Facts of the Case

The assessee, Rakesh Kumar Sahi, had pending income-tax disputes arising from assessment proceedings. In order to resolve the dispute, the assessee filed a declaration under the Direct Tax Vivad Se Vishwas Scheme, 2020. The designated authority rejected or did not grant the benefit sought under the Scheme, leading to continuation of the dispute. The assessee challenged the action, contending that the declaration fulfilled statutory requirements and that denial of relief was unjustified.

Issues Involved

  1. Whether the assessee was eligible to avail benefits under the Vivad Se Vishwas Scheme.
  2. Whether the declaration filed satisfied the statutory conditions prescribed under the Scheme.
  3. Whether the rejection or non-acceptance of the declaration by the authorities was valid in law.
  4. Scope of relief available where disputed tax had been determined or proceedings were pending.

Petitioner’s Arguments (Assessee’s Contentions)

  • The assessee contended that the declaration was filed in accordance with the provisions of the Scheme and should have been accepted.
  • It was argued that the Scheme is a beneficial legislation intended to reduce litigation and therefore should be interpreted liberally.
  • The assessee submitted that denial of settlement defeats the object of the Scheme and causes undue hardship.
  • It was further contended that all procedural requirements had been complied with and the dispute qualified as “disputed tax.”

Respondent’s Arguments (Department’s Contentions)

  • The Revenue contended that the assessee did not satisfy the eligibility conditions under the Scheme.
  • It was argued that the declaration contained deficiencies or did not cover the disputed demand in the manner prescribed.
  • The Department maintained that acceptance of declarations must strictly comply with statutory provisions and guidelines.
  • It was submitted that the authority acted within jurisdiction in rejecting or not processing the declaration.

Court Order / Findings (ITAT Decision)

The Tribunal examined the object, scope, and statutory framework of the Vivad Se Vishwas Scheme. It evaluated whether the assessee’s case fell within the ambit of “disputed tax” eligible for settlement and whether procedural compliance had been achieved.

The Tribunal emphasized that dispute resolution schemes are designed to reduce litigation and should be applied in a manner consistent with legislative intent, while still adhering to statutory conditions. The validity of the rejection was assessed in light of the facts, documentation, and legal provisions governing the Scheme. Relief was granted or directions issued based on whether the rejection was found legally sustainable.

 Important Clarification

  • The Vivad Se Vishwas Scheme is a one-time dispute resolution mechanism and eligibility depends strictly on statutory definitions.
  • Filing of declaration alone does not guarantee acceptance; compliance with prescribed conditions is essential.
  • Authorities must balance strict adherence to law with the Scheme’s objective of minimizing litigation.
  • Procedural defects may be curable depending on circumstances and interpretation of the Scheme.

Link to download the order - https://itat.gov.in/public/files/upload/1610686886-385%20Alld%202018%20Rakesh%20Kumar%20Sahi%20VSVS.pdf

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