Facts of the Case

The appellant/assessee, IFFC Ltd., had filed an appeal before the Delhi High Court concerning deduction under Section 80-I of the Income Tax Act, 1961.

A substantial question of law had earlier been framed regarding whether unabsorbed losses of an industrial undertaking must first be determined and assessed before being set off against profits of subsequent years under Section 80-I(6).

Subsequently, the assessee opted to settle the dispute under the Vivad Se Vishwas Scheme and filed a declaration accordingly. The assessee received a certificate under Section 5(1) of the Act and was required to withdraw pending appeals to complete the settlement process.

 

Issues Involved

  1. Whether unabsorbed losses of an industrial undertaking must be determined before allowing deduction under Section 80-I(6).
  2. Whether the assessee is entitled to withdraw the appeal to avail benefits under the Vivad Se Vishwas Scheme.

 Petitioner’s Arguments


  • The appellant submitted that it had opted for settlement under the Vivad Se Vishwas Scheme.
  • It filed a declaration under Sections 3 and 4(1) of the Act without prejudice to its rights on merits.
  • As per Section 4(3), withdrawal of pending appeals was mandatory for settlement of tax arrears.
  • The appellant had already received the certificate under Section 5(1) and sought permission to withdraw the appeal and submit compliance before the designated authority.

 Respondent’s Arguments


  • The Revenue did not oppose the application.
  • Counsel for the respondent expressly stated that there was no objection to allowing the application for withdrawal of the appeal.

 

Court’s Findings / Order

  • The Delhi High Court allowed the application filed under Section 151 CPC.
  • The appeal was taken up for hearing and permitted to be withdrawn.
  • The Court granted liberty to the appellant to avail benefits under the Vivad Se Vishwas Scheme.
  • Consequently, the appeal was disposed of as withdrawn.

 

Important Clarification

  • The Court did not adjudicate on the substantial question of law relating to Section 80-I(6).
  • The matter was disposed of purely on account of settlement under the Vivad Se Vishwas Scheme.
  • Withdrawal of appeals is a mandatory procedural requirement under the scheme for resolution of tax disputes.

 

Sections Involved

  • Section 80-I of the Income Tax Act, 1961
  • Section 80-I(6) of the Income Tax Act, 1961
  • Section 151 of the Code of Civil Procedure, 1908
  • Sections 3, 4(1), 4(3), 5(1), 5(2) of the Vivad Se Vishwas Act

 

Link to download the order -https://delhihighcourt.nic.in/app/case_number_pdf/2020:DHC:3718-DB/MMH23122020ITA15272010_200942.pdf 

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