S SATHYARAJ,CHENNAI vs. DCIT, NCC-10(1), CHENNAI

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ITA 3000/CHNY/2026Status: DisposedITAT Chennai28 July 2026AY 2017-185 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal noted the mistake in withdrawing the penalty appeal and the lack of immunity for penalty proceedings. The matter was remanded to the CIT(A) for adjudication on merits.

What were the facts?

The assessee settled a quantum appeal under the Direct Tax Vivad Se Vishwas Scheme, 2024, and mistakenly believed the penalty appeal was also withdrawn. The CIT(A) dismissed the penalty appeal as deemed withdrawn.

What were the issues?

Whether the penalty appeal was correctly dismissed as withdrawn, and if immunity from penalty proceedings was granted under the DTVSV Scheme.

Which sections of the Income-tax Act were involved?

Direct Tax Vivad Se Vishwas Scheme, 2024

AI-generated summary — verify with the full judgment below

Before: Shri Inturi Rama Rao & Shri S.S. Viswanethra Ravi

Hearing: 23.07.2026Pronounced: 28.07.2026

आयकर अपीलीय अिधकरण, ’सी’ �ायपीठ, चे�ई IN THE INCOME-TAX APPELLATE TRIBUNAL ‘C’ BENCH, CHENNAI �ी इंटूरी रामाराव, लेखा सद� एवं �ी एस.एस. िव�ने� रिव, �ाियक सद� के सम� । Before Shri Inturi Rama Rao, Accountant Member & Shri S.S. Viswanethra Ravi, Judicial Member आयकर अपील सं./I.T.A. No.2999 & 3000/Chny/2026 िनधा�रण वष�/Assessment Year: 2013-14 & 2017-18. Shri S. Sathyaraj, Vs. The DCIT, No.13A, Brahadambal Road, NCC-10(1), Nungambakkam, Chennai, Chennai. Tamil Nadu - 600 034. [PAN: AAFPS6100C]

(अपीलाथ�/Appellant) (��थ�/Respondent) अपीलाथ� की ओर से / Appellant by : Mr. Kishore Kumar. V, CA ��थ� की ओर से/Respondent by : Ms. Premi, Sr. AR सुनवाई की तारीख/ Date of hearing : 23.07.2026 घोषणा की तारीख /Date of Pronouncement 28.07.2026 : आदेश /O R D E R PER S.S. VISWANETHRA RAVI, JUDICIAL MEMBER: Both the appeals filed by the assessee are directed against separate orders dated 06.03.2026 and 11.05.2026, respectively, passed by the ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi, for the assessment years 2013-14 and 2017-18, respectively.

2.

Since the issues raised in both these appeals are similar and based on the same identical facts, with the consent of both the parties, we proceed to hear both the appeals together and pass a consolidated order for the sake of convenience.

2 I.T.A. No.2999 & 3000/Chny/2026

-:I.T.A. No.2999/Chny/2026:- (Assessment Year: 2013-14) 3. Ld. AR, Mr. Kishore Kumar V., C.A., submits that the ld. CIT(A) dismissed the appeal by observing, "the present appeal is deemed to be withdrawn with effect from 14.05.2025," under the impression that the assessee had requested the same. The ld. AR further submitted that the assessee settled the quantum appeal under the Direct Tax Vivad Se Vishwas Scheme, 2024 (DTVSV) by paying the determined tax and, in view of the same, the assessee was under the impression that the penalty appeal was also deemed to have been withdrawn along with the quantum appeal. The ld. AR filed an affidavit stating that the statement made before the ld. CIT(A) by mistake requires interference by this Tribunal by again remanding the matter to the file of the ld. CIT(A) for his fresh adjudication of the subjected penalty appeal.

4.

Ld. DR, Ms. Premi, Sr. AR, placed on record Guidance Note No. 2/2024 on the provisions of the DTVSV Scheme, 2024, dated 16.12.2024 and, by referring to point No. 52, she submits that the settlement for the quantum appeal is made as a percentage of the disputed tax, where disputed tax means income tax including surcharge and cess. She argued that the penalty leviable or levied is not included in the disputed tax for settlement of the quantum appeal. Further, she submits that on settlement of the quantum appeal, the Designated Authority will grant immunity from the penalty leviable or levied in respect of the tax arrears settled under the Scheme. She referred to the question therein and argued that no immunity from the penalty proceedings was granted by the Designated Authority and the penalty levied by the AO, which was confirmed by the ld. CIT(A), is justified.

3 I.T.A. No.2999 & 3000/Chny/2026

5.

Having heard both the parties, we note that, admittedly, the ld. CIT(A) proceeded to hold that the penalty appeal was deemed to have been withdrawn from the date on which Form No. 4 under the DTVSV Scheme, 2024 was issued in the quantum appeal. However, the ld. AR states that the application to withdraw the penalty appeal was made before the ld. CIT(A) by mistake. Further, admittedly, there was no application to grant immunity from initiating penalty proceedings and, accordingly, no immunity order was passed by the Designated Authority. Taking into view the facts and circumstances of the present case, we deem it proper to remand the matter to the file of the ld. CIT(A) to adjudicate the penalty appeal on merits and pass the order in accordance with law. Thus, the order of the ld. CIT(A) is set aside and the grounds raised by the assessee are allowed for statistical purposes.

6.

In the result, the appeal filed by the assessee is allowed for statistical purposes.

-:I.T.A. No.3000/Chny/2026:- (Assessment Year: 2017-18) 7. Ld. AR, Mr. Kishore Kumar V., C.A., submits that the ld. CIT(A) dismissed the appeal by observing, "the present appeal is deemed to be withdrawn with effect from 14.05.2025," under the impression that the assessee had requested the same. The ld. AR further submitted that the assessee settled the quantum appeal under the Direct Tax Vivad Se Vishwas Scheme, 2024 (DTVSV) by paying the determined tax and, in view of the same, the assessee was under the impression that the penalty appeal was also deemed to have been withdrawn along with the quantum appeal. The ld. AR filed an affidavit stating that the statement

4 I.T.A. No.2999 & 3000/Chny/2026

made before the ld. CIT(A) by mistake requires interference by this Tribunal by again remanding the matter to the file of the ld. CIT(A) for his fresh adjudication of the subjected penalty appeal.

8.

Ld. DR, Ms. Premi, Sr. AR, placed on record Guidance Note No. 2/2024 on the provisions of the DTVSV Scheme, 2024, dated 16.12.2024 and, by referring to point No. 52, she submits that the settlement for the quantum appeal is made as a percentage of the disputed tax, where disputed tax means income tax including surcharge and cess. She argued that the penalty leviable or levied is not included in the disputed tax for settlement of the quantum appeal. Further, she submits that on settlement of the quantum appeal, the Designated Authority will grant immunity from the penalty leviable or levied in respect of the tax arrears settled under the Scheme. She referred to the question therein and argued that no immunity from the penalty proceedings was granted by the Designated Authority and the penalty levied by the AO, which was confirmed by the ld. CIT(A), is justified.

9.

Having heard both the parties, we note that, admittedly, the ld. CIT(A) proceeded to hold that the penalty appeal was deemed to have been withdrawn from the date on which Form No. 4 under the DTVSV Scheme, 2024 was issued in the quantum appeal. However, the ld. AR states that the application to withdraw the penalty appeal was made before the ld. CIT(A) by mistake. Further, admittedly, there was no application to grant immunity from initiating penalty proceedings and, accordingly, no immunity order was passed by the Designated Authority. Taking into view the facts and circumstances of the present case, we deem it proper to remand the matter to the file of the ld. CIT(A) to

5 I.T.A. No.2999 & 3000/Chny/2026

adjudicate the penalty appeal on merits and pass the order in accordance with law. Thus, the order of the ld. CIT(A) is set aside and the grounds raised by the assessee are allowed for statistical purposes. 10. In the result, the appeal filed by the assessee is allowed for statistical purposes.

Order pronounced on 28th July, 2026 at Chennai.

Sd/- Sd/- (INTURI RAMA RAO) (S.S. VISWANETHRA RAVI) ACCOUNTANT MEMBER JUDICIAL MEMBER Chennai, Dated, 28.07.2026 MM/- आदेश की �ितिलिप अ�ेिषत/Copy to: 1. अपीलाथ�/Appellant, 2.��थ�/ Respondent, 3. आयकर आयु�/CIT, Chennai/Madurai/Coimbatore/Salem 4. िवभागीय �ितिनिध/DR & 5. गाड� फाईल/GF.

Digitally signed MANISH by MANISH MISHRA MISHRA Date: 2026.07.30 11:21:16 +05'30'

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