On making valid declaration under Direct Tax Resolution Scheme 2016, appeal in respect of the disputed income pending before CIT(A) shall be deemed to have been withdrawn.
ABCAUS Case Law Citation:
ABCAUS 2061 (2017) (09) ITAT
The Issue:
The issue raised was against the dismissal of the appeal by the CIT(A) when the assessee had availed the benefit of the provisions of Finance Act, 2016 relating to Direct Tax Dispute Resolution Scheme 2016.
Assessment Year : 2009-10
Brief Facts of the Case:
The assessment was completed at total income of Rs.16.56 lac against the declared income of Rs.1.56 lakhs. The assessee availed the benefit of the provisions of Finance Act, 2016 related to ‘the Direct Tax Dispute Resolution Scheme 2016’ and prayed before the CIT(A) that the pending appeal be treated as withdrawn.
The CIT(A) did not permit so, as, in his opinion, there was no power with him to permit the withdrawal. The appeal was dismissed and in the last para of the order, the CIT(A) observed that considering the peculiar position of law and the undue and unfair prejudice inflicted upon the appellant, the office was directed to forward a copy of this statutory order to the office of the Member (L&C), CBDT for his necessary consideration.
Aggrieved, the assessee was before the tribunal.
Observations made by the Tribunal:
The ITAT observed that the Explanatory Memorandum to the Budget 2016. Appendix 3 is the Direct Tax Dispute Resolution Scheme, 2016. Clause 203 of this Scheme reads as under:-
“(1) A declaration under section 202 shall be made to the designated authority in such form and verified in such manner as may be prescribed.
(2) Where the declaration is in respect of tax arrear, consequent to such declaration, appeal in respect of the disputed income, disputed wealth and tax arrear pending before the Commissioner of Income-tax (Appeals) or the Commissioner of Wealth-tax (Appeals), as the case may be, shall be deemed to have been withdrawn.”
It was noted that clearly, as per Clause 203 where a valid declaration is made, the appeal in respect of the disputed income pending before the CIT(A) shall be deemed to have been withdrawn. The CIT(A) had not disputed that the assessee had complied with all the necessary conditions for availing the benefit flowing from the Direct Tax Resolution Scheme 2016.
The ITAT opined that in view of the assessee’s availing the benefit of the Direct Tax Dispute Resolution Scheme, 2016, the CIT(A) should have suo motu treated the appeal as withdrawn instead of dismissing it.
Held:
The appeal pending with the CIT(A) at the time of availing the benefit of the Direct Tax Dispute Resolution Scheme 2016, be dismissed as withdrawn.
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