Facts of the Case

The assessee, Jagdish Housing Company, filed an appeal before the Income Tax Appellate Tribunal (ITAT), Allahabad Bench against the order of the Commissioner of Income Tax (Appeals) dated 11.03.2014 for Assessment Year 1994-95.

During the pendency of the appeal, the assessee opted for settlement under the Direct Tax Vivad Se Vishwas Scheme by filing the required declaration on 17.01.2021. The designated authority issued Form No. 3 on 27.01.2021 determining the tax payable. The assessee subsequently paid the tax demand and submitted Form No. 4 on 23.04.2021.

Issues Involved

  1. Whether an appeal pending before ITAT can be dismissed as withdrawn when the assessee opts for the Vivad Se Vishwas Scheme.
  2. Whether the Department’s failure to issue Form No. 5 affects the withdrawal of the appeal.
  3. Whether the appeal can be revived if the dispute is not finally settled under the Scheme.

Petitioner’s (Assessee’s) Arguments

  • The assessee had validly opted for the Vivad Se Vishwas Scheme by filing the prescribed declarations.
  • Form No. 3 determining the payable amount had been issued by the designated authority.
  • The tax demand was duly paid, and Form No. 4 evidencing payment was submitted.
  • Despite compliance, Form No. 5 had not been issued by the Department.
  • Therefore, the appeal should be permitted to be withdrawn with directions to issue Form No. 5.

Respondent’s (Department’s) Arguments

  • The Department did not dispute that the assessee had opted for the Scheme and paid the tax.
  • It was submitted that Form No. 5 could not be issued due to certain technical glitches.

Court Order / Findings

  • The assessee had opted for the Vivad Se Vishwas Scheme and submitted Forms 1 and 2.
  • Form No. 3 determining the tax liability had been issued by the designated authority.
  • The assessee filed Form No. 4 confirming payment of tax.
  • The assessee also claimed adjustment of ₹5,000 paid earlier as advance tax and self-assessment tax, for which supporting details were provided.
  • Verification of such adjustments was required before issuance of Form No. 5.

Important Clarification

The Tribunal granted liberty to both the assessee and the Department to seek revival of the appeal if the dispute is not ultimately settled under the Scheme.

This clarification ensures that withdrawal does not prejudice either party if the settlement process fails.

  • Procedures relating to settlement of tax disputes through Forms 1, 2, 3, 4, and 5
  • Appellate provisions under the Income-tax Act, 1961 (general appellate framework before ITAT)

 Link to download the order –

https://itat.gov.in/public/files/upload/1643368433-ITA%20No.%20381%20of%202014%20Jagdish%20Housing%20company.pdf

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