Facts of the Case

The assessee, Mr. Sanjay Kumar Gupta, had filed an appeal before the Income Tax Appellate Tribunal (ITAT), Allahabad Bench, challenging the order passed by the Commissioner of Income Tax (Appeals) for the relevant assessment year under the Income-tax Act, 1961.

During the pendency of the appeal, the assessee opted to settle the dispute under the Direct Tax Vivad Se Vishwas Scheme, 2020 (VSVS), which was introduced to resolve pending tax litigation. The declaration filed under the scheme was accepted by the designated authority, and Form No. 3 was issued specifying the amount payable for settlement.

In view of the acceptance under the scheme, the assessee requested that the appeal pending before the Tribunal be treated as withdrawn.

Issues Involved

Whether the appeal pending before the Tribunal should be decided on merits or dismissed as withdrawn when the assessee has opted for settlement under the Vivad Se Vishwas Scheme, 2020 and the declaration has been accepted.

Petitioner’s (Assessee’s) Arguments

  • The assessee had filed a declaration under the Vivad Se Vishwas Scheme, 2020 for settlement of the pending dispute.
  • The designated authority had accepted the declaration.
  • Form No. 3 had been issued determining the payable amount.
  • In view of the settlement, the assessee did not wish to pursue the appeal and requested permission to withdraw the same.

Respondent’s (Department’s) Arguments

The Departmental Representative did not object to the withdrawal of the appeal, acknowledging that the dispute had been settled under the statutory scheme.

Court Order / Findings

  • The assessee had opted for settlement under the Vivad Se Vishwas Scheme, 2020.
  • The designated authority had issued Form No. 3 confirming acceptance of the declaration.
  • Since the dispute stood resolved under the scheme, continuation of appellate proceedings would serve no useful purpose.

Important Clarification

The dismissal of the appeal was procedural following settlement under a statutory dispute resolution mechanism and does not constitute adjudication on the merits of the issues involved.

Link to download the order –

https://itat.gov.in/public/files/upload/1610019856-57%20Alld%202019%20Sanjay%20Kr.%20Gupta%20VSVS.pdf

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