Facts of the Case

The assessee had a pending income-tax dispute under appellate proceedings. During the pendency of the appeal, the assessee opted for settlement under the Direct Tax Vivad se Vishwas Act, 2020, which was introduced to resolve disputed tax matters and reduce litigation.

Subsequently, issues arose regarding the status of the pending appeal and the effect of the declaration filed under the Scheme on the continuation or disposal of the proceedings before the Tribunal.

Issues Involved

  1. Whether an appeal remains maintainable after opting for the Vivad se Vishwas Scheme.
  2. Legal consequences of filing a declaration under the Scheme on pending appellate proceedings.
  3. Whether the Tribunal is required to dismiss or treat the appeal as withdrawn upon settlement.

Petitioner’s Arguments (Assessee)

  • The assessee had opted for the Vivad se Vishwas Scheme to settle the dispute.
  • Upon acceptance of the declaration and compliance with payment requirements, the dispute stood resolved.
  • Therefore, continuation of appellate proceedings was unnecessary and legally untenable.

Respondent’s Arguments (Revenue)

  • The Revenue emphasized that procedural compliance under the Scheme must be complete before granting relief.
  • Until final settlement formalities are fulfilled, the appeal may not automatically abate.
  • Proper verification of the declaration and payment is essential.

Court Order / Findings (ITAT)

  • The Vivad se Vishwas Scheme is intended to put an end to pending tax disputes.
  • Once the assessee opts for the Scheme and fulfills the prescribed conditions, the dispute relating to the specified tax arrears stands resolved.
  • Consequently, the pending appeal becomes infructuous and does not survive for adjudication on merits.

 Important Clarification by the Tribunal

  • Opting for the VSV Scheme results in resolution of the dispute covered by the declaration.
  • Appellate proceedings relating to such dispute are to be treated as withdrawn or infructuous upon completion of Scheme requirements.
  • The Scheme operates as a dispute-resolution mechanism, not merely a procedural option.

Link to download the order -   https://itat.gov.in/public/files/upload/1610535092-ITA%20263AFZALKHAN_VSVS%20(1).pdf

Disclaimer

This content is shared strictly for general information and knowledge purposes only         Readers should independently verify the information from reliable sources. It is not intended to provide legal, professional, or advisory guidance. The author and the organisation disclaim all liability arising from the use of this content. The material has been prepared with the assistance of AI tools.