Withdrawal of Appeal Due to Vivad Se Vishwas Scheme – Panafic Industrials Ltd vs ITO Ward-19(3), New Delhi

Case Summary: Panafic Industrials Ltd vs ITO Ward-19(3), New Delhi

Case Number: ITA 6050/DEL/2019
Appellant: Panafic Industrials Ltd, New Delhi
Respondent: Income Tax Officer, Ward-19(3), New Delhi
Assessment Year: 2011-12
Case Filed On: 15th July 2019
Order Type: Final Tribunal Order
Date of Order: 15th June 2022
Pronounced On: 15th June 2022

Introduction

The case of Panafic Industrials Ltd vs ITO Ward-19(3), New Delhi, concerns an appeal filed by the appellant against the assessment order passed for the assessment year 2011-12. The appeal was initially lodged to contest the findings of the Assessing Officer (AO) regarding discrepancies in the company’s income tax returns. However, following the introduction of the Vivad Se Vishwas scheme under the Direct Tax Vivad Se Vishwas Act, 2020, the appellant sought to withdraw the appeal after availing of the benefits provided under the scheme.

Background of the Case

Panafic Industrials Ltd, a company based in New Delhi, filed its income tax return for the assessment year 2011-12. During the scrutiny assessment, certain issues were identified by the AO, leading to an assessment order that the appellant found unfavorable. Consequently, Panafic Industrials Ltd filed an appeal before the Commissioner of Income Tax (Appeals)-7, New Delhi, challenging the AO’s order.

Appeal Before the Commissioner (Appeals)

The appeal was duly heard by the Commissioner of Income Tax (Appeals)-7, New Delhi. However, the appeal was dismissed by the Commissioner, leading the appellant to approach the Income Tax Appellate Tribunal (ITAT) for further redressal. The appeal was registered as ITA No. 6050/DEL/2019, and the proceedings continued until a significant change occurred in the taxation landscape.

Vivad Se Vishwas Scheme

In 2020, the Government of India introduced the Vivad Se Vishwas scheme under the Direct Tax Vivad Se Vishwas Act, 2020. The scheme aimed to resolve pending tax disputes by providing taxpayers an opportunity to settle their cases by paying a determined amount and withdrawing any related appeals. The scheme was intended to reduce litigation and facilitate a quicker resolution of disputes.

Panafic Industrials Ltd opted to avail the benefits of the Vivad Se Vishwas scheme. The company filed the necessary application under the scheme, which was accepted by the Income Tax Department. In response, the department issued Form No. 5, certifying the settlement of the tax dispute under the scheme.

Proceedings Before the ITAT

Given that the appellant had settled the dispute under the Vivad Se Vishwas scheme, Panafic Industrials Ltd submitted an application to the ITAT to withdraw the pending appeal. The application, dated 13th June 2022, was presented before the Tribunal during the hearing on 13th June 2022.

The appellant was represented by Ms. Supriya Mehta, Ld. Chartered Accountant (CA), while the respondent was represented by Shri Toufel Tahir, Ld. Senior Departmental Representative (DR). The DR did not contest the appellant’s application for withdrawal, acknowledging that the dispute had been resolved under the Vivad Se Vishwas scheme.

Tribunal’s Decision

After considering the application for withdrawal and reviewing Form No. 5 issued by the Income Tax Department, the ITAT accepted the appellant’s request. The Tribunal observed that the appeal no longer required adjudication as the dispute had been settled under the Vivad Se Vishwas scheme. Consequently, the Tribunal dismissed the appeal as withdrawn.

The order, signed by the Judicial Member Shri N.K. Choudhry and the Accountant Member Shri Anil Chaturvedi, was pronounced in the open court on 15th June 2022. The Tribunal’s decision marked the conclusion of the tax dispute between Panafic Industrials Ltd and the Income Tax Department for the assessment year 2011-12.

Conclusion

The appeal filed by Panafic Industrials Ltd against the assessment order for the year 2011-12 was dismissed by the ITAT as withdrawn. The withdrawal was made after the appellant availed the benefits of the Vivad Se Vishwas scheme, which facilitated the resolution of the tax dispute without further litigation. This case illustrates the effectiveness of the Vivad Se Vishwas scheme in reducing tax litigation and enabling taxpayers to resolve their disputes efficiently.

The final outcome of this case underscores the importance of alternative dispute resolution mechanisms in the Indian tax system, which can save both taxpayers and the tax authorities time and resources. The Vivad Se Vishwas scheme has proven to be a successful initiative in this regard, providing a win-win situation for all parties involved.

Order Pronounced in Open Court: 15th June 2022

Judicial Members: Shri Anil Chaturvedi and Shri Narender Kumar Choudhry

Assistant Registrar: ITAT, New Delhi

Withdrawal of Appeal Due to Vivad Se Vishwas Scheme – Panafic Industrials Ltd vs ITO Ward-19(3), New Delhi