Re: Quantum of Disputed Tax – Revenue’s Appeal on Disputed Issue dismissed by the ITAT

In the facts of the given case, on the disputed issue (viz. Disallowance of Employees Contribution to PF & ESIC) in an earlier year viz.A.Y.2010-11, the Appeal of the assessee was allowed by the CIT(Appeals). Against the same, the Department went into appeal before the ITAT. The ITAT dismissed the appeal of the Department on the ground of low tax effect viz. monetary limits. In subsequent year viz. A.Y.2012-13, disallowance on the same issue was made by the A.O. The assessee has preferred an appeal before the CIT(Appeals) which was pending on the ‘specified date’. Now, the assessee wants to opt for the DTVSV Scheme. What would be the quantum of ‘disputed tax’ – 100% or 50% since, considering the fact that Appeal of the Department on ‘disputed issue’ was dismissed by ITAT (in view of 2nd Proviso to Section 3 of DTVSV Act)??

The proviso reads as under “ Provided further that in a case where an appeal is filed before the Commissioner (Appeals) or objections is filed before the Dispute Resolution Panel by the appellant on any issue on which he has already got a decision in his favour from the Income Tax Appellate Tribunal (where the decision on such issue is not reversed by the High Court or the Supreme Court) or the High Court (where the decision on such issue is not reversed by the Supreme Court), the amount payable shall be one-half of the amount in the Table above calculated on such issue, in such manner as may be prescribed”

 

By reading the proviso   it is clear that  the dismissal of appeal by the Appellate Tribunal  will also amount to  order of the Appellate Tribunal  hence the assesee  is eligible for  concessional rate of 50% of  disputed tax .

 

From what we understand, the issue seems to be prima facie good on merits and there doesn’t seem to be a need to avail VSVA.

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