Withdrawal of Appeal in the Case of Airads Ltd. vs DCIT Circle-2(1), New Delhi for AY 2007-08 under Vivad Se Vishwas Scheme

Withdrawal of Appeal in the Case of Airads Ltd. vs DCIT Circle-2(1), New Delhi for AY 2007-08 under Vivad Se Vishwas Scheme

The Income Tax Appellate Tribunal (ITAT) Delhi Bench ‘A’, presided over the case of Airads Ltd., a company based in New Delhi, against the Deputy Commissioner of Income Tax, Circle-2(1), New Delhi, concerning the assessment year 2007-08. The hearing was conducted through video conferencing, and the order was pronounced on 7th December 2020 by Shri G.S. Pannu, Vice President, and Shri Amit Shukla, Judicial Member.

Background of the Case

The case involves cross-appeals filed by both the Revenue and the assessee, Airads Ltd., along with a cross-objection filed by the assessee. These appeals were directed against the orders passed by the Commissioner of Income Tax (Appeals), New Delhi, dated 18th July 2016 and 25th June 2019, respectively. The core issue in these appeals related to certain tax arrears for the assessment year 2007-08.

During the proceedings, the learned counsel for the assessee, Ms. Soumya Jain, submitted a letter dated 2nd December 2020, requesting the withdrawal of the appeal and the cross-objection. The letter indicated that the assessee had opted to settle the dispute under the ‘Vivad Se Vishwas Scheme, 2020’. This scheme was introduced by the Government of India to reduce tax-related litigation by allowing taxpayers to settle their disputes by paying the disputed tax amount without additional interest or penalties.

Proceedings and Decision

Both parties were represented during the virtual hearing, with the Revenue being represented by Senior Departmental Representative Shri Shiv Swaroop Singh. Upon reviewing the request, the Tribunal noted that the learned Senior DR did not object to the withdrawal of the appeals and cross-objection.

Consequently, the Tribunal accepted the request for withdrawal. It was observed that the appeal filed by the Revenue in ITA No.5354/Del/2016 and the cross-objection filed by the assessee in C.O. No.124/Del/2017 were dismissed as infructuous due to the settlement under the Vivad Se Vishwas Scheme. The Tribunal also dismissed the appeal of the assessee in ITA No.6651/Del/2019 as withdrawn, given that the dispute had been resolved under the same scheme.

Significance of the ‘Vivad Se Vishwas Scheme, 2020’

The ‘Vivad Se Vishwas Scheme, 2020’ was designed to provide a mechanism for taxpayers to resolve long-standing disputes with the tax authorities by paying a percentage of the disputed tax. The scheme’s objective was to reduce the burden on the judiciary and allow taxpayers to settle their disputes amicably. By opting for this scheme, Airads Ltd. took advantage of the opportunity to settle its tax arrears without further litigation, thereby avoiding the accrual of additional penalties and interest.

The withdrawal of the appeal and cross-objection by Airads Ltd. underscores the effectiveness of the Vivad Se Vishwas Scheme in achieving its intended purpose of reducing tax litigation. The scheme has been widely appreciated for offering taxpayers a clear and straightforward path to resolving disputes with the Income Tax Department, particularly for cases that have been pending for several years.

Conclusion

The ITAT’s order on 7th December 2020 formally concluded the appeals and cross-objection filed by Airads Ltd. and the Revenue concerning the assessment year 2007-08. The Tribunal’s acceptance of the withdrawal request highlights the success of the ‘Vivad Se Vishwas Scheme, 2020’ in facilitating the resolution of tax disputes in an efficient and taxpayer-friendly manner.

This case serves as an example of how the scheme provides a viable alternative to prolonged litigation, allowing taxpayers to resolve their disputes and focus on their business operations without the overhang of unresolved tax issues.

The decision was announced in the open court during the virtual hearing, with the formal dismissal of the appeals and cross-objection, bringing the matter to a close.

Withdrawal of Appeal in the Case of Airads Ltd. vs DCIT Circle-2(1), New Delhi for AY 2007-08 under Vivad Se Vishwas Scheme