Sky High Landcon Pvt Ltd vs. ITO Karnal: Tax Dispute Settlement under Vivad Se Vishwas Scheme for AY 2017-18

Introduction

The case of Sky High Landcon Pvt Ltd vs. ITO (TDS), Karnal, Haryana, presented before the Income Tax Appellate Tribunal (ITAT) for the assessment year 2017-18, showcases the application of the Vivad Se Vishwas Scheme, 2020. This case, involving tax disputes under the jurisdiction of the Karnal Income Tax Office, was ultimately resolved through the settlement scheme introduced by the Indian government to reduce litigation.

Case Background

Sky High Landcon Pvt Ltd, a company based in Karnal, Haryana, was engaged in a tax dispute with the Income Tax Officer (TDS), Karnal, concerning the assessment year 2017-18. The dispute arose over tax deductions at source (TDS) and other related tax liabilities, leading the company to file an appeal with the ITAT against the order passed by the Commissioner of Income Tax (Appeals) [CIT(A)], Karnal, dated 30th May 2019.

Reasons for Filing the Case

The appellant, Sky High Landcon Pvt Ltd, challenged the CIT(A)’s order that confirmed the tax demands raised by the ITO (TDS), Karnal. The company sought relief from the ITAT, contesting the assessment and the methodology applied by the tax authorities in calculating the disputed tax amounts. The primary contention revolved around the TDS obligations and the resulting tax liabilities for the financial year 2017-18.

The Vivad Se Vishwas Scheme, 2020

The Vivad Se Vishwas Scheme was introduced by the Indian government to facilitate the resolution of pending tax disputes by allowing taxpayers to settle their cases by paying a specified percentage of the disputed tax. This scheme aimed to reduce the burden of litigation on both taxpayers and the government, offering a streamlined process to resolve long-standing disputes.

Appellant’s Decision to Opt for the Scheme

During the course of the proceedings, the appellant, Sky High Landcon Pvt Ltd, decided to withdraw the appeals for the assessment years 2013-14 and 2017-18. The decision was driven by the opportunity to settle the dispute under the Vivad Se Vishwas Scheme. A certificate confirming the settlement of the tax arrears under Section 5(1) of The Direct Tax Vivad Se Vishwas Act, 2020, was submitted to the ITAT.

Tribunal’s Decision

The ITAT, consisting of Shri G.S. Pannu, Vice President, and Shri Kul Bharat, Judicial Member, acknowledged the appellant’s request to withdraw the appeals. With no objections raised by the respondent, the appeals were dismissed as withdrawn. The tribunal’s decision was aligned with the objectives of the Vivad Se Vishwas Scheme, facilitating a quicker and less contentious resolution to the tax dispute.

Significance of the Case

This case is significant as it illustrates the practical benefits of the Vivad Se Vishwas Scheme for both the taxpayer and the tax authorities. By opting for the scheme, Sky High Landcon Pvt Ltd avoided prolonged litigation, which could have incurred additional costs and uncertainties. The resolution under this scheme not only provided closure to the case but also demonstrated the effectiveness of the government’s initiative in addressing tax-related disputes.

Conclusion

The case of Sky High Landcon Pvt Ltd vs. ITO (TDS), Karnal, serves as an example of how the Vivad Se Vishwas Scheme can be effectively utilized to resolve tax disputes. The decision to settle the case under this scheme highlights the advantages of opting for a more streamlined and cooperative approach to resolving tax liabilities. This outcome benefited both the appellant and the tax authorities, contributing to the overall reduction in litigation within the tax system.

Sky High Landcon Pvt Ltd vs. ITO Karnal: Tax Dispute Settlement under Vivad Se Vishwas Scheme for AY 2017-18