpayer needs to file a declaration expressing their intent to settle the dispute, followed by payment of the tax arrears. Once the payment is made, the appeal is withdrawn, and the matter is considered settled.

Tribunal’s Decision

The ITAT Delhi, after considering the request from the appellant and the absence of any objection from the Revenue, accepted the withdrawal of the appeal. The tribunal dismissed the appeal as withdrawn, effectively concluding the proceedings related to the tax dispute for AY 2007-08.

The decision to withdraw the appeal and settle the dispute under the Vivad Se Vishwas Scheme reflects the appellant’s intent to resolve the matter amicably and avoid prolonged litigation. The tribunal’s order was pronounced on the same day, 11th September 2020, in the presence of both parties during the virtual hearing.

Conclusion

The case of Shalibhader Metals and Alloys Pvt. Ltd. vs ITO serves as an example of how the Vivad Se Vishwas Scheme, 2020, facilitates the expeditious resolution of tax disputes. By opting for the scheme, the appellant was able to settle the matter and withdraw the appeal, thereby avoiding further litigation and uncertainty.

The ITAT Delhi’s decision to dismiss the appeal as withdrawn underscores the importance of the Vivad Se Vishwas Scheme in reducing the burden on the judiciary and enabling taxpayers to settle their disputes in a cost-effective manner. This case highlights the effectiveness of the scheme in promoting a taxpayer-friendly environment and encouraging voluntary compliance with tax laws.

Order Pronounced in Open Court: 11th September 2020

Judicial Member: Shri K. Narasimha Chary
Vice President: Shri G.S. Pannu

Assistant Registrar: ITAT, New Delhi

Shalibhader Metals and Alloys Pvt. Ltd. vs ITO: Settlement of Tax Dispute under Vivad Se Vishwas Scheme for AY 2007-08