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Facts
The assessee appealed against a CIT(A) order confirming a penalty of Rs. 1,09,122 levied under Section 270A. The assessee had filed an application under the Vivad Se Vishwas Scheme (VSVS) before the CIT(A) disposed of the appeal, and this VSVS application was subsequently accepted by the Income Tax Department.
Held
The Tribunal noted that the CIT(A) confirmed the penalty, ensuring the demand subsisted and the VSVS application remained valid as per CBDT Circular No.19 of 2024. Since the demand was settled under the VSVS scheme, the Tribunal found no reason to interfere with the CIT(A)'s order.
Key Issues
Whether the CIT(A)'s order confirming a penalty should be upheld when the underlying demand was subsequently settled under the Vivad Se Vishwas Scheme, in light of relevant CBDT clarifications.
Sections Cited
270A, Vivad Se Vishwas Scheme
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The assessee has filed this appeal challenging the order passed by the Ld CIT(A), NFAC, Delhi confirming the penalty of Rs.1,09,122/- levied by the AO u/s 270A of the Income Tax Act, 1961 („the Act‟).
The Ld A.R submitted that the assessee had filed application to settle the dispute u/s Vivad Se Vishwas Scheme, 2024 on 10-10-2024. However, the Ld CIT(A) disposed of the appeal on 15-10-2024, i.e., subsequent to the filing of VSV application by the assessee. She further submitted that the application filed by the assessee to settle the dispute under VSV scheme has since been accepted by the Income tax department. She submitted that the Circular No.19 of 2024 dated 16th December, 2024 issued by the CBDT (as per Issue No.37) has clarified that the cases where the Ld CIT(A) has disposed of the appeal after filing of Form No.1 under VSV application is eligible for settlement. Accordingly, the Ld A.R submitted that the order passed by Ld CIT(A) may be modified accordingly.
We heard Ld D.R and perused the record. In this case, the Ld CIT(A) has confirmed the penalty levied by the AO u/s 270A of the Act, after the filing of VSV application. Since the Ld CIT(A) has confirmed the penalty, the demand shall subsist and hence the VSV application filed by the assessee shall not become infructuous. Anyway, such kind of VSV application has been held to be valid by CBDT. Since the Ld CIT(A) has confirmed the penalty, the demand would survive and the said demand has now been settled by the assessee under VSV Scheme. Had the Ld CIT(A) deleted the penalty, there would not have been any occasion to file VSV application, if the revenue has accepted his order. In this view of the matter, we are of the view that the order passed by the Ld CIT(A) need not be interfered with.
Accordingly, we dismiss the appeal of the assessee. Order pronounced in the open court on 30-01-2025 Sd/- Sd/- [SANDEEP SINGH KARHAIL] [B.R. BASKARAN] JUDICIAL MEMBER ACCOUNTANT MEMBER Mumbai, Dated: 30-01-2025 TNMM Copy to : 1) The Appellant 2) The Respondent 3) The CIT concerned 4) The D.R, ITAT, Mumbai 5) Guard file By Order
Dy./Asst. Registrar I.T.A.T, Mumbai