ITAT dismisses Appeal as Taxpayer Opts for Settlement under Vivad Se Vishwas Scheme with Liberty to Restore [Read Order]

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) dismissed an appeal after the assessee opted to settle the pending dispute under the Vivad Se Vishwas Scheme (VSVS), 2024. The Tribunal, while dismissing the appeal as withdrawn, granted liberty to the assessee to seek restoration in case the scheme application does not attain finality.

The matter pertains to the Assessment Year 2017–18 and arose from an assessment order issued under Section 143(3) of the Income Tax Act, 1961. The assessee, Flovel Energy Pvt. Ltd, had approached the Tribunal challenging the assessment framed by the Assessing Officer, which was later upheld by the National Faceless Appeal Centre (NFAC).

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When the matter was taken up for hearing, the counsel for the assessee submitted a letter dated 12th February 2025, informing the Tribunal of the assessee’s decision to avail the benefit of the Vivad Se Vishwas Scheme, 2024. It was further submitted that a declaration under Form No. 1 had already been filed on 11th December 2024, by the prescribed procedure under the scheme.

The Tribunal observed that the assessee had expressed its intention to settle the dispute through the direct tax dispute resolution scheme introduced by the government; accordingly, the appeal fell within the scheme's purview.

The tribunal acknowledged the move towards dispute resolution through statutory mechanisms, such as the VSVS. The Bench stated that since the assessee had already filed the requisite declaration, the appeal could be dismissed as withdrawn. However, the Tribunal also granted a crucial safeguard to the assessee by permitting restoration of the appeal if the declaration made under the scheme does not attain finality.

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The tribunal observed that the assessee had opted settling the dispute arising out of this appeal by availing VSVS Scheme, 2024, the appeal filed by the assessee is hereby treated as withdrawn with liberty to be given to the assessee to get this appeal restored on an application made by it in the event of the declaration made under VSVS Scheme, 2024 not attaining finality for any reason.

The Tribunal, comprising M. Balaganesh, Accountant Member, and Ms. Madhumita Roy, Judicial Member, further directed that such restoration, if needed, would be entertained only upon a formal application by the assessee. This approach aligns with the principles of natural justice, ensuring that the taxpayer's rights remain protected despite procedural withdrawal. As a result, the appeal was dismissed as withdrawn.

To Read the full text of the Order CLICK HERE

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