2021 (4) TMI 531 - AT - Income Tax

Benefit of 'Vivad se Vishwas Scheme, 2020' - some assessee's have filed declaration in Form No. 1 along with undertaking waiving rights for any remedy in Form No. 2 to the designated Authority and has also received Form 3. In some cases, form no 1 and 2 has been filed and awaiting form no. 3 from the designated authority and in some cases, the assessee's have expressed their willingness to file form no. 1 and 2 and settle their dispute under the scheme - HELD THAT - Once the assessee's intend to file a declaration in Form No. 1 along with undertaking and expressed their willingness to settle pending disputes regarding direct taxes, then there is no point in keeping appeal filed by the assessee's. We, further noted that recently the Hon'ble Jurisdictional High Court of Madras has considered an identical application filed by an assessee in the case of M/s. Nannusamy Mohan (HUF) 2020 (11) TMI 484 - MADRAS HIGH COURT for availing the benefit of 'Vivad se Vishwas Scheme, 2020', where the Hon'ble High Court has dismissed the appeal filed by the petitioner as withdrawn, but allowed liberty to the assessee to restore the appeal in the event the designated authority for any reason reject application filed by the assessee under section 4 Some assessee's have already filed declaration in Form No. 1 along with Form No. 2 to the Designated Authority and received Form 3 and some assessee's had already filed Form No. 1 2 and awaiting form no. 3 from the designated authority and also the fact that remaining assessee's are willing to file Form No. 1 and 2 within the due date prescribed for this purpose, we dismiss the appeals filed by the assessee's as withdrawn. However, a liberty is given to the assessee's to restore the appeals, in the event of the Designated Authority, for any reason reject the application filed by the assessee under section 4 of the said Act. We, further make it clear that in a cases where the appeal is filed by the Revenue and the assessee's have for any reason opted out from the scheme or the applicants under the scheme misrepresents any facts which resulted in rejection of application filed under the scheme, then the provisions of section 4(6) of the Act, shall be applicable to all appeals and in such cases, all the proceedings and claims which were withdrawn under section 4 and all the consequences under the Income-tax Act against the declarant shall be deemed to have been revived. We, further make it clear that the assessee's should promptly inform the Assessing Officer about their decision to opt out of the scheme or rejection of application by the designated authority to the Assessing Officer, so as to enable to file miscellaneous application to restore the appeal.

Summary

Issues:
1. Condonation of delay in filing appeals by Revenue.
2. Utilization of Direct Taxes 'Vivad se Vishwas Scheme, 2020' by assessees.
3. Dismissal of appeals filed by assessees and Revenue under the scheme.

Detailed Analysis:
1. The Appellate Tribunal, ITAT Chennai, considered 13 appeals filed by both the assessee and Revenue against a common order of the Commissioner of Income Tax (Appeals). The appeals by Revenue were found to be barred by limitation, and a petition for condonation of delay was filed, which was accepted by the Tribunal after considering the reasons provided by Revenue for the delay. The appeals by Revenue were admitted for adjudication after condonation of delay.

2. During the hearing, it was noted that some assessees expressed their intention to utilize the Direct Taxes 'Vivad se Vishwas Scheme, 2020' to settle pending disputes related to Direct Taxes. The Scheme allowed assessees to settle tax disputes by filing necessary declarations and undertakings, paying specified taxes, and withdrawing appeals pending before appellate authorities. The Tribunal observed that once assessees intended to settle disputes under the scheme, there was no point in keeping their appeals pending.

3. Referring to a similar case before the High Court of Madras, where an assessee intended to avail the benefits of the 'Vivad se Vishwas Scheme, 2020,' the Tribunal decided to dismiss the appeals filed by both assessees and Revenue as withdrawn. However, assessees were given the liberty to restore the appeals if the Designated Authority rejected their applications under section 4 of the Act. It was clarified that if an assessee opted out of the scheme or misrepresented facts leading to rejection of the application, the provisions of the Act would be applicable, and all proceedings would be revived. Assessees were directed to inform the Assessing Officer promptly if they decided to opt out of the scheme or if their application was rejected, to enable the filing of a miscellaneous application to restore the appeal.

In conclusion, all appeals filed by the assessees and Revenue were dismissed as withdrawn, with the option for assessees to restore the appeals if necessary.