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Facts
The assessee filed an appeal against the CIT(A)'s order enhancing the assessment. The assessee had opted for the Vivad-se-Vishwas Scheme (VSVS) before the CIT(A)'s order was passed, and Form-2 was issued subsequently. However, the CIT(A) dismissed the appeal and enhanced the assessment.
Held
The Tribunal noted that the assessee had opted for the VSVS scheme and sought an adjournment. Since the settlement under VSVS should have been considered before the impugned order, the Tribunal set aside the CIT(A)'s order.
Key Issues
Whether the CIT(A) erred in enhancing the assessment without considering the assessee's opting for the Vivad-se-Vishwas Scheme?
Sections Cited
143(3), 147, 148
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Income Tax Appellate Tribunal, Hyderabad ‘ DB-A ‘ Bench, Hyderabad
Before: Shri Vijay Pal Rao, Vice-Shri Manjunatha, G.
Per Vijay Pal Rao, Vice President
This appeal by the assessee is directed against the order dated 21/03/2025 of the learned CIT/ADDL/JCIT(A)-4, Kolkata, for the A.Y.2017-18.
The assessee has raised the following grounds of appeal:
None appeared on behalf of the assessee when this appeal was called for hearing, despite the notices were issued to the assessee and also the defect notice sent to the assessee for removing the defect in filing the appeal. Accordingly, the Bench proposes to hear and dispose of the appeal, ex-parte.
We have heard the learned DR and carefully perused the orders of the authorities below. The assessee has sent a letter dated 04/07/2025 whereby it is submitted that in order to seek immunity from penalty and prosecution, the assessee has opted for direct Vivad-se-Vishwas Scheme (VSVS) 2024. The designated authority also issued Form-2 on 19th March, 2025. In the meantime, the assessee requested the learned CIT (A) to adjourn the hearing for a period of 15 days as the assessee has already opted for VSVS Scheme. However, the learned CIT (A) has dismissed the appeal of the assessee and also enhanced the assessment while passing the impugned order vide order dated 21/03/2025. Thus, the assessee has submitted that the dispute
Page 2 of 4 regarding the additions made by the Assessing Officer have been settled under VSVS Scheme, and the present appeal is confined only on the issue of enhancement of assessment made by the learned CIT (A).
On the other hand, the learned DR has submitted that the issue of disallowance of belated payment of Employees’ Contribution towards PF and ESI is now covered by the judgment of the Hon'ble Supreme Court in the case of Checkmate Services (P) Ltd vs. CIT reported in [2022] 143 taxmann.com 178 (SC). He has relied upon the impugned order of the learned CIT (A).
Having considered the submissions of the parties and the impugned order passed by the learned CIT (A), it is noted that before the impugned order was passed by the learned CIT (A) on 21/03/2025, the assessee already opted for VSVS Scheme 2024 by filing Form No.1 on 31/01/2025. In response to the notice on enhancement issued by the learned CIT (A) dated 21/02/2025, the assessee explained this fact of opting for Direct VSV Scheme, 2025 and sought adjournment of 15 days, as Form-2 was yet to be issued by the designated authority. Even before this order was passed, Form-2 was issued by the designated authority on 19/03/2025 and therefore, the learned CIT (A) ought to have considered this development of settlement of dispute under Direct VSVS 2024 before passing the impugned order. Accordingly, in the facts and circumstances of the case, we set aside the impugned order of the learned CIT (A) and remand the matter to the record of the learned CIT (A) for readjudication of the matter
Page 3 of 4 after considering the fact of settlement of dispute by the assessee under the Direct VSV Scheme, 2024 as well as the submissions of the ass on the issue of enhancement of assessment.
In the result, appeal filed by the assessee is allowed for statistical purposes.