Facts of the Case

The assessee, M/s Jagan Nath Madan Lal, filed an appeal before the Income-Tax Appellate Tribunal, Allahabad Bench, being ITA No. 176/ALLD/2017, for the Assessment Year 2001-02 against the penalty order passed by the Assessing Officer under Section 271(1)(c) of the Income-tax Act, 1961.

During appellate proceedings, the assessee communicated to the Tribunal that he had applied for settlement of the dispute with the Income-tax Department under the provisions of the Vivad Se Vishwas Scheme, 2020 (VSVS) and that the department had accepted the application, issuing the requisite acknowledgment.

Issues Involved

  1. Whether the appeal before the Tribunal should proceed despite the assessee opting for settlement under the VSVS Scheme.
  2. Whether the Tribunal could dismiss the appeal as withdrawn upon the assessee’s request following VSVS acceptance.

Petitioner’s Arguments (Assessee)

  • The assessee informed the Tribunal that he had elected to settle his outstanding tax disputes with the department under the Vivad Se Vishwas Scheme, 2020.
  • The department acknowledged acceptance of the VSVS application, confirming the settlement process.
  • The assessee prayed that the appeal pending before the Tribunal be dismissed as withdrawn as a consequence of opting for VSVS.

Respondent’s Arguments (Department)

  • The Department did not object to the request for withdrawal of the appeal following the acknowledgement of settlement under the VSVS Scheme.

Tribunal Order / FINDINGS (ITAT)

  • The assessee had applied for settlement of the tax dispute under the Vivad Se Vishwas Scheme, 2020 (VSVS).
  • The department had issued Form No. 3 acknowledging acceptance of the VSVS application.
  • On account of the aforesaid voluntary settlement, the assessee requested that his appeal be dismissed as withdrawn.

The Tribunal allowed the prayer, observing that since the assessee had chosen to settle the dispute with the department under the VSVS Scheme and the department did not oppose the withdrawal, the appeal was dismissed as withdrawn

Important Clarification by the Tribunal

  • An appeal pending before the Tribunal can be withdrawn upon the assessee’s request where a settlement under an approved scheme — such as the Vivad Se Vishwas Scheme, 2020 — has been concluded.
  • The Tribunal’s order does not reflect a substantive adjudication on merits but a procedural outcome consequent to settlement.

Link to download the order –

https://itat.gov.in/public/files/upload/1615802231-ITA%20176_jagannathmadanlal-VSVS.pd

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