DILIP DINESH PATEL (HUF),MUMBAI vs. INCOME TAX OFFICER WARD 1(1), THANE

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ITA 1368/MUM/2025Status: DisposedITAT Mumbai23 April 2025AY 2011-124 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the CIT(A) had not taken cognizance of the fact that the tax liability for AY 2011-12 was not finally settled under the VSVS-2020 due to the assessee's failure to make the tax payment. The assessee's representative fairly accepted that the admitted tax liability was not paid, and therefore, requested the appeal to be restored to the CIT(A) for adjudication on merit. The Tribunal agreed with this submission and restored the matter to the file of the CIT(A) to adjudicate the various grounds of appeal raised by the assessee on merit. The CIT(A) was directed to provide a reasonable opportunity to the assessee before passing an order. The assessee was also advised to be vigilant and make timely compliance. The grounds raised by the assessee were allowed for statistical purposes. The specific issues regarding additions of ₹16,54,659 and ₹37,346, and the procedural grounds related to cross-examination were not decided on merits by the ITAT, as the matter was remanded.

What were the facts?

The assessee, Dilip Dinesh Patel (HUF), filed an appeal before the Income Tax Appellate Tribunal (ITAT) challenging an order dated 31.12.2024 passed by the Commissioner of Income-tax (Appeals) [CIT(A)] for Assessment Year 2011-12. The appeal was dismissed by the CIT(A) on the ground that the assessee had opted for the Direct Tax Vivad se Vishwas Scheme, 2020 (VSVS-2020) and a Form-3 was issued. However, the assessee contended that the appeal should not have been dismissed as they failed to pay the required amount under the scheme, rendering the declaration infructuous. The assessee argued that the CIT(A) should have decided the appeal on merits. The revenue did not object to restoring the matter to the CIT(A).

What were the issues?

1. Whether the CIT(A) erred in dismissing the appeal on the ground that the appellant had opted for the VSVS Scheme, 2020, and Form-3 was issued, without considering that the appellant had not paid the required amount under the scheme, thus the declaration was not made as per Section 4(6) of the DTVSV Act, 2020? (Question of law and fact) 2. Whether the CIT(A) ought to have decided the issues raised in the grounds of appeal on merits instead of dismissing the appeal? (Question of law and fact) Assessee's Contentions: - The assessee argued that opting for the VSVS-2020 and issuance of Form-3 did not settle the dispute as the required tax liability was not paid in time, making the application infructuous as per Sections 4 and 5 of the VSVS-2020. Therefore, the CIT(A) should have decided the appeal on merits. - The assessee also raised grounds concerning the deletion of additions of ₹16,54,659 under the head 'income from other sources' and ₹37,346 as commission, and quashing the assessment due to lack of opportunity for cross-examination and non-provision of evidence. Revenue's Contentions: - The revenue submitted that the assessee might not have provided information to the CIT(A) regarding the failure of the VSVS-2020 application due to non-payment. The revenue had no objection if the matter was restored back to the CIT(A) for adjudication on merits.

Which sections of the Income-tax Act were involved?

Section 254(1),Section 250,Section 4,Section 5,Section 4(6),Section 10(38)

AI-generated summary — verify with the full judgment below

2011–12) (Physical hearing) Dilip Dinesh Patel (HUF) Income Tax Officer 402, Neelkanth Pooja, Vs. Ward-1(1), M.G. Road, Hindu Colony, Qureshi Mansion, Naupada, Gokhale Road, Thane (W)-400602. Thane-400602. PAN/GIR No. AAAHD0978G (Appellant) .. (Respondent) Assessee by Ms. Dhwani Shah CA Revenue by Shri. Vijay Kr. G. Subramanyam, Sr. DR Date of institution of appeal 27.02.2025 Date of Hearing 23/04/2025 Date of Pronouncement 23/04/2025 Order Under Section 254(1) of Income Tax Act PER PAWAN SINGH ,JUDICIAL MEMBER; 1. This appeal by assesses is preferred against the order dated 31.12.2024 passed in Appeal no. CIT(A), Thane-1/10794/2018-19 by the Ld. Commissioner of Income–tax(Appeals)/ National Faceless Appeal Centre (NFAC) [hereinafter referred to as the “CIT(A)”] under section 250 of the Income-Tax Act, 1961 [hereinafter referred to as "Act"] for the Assessment year [A.Y.] 2011-12. The assessee has taken the following grounds: “

1 On the facts and circumstances of the case and in law, the JCIT (A) has erred in dismissing the appeal on the ground that the appellant had opted for DTVSV Scheme, 2020 and Form-3 was also issued by the Designated Authority without appreciating the fact that the appellant had not made paid the amount which he was required to pay under that Scheme and, therefore, it was required to be presumed that the declaration was never been made by the appellant as per the provisions of Section 4. (6) of the DTVSV Act, 2020.

Dilip Dinesh Patel (HUF) 2 On the facts and circumstances of the case and in law, the JCIT (A) ought to have decided the issues raised vide Grounds of Appeal filed along with Form No. 35 on merits instead of dismissing the appeal.

3. On the facts and circumstances of the case and in law, the JCIT (A) ought to have deleted the addition of ₹ 16,54,659 which was assessed as income under the head income from other sources and ought to have granted the exemption with respect to that amount as claimed by the appellant under Section 10(38).

4. On the facts and circumstances of the case and in law, the JCIT (A) ought to have deleted the addition of ₹ 37,346 as made by the Assessing Officer by alleging that the appellant had paid the commission @2% of the transaction amount in respect of which the exemption was claimed under Section 10(38).

5.

On the facts and circumstances of the case and in law, the JCIT (A) ought to have quashed the assessment made by the Assessing Officer by relying upon the statements and other evidences without providing the copies thereof to the appellant and without providing the opportunity of cross examination to the appellant. The Appellant craves leave to add, alter, amend, vary and/ or withdraw any or all the above grounds of appeal

.”

2. The rival submissions of both the parties have been heard and record perused. At the outset of hearing, the learned authorized representative (Ld. AR) of the assessee submits that during the pendency of appeal before Ld. CIT(A), the assessee applied for availing benefit under direct tax Vivad se Vishwas 2020 (VSVS-20). On making application under VSVS-2020, Form no. 3 was issued to the assessee determining tax liability. However, the assessee could not deposit tax liability in time. Thus, as per Section 4 and 5 of VSVS-20, the application of assessee has become infructuous. The assessee made such submission in his in his submission uploaded on ITBA portal on 05.12.2024. However, the Ld. CIT(A) has not taken cognizance of such submission and dismissed the appeal by taking view that assessee has settled the dispute and the appeal has become Dilip Dinesh Patel (HUF) infructuous. In fact the application filed by assessee for seeking beneficial VSVS- 2020 was failed due to non-payment of tax liability in time. Thus, the Ld. CIT(A) was required to decide appeal on merit. The Ld. CIT(A) wrongly dismissed the appeal without taking cognizance of other submissions of assessee. The ld. AR of the assessee prayed that matter may be restored back to the eyes of Ld. CIT(A) for adjudication of appeal on merit as per manadate of section 250(6).

3. On the other hand, the Ld. DR for the revenue submits that perhaps the assessee has not provided information to the office of ld CIT(A) that application filed for availing benefit under VSVS-2020 has failed due to non-payment of tax liability. Therefore, he has no objection if the matter is restored back to the file of CIT(A) for adjudication of appeal on merit.

4.

I have considered the submission for the parties and perused the orders of lower authority carefully. It is an admitted fact that initially during the pendency of Ld. CIT(A), the assessee tried to avail benefit of VSVS 2020. However, the assessee could not pay the tax liability determined by designated authority. The Ld. CIT(A) on the basis of information in his record and by taking cognizance of fact that assessee applied for VSVS-2020 and treated the appeal as infructuous. Now, before me the Ld. AR of the assessee fairly accepted that admitted tax liability was not paid by assessee, thus, her appeal may be restored back to the file of Ld. CIT(A) for adjudication on merit. Considering the fact that Ld. CIT(A) has not taken into cognizance of the facts that tax liability qua A.Y. 2011-12 has not been settled finally in VSVS-2020 due to failure in the part of assessee in making tax liability. Therefore, the matter is restored back to the file of Ld. CIT(A) to adjudicate the various ground of appeal raised by the assessee on Dilip Dinesh Patel (HUF) merit. Needless to direct that before passing the order, Ld. CIT(A) shall allow reasonable opportunity to the assessee. The assessee is also directed to be vigilant in future and to make timely compliance and to bring all the facts in the notice of Ld. CIT(A). In the result, the grounds raised

by the assessee are allowed for statistical purpose.

5. In the result, appeal of the assessee is allowed for statistical purpose. Order pronounced in open court on 23.04.2025 at the time of hearing.

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