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Facts
The assessee filed an ITR for AY 2014-15, which was initially processed under Section 143(1) and later selected for limited scrutiny due to high cash deposits. A survey under Section 133A led to the conversion of limited scrutiny to complete scrutiny, and the AO assessed an additional income of Rs. 1 Crore. The Ld. CIT(A) dismissed the assessee's appeal, deeming it infructuous because the assessee, having opted for the Vivad Se Vishwas Scheme and received Form 3, failed to pay the determined tax or file Form 4, and also did not respond to notices.
Held
The Tribunal observed that the Ld. CIT(A) dismissed the appeal without adjudicating on its merits. Citing the interest of justice and fair play, the Tribunal remitted the entire issue back to the Ld. CIT(A)/NFAC for a fresh decision on merits. The Ld. CIT(A) is directed to grant a reasonable opportunity of hearing to the assessee, who must submit all necessary documents and information to substantiate her claims.
Key Issues
The key issues were: (1) whether the appeal became infructuous due to non-compliance with the Vivad Se Vishwas Scheme (non-payment after Form 3, non-filing of Form 4), (2) if the CIT(A) could dismiss the appeal for non-prosecution or without merits, and (3) the validity of converting scrutiny and assessment methods.
Sections Cited
250, 5(1) of DTVSV Act, 143(1), 143(2), 142(1), 133A, 143(3)
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Income Tax Appellate Tribunal, COCHINBENCH:COCHIN
Before: SHRI INTURI RAMA RAO & SHRI KESHAV DUBEY
Appellant by : Shri R. Krishnan, A.R. Respondent by : Shri Sanjit Kumar Das, D.R. Date of Hearing : 06.01.2025 Date of Pronouncement : 28.01.2025 O R D E R PERKESHAV DUBEY, JUDICIAL MEMBER: This appeal at the instance of the assessee is directed against the order of ld. CIT(A)/NFAC dated 12.5.2023vide DIN & Order No.ITBA/NFAC/S/250/2023-24/1052797573(1) for the Assessment Year (in short “AY”) 2014-15 passed u/s 250 of the Income Tax Act, 1961 (in short “The Act”).
The assessee has raised following grounds of appeal:
Brief facts of the case are that the assessee filed her return of income for the AY 2014-15 on 30.11.2014 declaring total income of Rs.10,43,500/-. The return was processed u/s 143(1) of the Act on 3.1.2015. Thereafter the case was selected for limited scrutiny under CASS for the reason “Cash deposits in savings bank account is more than the turnover”. Accordingly, notices u/s 143(2) of the Act as well as 142(1) of the Act were issued calling for specific details. Sheeja Vamadevan Sathi, Trivandrum Page 3 of 4 3.1. Further, a survey u/s 133A of the Act was conducted in the assessee’s business premises M/s. Hotel Varkala Park International on 25.2.2015. Since the case was already selected for limited scrutiny by CASS, approval was obtained from Principal CIT to convert it into a complete scrutiny as a survey was conducted in respect of assessment year 2014-15. On verification of the documents and after considering the submissions made by the assessee, the AO determined the additional income of the assessee amounting to Rs.1 Crore and added the same to the returned income and completed the assessment proceedings on a total assessed income of Rs.1,10,43,500/-. 3.2. Aggrieved by the assessment completed u/s 143(3) of the Act dated 31.12.2016, the assessee preferred an appeal before the ld. CIT(A)/NFAC. The ld. CIT(A) dismissed the appeal on the ground that as the assessee has opted for Vivad Se Vishwas Scheme, 2020 and already filed Form 1 & 2 and subsequently the certificate in Form 3 was also issued by the department but the assessee did not pay the tax amount as determined in Form 3 by filing Form No.4, the moot question is whether the appeal can be decided on merit? The ld. CIT(A)/NFAC held that upon issuing Form No.3 to the assessee by the designated authority, being the jurisdictional Principal CIT, the appeal is deemed withdrawn. Thus, as the appeal is stated as withdrawn, this appeal becomes infructuous and also the assessee has not responded to any of the notices sent to her and as there is no response to appeal notices, the appeal is liable to be dismissed. Thus, on the aspect of non-compliance and on the aspect of appeal being treated as withdrawn, the appeal becomes infructuous and accordingly dismissed. 3.3 Aggrieved by the order of ld. CIT(A)/NFAC, the assessee has filed the present appeal before this Tribunal.