Appeal Prior to Declaration under DTVSVS Act, Shall Revive On Failure to Settle Tax Dues: ITAT [Read Order]

The Income Tax Appellate Tribunal (ITAT) Chennai Bench recently in an application filed   before it held that the Appeal prior to declaration under Direct Tax Vivad Se Vishwas Act shall revive on failure to settle income tax dues.

The aforesaid observation was made by the Chennai ITAT, The  Revenue challenging the maintainability of appeal filed by the assessee company Lifecell International Private Limited in ITA in light of declaration filed by the assessee under  Direct Tax VivadSe Vishwas Act, 2020(DTVSVS).

The conention of the DR as submitted by Shri. Clement Ramesh Kumar , DR was that “referring to provisions of sub-section (2) of section 4 of the DTVSVS Act, 2020 submitted that upon filing a declaration, any appeal before the Income Tax Appellate Tribunal or CIT(A),  in respect of the disputed income shall be deemed to have been withdrawn from the date on which certificate under sub-section (1) of section 5 of the DTVSVS Act, 2020 is issued by the designated authority”

DR further  contended that “sub-section (7) of section 4 of the DTVSVS Act, 2020 submitted that no appellate forum or arbitrator, conciliator or mediator shall proceed to decide any issue relating to the tax arrears mentioned in the declaration in respect of which an order has been made under sub-section (1) of section 5 of the DTVSVS Act, 2020 by the designated authority or the payment of sum determined under that section and thus, Hon’ble tribunal cannot proceed to decide the appeal filed by the assessee”.

Counsel for the assessee Shri. Ajit Kumar Choradia,  contended that, “assessee has filed declaration u/s. 4(1) of the DTVSVS Act, 2020 and designated authority had issued Form no. 3 u/s. 5(1) of the DTVSVS Act, 2020, but due to difference in taxes payable by the assessee on account of non-consideration of certain issues by the designated authority, the assessee is decided to opt out of the VSVS Scheme, and thus, the moment declarant violates any of the conditions, it is presumed that the declaration filed under section 4(1) of the DTVSVS Act, 2020 shall be presumed never to have been made and thus, there is no merit in petition filed by the Revenue on maintainability of appeal filed by the assessee”.

After considering the contetion  of the both side the division bench of  Tribunal compraising Sri. V. Durga Rao (Judicial Member) and Shri G. Manjunatha, (Accountant Member) Rejected application filed by the Revenue on maintainability of appeal filed by the assessee and held that , “as per section 4(6) of DTVSVS Act, 2020, the law is very clear, in as much as in case the declarant violates any of the conditions, then all the proceedings and claims which were withdrawn u/s. 4 and all the consequences under the Income-tax Act, 1961 against declarant shall be deemed to have been revived. In the present case, the declarant has violated the conditions of payment of tax as determined by the designated authority in Form no. 3. Therefore, appeal filed by the assessee is deemed to have been revived”

To Read the full text of the Order CLICK HERE

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