What did the Tribunal hold?

Following the Madras High Court's precedent, the ITAT treated the assessee's appeals as withdrawn due to their opting for the Vivad Se Vishwas Scheme. The assessee was granted liberty to restore the appeals if the scheme's outcome was unfavorable.

The assessee opted to resolve tax disputes under the Vivad Se Vishwas Scheme. The Income Tax Appellate Tribunal (ITAT) noted this development and a similar ruling by the Madras High Court.

What were the issues?

Whether the assessee's decision to opt for the Vivad Se Vishwas Scheme necessitates the withdrawal of pending appeals before the ITAT.

Purna Jatin Sheth vs ITO | ITAT Mumbai 2021

Income Tax Appellate Tribunal, “SMC” Bench, Mumbai

Before: Shri Shamim Yahya

For Appellant: Shri Ashish Pophare

For Respondent: Shri Ashish Pophare

Hearing: 15.11.2021Pronounced: 18.11.2021

Heard together (2 matters)

I.T.A. No.7466/Mum/2018

I.T.A. No.61/Mum/2019

Read from the judgment's own cause title. This page is filed under one of them.

These appeals by the assessee are directed against the respective order of learned Commissioner of Income Tax (Appeals) and pertain to the respective assessment years.

2 Purna Jatin Sheth

At the outset, It is noted that the assessee has opted for solution of dispute under the Vivad Se Vishwas Scheme.

I note that in a similar situation, Hon'ble Madras High Court has in an appeal in the case of M/s. Nannusamy Mohan (HUF) Vs. ACIT vide order dated 16.10.2020 held as under :-

“3. The learned counsel for the appellant/assessee, on instructions, submitted that the appellant/assessee intends to avail the benefit of Vivad Se Vishwas Scheme (‘VVS Scheme’ for brevity) and in this regard, the assessee is taking steps to file the application/declaration in Form No. I.

It may not be necessary for this Court to decide the Substantial Questions of Law framed for consideration on account of certain subsequent developments. The Government of India enacted the Direct Tax Vivad Se Vishwas Act, 2020 (Act 3 of 2020) to provide for resolution of disputed tax and for matters connected therewith or incidental thereto. The Act of the Parliament received the assent of the President on 17th March 2020 and published in the Gazette of India on 17th March 2020.

In terms of the said Act, the assessee has been given an option to put an end to the tax disputes, which may be pending at different levels either before the First Appellate Authority or before the Tribunal or before the High Court or before the Hon'ble Supreme Court of India. Under Section 2(j) “disputed tax” has been defined. In terms of Section 3, where a declarant means a person, who files a declaration under Section 4 on or before the last date files a declaration to the designated authority in accordance with the provisions of Section 4 in respect of tax arrears, then, notwithstanding anything contained in the Income Tax Act or any other law for the time being in force, the amount payable by the declarant shall be determined in terms of Section 3(a-c) thereunder.

6. The First Proviso to Section 3 states that in case, where an Appeal or Writ Petition or Special Leave Petition is filed by the Income Tax authority on any issue before the Appellate Forum, the amount payable shall be one-half of the amount in the table stipulated in Section 3 calculated on such issue, in such a manner as may be prescribed. The second proviso deals with the cases, where the matter is before the Commissioner (Appeals) or before the Dispute Resolution Panel. The third proviso deals with cases, where the issue is pending before the Income Tax Appellate Tribunal. The filing of the declaration is as per Section 4 of the Act and the particulars to be furnished are also mentioned in the Sub Sections of Section 4, Section 5 of the Act deals with the time and manner of the payment and Section 6 deals with Immunity from initiation of proceedings in respect of offence and imposition of penalty in certain cases. Section 9 of the Act deals with cases, where the Act 3 of 2020 will not be applicable.

3 Purna Jatin Sheth

As observed, the assessee is given liberty to restore this appeal in the event the ultimate decision to be taken on the declaration to be filed by the assessee under Section 4 of the said Act is not in favour of the assessee. If such a prayer is made, the Registry shall entertain the prayer without insisting upon any application to be filed for condonation of delay in restoration of the appeal and on such request made by the assessee by filing a Miscellaneous Petition for Restoration, the Registry shall place such petition before the Division Bench for orders.

In the light of the above, We direct the appellant/assessee to file the Form No.I on or before 20.11.2020 and the competent authority shall process the application/declaration in accordance with the Act and pass appropriate orders as expeditiously as possible preferably within a period of six (6) weeks from the date on which the declaration is filed in the proper form.”

4. Accordingly, respectfully following the above and noting the fact that the assessee is opting for resolution of dispute under VSVS Scheme in the present case, I treat these appeals being disposed off as withdrawn.

5. The assessee is given liberty for restoration of appeals in accordance with paragraph 7 of the Hon'ble High Court order as above.

In the result, these appeals by the assessee are disposed of by treating the same as withdrawn.

Pronounced in the open court on 18. 11.2021

PURNA JATIN SHETH,MUMBAI vs. ITO WARD 12(1)(1), MUMBAI

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