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Facts
The assessee's case was reopened u/s 147, and an ex-parte assessment was completed u/s 144 for AY 2011-12, making additions of Rs. 7,54,409/-. The CIT(A) dismissed the assessee's appeal against these quantum additions, mistakenly believing the assessee had opted for the Vivad Se Vishwas (VSVS) Scheme for this assessment. In reality, the VSVS declaration was for a separate penalty of Rs. 2,500/- imposed u/s 271(1)(b) for the same year.
Held
The Tribunal found that the CIT(A) dismissed the appeal based on a factual error, misconstruing the VSVS declaration for a penalty as applicable to the quantum additions. Both parties agreed that the matter required reconsideration. Consequently, the CIT(A)'s order was set aside, and the case was remanded for a de novo adjudication, ensuring the assessee is given a proper opportunity of being heard.
Key Issues
Whether the CIT(A) erred in dismissing the appeal against quantum additions by incorrectly applying the VSVS scheme declaration meant for a penalty order, instead of deciding the appeal on merits.
Sections Cited
Section 250 of Income Tax Act, 1961, Section 147 of Income Tax Act, 1961, Section 144 of Income Tax Act, 1961, Section 148 of Income Tax Act, 1961, Section 154 of Income Tax Act, 1961, Section 271(1)(b) of Income Tax Act, 1961, Sub section 2 of Section 4 of Direct Tax Vivad Se Vishwas Act, 2020
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Income Tax Appellate Tribunal, RAIPUR BENCH, RAIPUR
Before: SHRI PARTHA SARATHI CHAUDHURY, JM & SHRI ARUN KHODPIA, AM
Srinivas Rachiraju, v Income Tax Officer, Ward-2(2), Flat No. C-406, 4th Floor, Megapolis, s Aaykar Bhawan, Civic Centre, RGIP Phase III, Maan, Infotech Park, Bhilai- 490006, C.G. Hinjawadi, Dist. Pune-411057, Maharashtra PAN: AIFPR8144R (अपीलाथ"/Appellant) . (""थ" / Respondent) . िनधा"रती की ओर से / Assessee by : Shri S. R. Rao, Adv. राज" की ओर से / Revenue by : Dr. Priyanka Patel, Sr. DR सुनवाई की तारीख / Date of Hearing : 24.06.2025 : 30.06.2025 घोषणा की तारीख / Date of Pronouncement आदेश / O R D E R Per Arun Khodpia, AM:
The captioned appeal preferred by the assessee is directed against the order of the Commissioner of Income Tax (Appeal), NFAC, Delhi, [in short “Ld. CIT(A)”], passed under section 250 of the Income Tax Act, 1961 (in short “the Act”), dated 01.04.2021, for the Assessment Year 2011-12, which in turn arises from the assessment order u/s 147 r.w.s. 144 of the Act, dated 05.12.2018, passed by Income Tax Officer-2(2), Bhilai (in short “Ld. AR”).
2 ITA 361/RPR/2025 Srinivas Rachiraju vs. ITO, Ward-2(2), Bhilai 2. The grounds of appeal raised by the assessee assailing the impugned order are extracted as below: 1. ln the facts and circumstances of the case and in law, the Ld. Commissioner of Income-tax (Appeals), NFAC has erred in dismissing rectification application u/s 154 of the Income-tax Act, 1961 for restoration of appeal, which was wrongly dismissed holding that appellant has opted for Vivad Se Vishwas Scheme Act, 2020 against assessment order, while Declaration filed under VSVS Act was with respect to Penalty order and not against assessment order.
2. In the facts and circumstances of the case and in law, the ld. Commissioner of Income-tax (Appeals), NFAC ought to have decided the appeal against assessment on merits by rectifying his order dismissing the appeal wrongly assuming that Appellant filed declaration under VSVS Act.
3. The impugned order is bad in law and on facts.
4. The appellant reserves the right to add, alter, omit all or any of the grounds of appeal with the permission of the Hon'ble appellate authority.
Brief facts of the case are that the assessee’s case was reopened u/s 147 of the Act and a notice u/s 148 was issued on 09.03.2018 requiring the assessee to furnish his Return of Income within 30 days, however, Return of Income was not filed within the stipulated time. Accordingly, another opportunity was granted by issuance of notice dated 11.08.2018, which was delivered to the assessee through email but the assessee again failed to comply with the said notices. Further, certain more opportunities were provided to the assessee, but he remains silent during the entire assessment proceedings. Ld. AO, therefore, have decided to complete the assessment 3 ITA 361/RPR/2025 Srinivas Rachiraju vs. ITO, Ward-2(2), Bhilai under the provisions of section 144 of the Act and, thereby have made certain additions / disallowance as under: (i) Salary income of the assessee as per 26AS- Rs.2,50,000/- (ii) Payment towards credit cards bills- Rs. 5,04,409/- In terms of the aforesaid additions, the assessed income of the assessee determined at Rs. 7,54,409/-.
Aggrieved with the aforesaid additions, assessee preferred an appeal before the Ld. CIT(A), wherein the appeal of assessee has been dismissed, stating that the assessee had opted for VSVS, 2020. The observations of Ld. CIT(A) while deciding the aforesaid appeal are extracted as under:
It is noted that the appellant opted for the Vivad Se Vishwas Scheme, 2020, vide application dated 22.12.2020. Pursuant thereto, the PCIT, Raipur-1 has clarified that the full and final payment of Rs.2,500/- as taxes in term of Form No. 5 dated 04.03.2021 (Certificate No. 933291130291220 dated 29.12.2020) has been made by the appellant. In view of the above, the appeal is treated as infructuous as per Sub section 2 of Section 4 of the Direct Tax Vivad Se Vishwas Act, 2020.
3. Accordingly, the appeal is treated as dismissed for statistical purposes.
Dissatisfied with the aforesaid decision of Ld. CIT(A), assessee preferred an appeal before us, which is under consideration in the present matter.
4 ITA 361/RPR/2025 Srinivas Rachiraju vs. ITO, Ward-2(2), Bhilai 6. At the outset, it is submitted by the Ld. AR before us that the assessee in the present case had not opted for VSVS, 2020. However, for the same assessment year a penalty was imposed upon the assessee u/s 271(1)(b) of the Act for Rs. 2500/-, which was settled by opting for VSVS, 2020, accordingly, a separate appeal filed by the assessee against penalty order was dismissed by the Ld. CIT(A), copy of said order is placed before us, which is extracted hereunder for the sake of complete of facts:
5 ITA 361/RPR/2025 Srinivas Rachiraju vs. ITO, Ward-2(2), Bhilai
It is further clarified by the Ld. AR that the assessee’s opting for VSVS, 2020 to settle the penalty imposed has been misconstrued under wrong impression by the Ld CIT(A), that the appellant had also opted for VSVS, 2020 to settle the quantum additions, accordingly, the appeal for quantum additions was also dismissed. However, the assessee had never opted for VSVS, 2020 towards pending appeal qua the quantum additions. It was the submission that the appeal of the assessee has been dismissed under factual misunderstanding. To substantiate this fact, Ld. AR drew our attention to observations of Ld CIT(A) in both the appeals (extracted supra) that the same certificate No. 933291130291220 dated 29.12.2020 for Rs. 2,500/- mentioned in the penalty appeal by the Ld. CIT(A) is noted in the quantum appeal also. On perusal of Ld. CIT(A)’s impugned order, this fact is clearly emerging that the same certificate no. and amount has been cited while dismissing the appeal against the quantum addition, whereas the amount of quantum addition was Rs. 7,54,409/- and no certificate was issued under VSVS, 2020. 6 ITA 361/RPR/2025 Srinivas Rachiraju vs. ITO, Ward-2(2), Bhilai Such facts shows that the assessee’s application for VSVS, 2020 for penalty addition are misconstrued by the Ld. CIT(A) and the information has been repeated in the quantum appeal also, consequently, the appeal is dismissed under mistaken belief about the facts.
Considering the aforesaid facts and circumstances of the present case, it can be safely construed that the appeal of the assessee has been dismissed by Ld. CIT(A), based on misreading of facts, therefore, it would be appropriate to restore this matter back to the file for Ld. CIT(A) for reconsideration, to which both the parties herein had fairly agreed to.
Accordingly, the impugned order of Ld. CIT(A) dated 01.04.2021 passed against the order u/s 147 r.w.s. 144 dated 05.12.2018 is set aside, with directions to revisit the matter and adjudicate denovo.
Needless to say, the assessee shall be afforded with reasonable opportunity of being heard in the set aside appellate proceedings, wherein the assessee shall cooperate and assist proactively, failing which the Ld. CIT (A) would be at liberty to decide the case in accordance with the mandate of law.
In result, appeal of the assessee is allowed for statistical purposes, in terms of over aforesaid observations.