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Facts
The assessee had filed appeals against an assessment order and a penalty order. While the appeals were pending, the assessee opted for the Vivad Se Vishwas Scheme for the penalty appeal. However, due to a mistake, the CIT(A) dismissed the appeal against the assessment order as withdrawn. Subsequently, the CIT(A) rectified the mistake to an extent but refused to revive the closed appeal against the assessment order.
Held
The Tribunal held that the CIT(A) had erred in not reviving the appeal against the assessment order, which was wrongly dismissed due to a mistake. The Tribunal emphasized that the assessee cannot be left remediless and it is the responsibility of the CIT(A) to adjudicate the appeal on merit.
Key Issues
Whether the CIT(A) was justified in refusing to revive the assessee's appeal against the assessment order, which was dismissed due to a mistaken application of the Vivad Se Vishwas Scheme to the wrong appeal?
Sections Cited
271F, 154, 250, 147, 144, 148, 54
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, MUMBAI BENCH “K (SMC
Before: SHRI OM PRAKASH KANT & MS. KAVITHA RAJAGOPAL
This appeal has been preferred by the assessee against order dated 22/07/2024 passed by the Ld. Commissioner of Income-tax (Appeals) – National Faceless Appeal Centre, Delhi [in short ‘the Ld.
CIT(A)’] u/s 154 r.w.s. 250 of the Income u/s 154 r.w.s. 250 of the Income-tax Act, 1961 (in sho tax Act, 1961 (in short ‘the Act’) for assessment year 2010 ‘the Act’) for assessment year 2010-11, raising following grounds: 11, raising following grounds:
On the facts and circumstances of the case and law, the Ld. CIT(A) erred 1. On the facts and circumstances of the case and law, the Ld. CIT(A) erred 1. On the facts and circumstances of the case and law, the Ld. CIT(A) erred in not reviving the appeal filed against the assessment order which was in not reviving the appeal filed against the assessment order which was in not reviving the appeal filed against the assessment order which was wrongly closed while passing the order wrongly closed while passing the order in appeal filed against the penalty in appeal filed against the penalty order under section 271F which is settled under VSV Scheme 2020. order under section 271F which is settled under VSV Scheme 2020. order under section 271F which is settled under VSV Scheme 2020. Hence, the appeal filed against the assessment order is closed without passing the appeal filed against the assessment order is closed without passing the appeal filed against the assessment order is closed without passing any order under section 250 on grounds of appeal
raised in that appeal any order under section 250 on grounds of appeal raised in that appeal any order under section 250 on grounds of appeal raised in that appeal and required to be revive and heard on merits required to be revive and heard on merits
2. On the facts and circumstances of the case and law, the Ld. CIT(A) erred
2. On the facts and circumstances of the case and law, the Ld. CIT(A) erred
2. On the facts and circumstances of the case and law, the Ld. CIT(A) erred in confirming the validity of reassessment notice issued under section 148 in confirming the validity of reassessment notice issued under section 148 in confirming the validity of reassessment notice issued under section 148 on basis of AIR report is bad in law and required to be quashed on basis of AIR report is bad in law and required to be quashed on basis of AIR report is bad in law and required to be quashed
3. On the facts and circumstances of the case and law, the Ld. CIT(A) erred
3. On the facts and circumstances of the case and law, the Ld. CIT(A) erred
3. On the facts and circumstances of the case and law, the Ld. CIT(A) erred in making addition of Rs 2271305 on account of Long Term Capital Gain in making addition of Rs 2271305 on account of Long Term Capital Gain in making addition of Rs 2271305 on account of Long Term Capital Gain without considering the fact that sale proceeds of flat were utilized for without considering the fact that sale proceeds of flat were utilized for without considering the fact that sale proceeds of flat were utilized for buying another residential property buying another residential property and same is eligible for exemption and same is eligible for exemption under section 54 of Income Tax Act under section 54 of Income Tax Act
2. Briefly stated, facts of the case are that against reassessment Briefly stated, facts of the case are that against reassessment Briefly stated, facts of the case are that against reassessment order passed u/s 147 r.w.s. 144 dated 20.12.2017, the assessee order passed u/s 147 r.w.s. 144 dated 20.12.2017 order passed u/s 147 r.w.s. 144 dated 20.12.2017 preferred appeal before the Ld. CIT(A). The assessee also preferred preferred appeal before the Ld. CIT(A). The assessee al preferred appeal before the Ld. CIT(A). The assessee al appeal against a penalty order penalty order dated 26/06/2018 passed u/s 271F passed u/s 271F of the Act. The appeals against both tho ct. The appeals against both those orders se orders, firstly, order passed u/s 147 and passed u/s 147 and secondly, penalty order passed u/s 271F , penalty order passed u/s 271F, were pending before the Ld. CIT(A). Meanwhile, the as pending before the Ld. CIT(A). Meanwhile, the assessee sessee opted for benefit of Vivad Se Vishwas Scheme, 2020 Vivad Se Vishwas Scheme, 2020 in respect of in respect of appeal against the penalty order u/s 271F of the Act, and sought for against the penalty order u/s 271F of the Act, against the penalty order u/s 271F of the Act, withdrawal of appeal against order u/s 271F of the Act, but the Ld. withdrawal of appeal against order u/s 271F of the Act, but withdrawal of appeal against order u/s 271F of the Act, but CIT(A) by mistake dismissed the appeal of the CIT(A) by mistake dismissed the appeal of the assessee filed against assessee filed against order u/s 147 as withdrawn as withdrawn under the impression that Vivad Se under the impression that Vivad Se Vishwas Scheme was opted for appeal against u/s 147 of the Act. Vishwas Scheme was opted for appeal against u/s 147 of the Act. Vishwas Scheme was opted for appeal against u/s 147 of the Act.
The relevant finding of the Ld. CIT(A) in order dated 30.03.2021 is The relevant finding of the Ld. CIT(A) in order dated 30.03.2021 is The relevant finding of the Ld. CIT(A) in order dated 30.03.2021 is reproduced as under: reproduced as under:
“The present appeal in this case was filed on 25.08.2019 by the appellant appeal in this case was filed on 25.08.2019 by the appellant appeal in this case was filed on 25.08.2019 by the appellant against order dated 20.12.2017 (served on 01.08.2019 as per Form No. against order dated 20.12.2017 (served on 01.08.2019 as per Form No. against order dated 20.12.2017 (served on 01.08.2019 as per Form No. 35) of the Assessing Officer passed under section 147 r.w.s. 144 of the 35) of the Assessing Officer passed under section 147 r.w.s. 144 of the 35) of the Assessing Officer passed under section 147 r.w.s. 144 of the Income Tax Act, 1961 (henceforth 'the Act) for the Ass Income Tax Act, 1961 (henceforth 'the Act) for the Assessment Year 2010 essment Year 2010- 11. Subsequently, the appeal was migrated to the National Faceless 11. Subsequently, the appeal was migrated to the National Faceless 11. Subsequently, the appeal was migrated to the National Faceless Appeal Centre in terms of Notification No. 76 of 2020 dated 25.09.2020 Appeal Centre in terms of Notification No. 76 of 2020 dated 25.09.2020 Appeal Centre in terms of Notification No. 76 of 2020 dated 25.09.2020 issued by the CBDT. issued by the CBDT. 2.0. It is noted that the appellant opted for the Vivad Se Vishwas Scheme, 2.0. It is noted that the appellant opted for the Vivad Se Vishwas Scheme, 2.0. It is noted that the appellant opted for the Vivad Se Vishwas Scheme, 2020. Pursuant thereto, the Pr.CIT, Mumbai Pursuant thereto, the Pr.CIT, Mumbai-27 has certified the full and 27 has certified the full and final payment of Rs. 1250/ final payment of Rs. 1250/- as taxes in terms of Form No.
5. In view of the as taxes in terms of Form No.
5. In view of the above, the appeal is treated as infructuous as per the Direct Tax Vivad Se above, the appeal is treated as infructuous as per the Direct Tax Vivad Se above, the appeal is treated as infructuous as per the Direct Tax Vivad Se Vishwas Act, 2020. Vishwas Act, 2020.” 2.1 However, on being eing noticed that the Vivad Se Vishwas Scheme that the Vivad Se Vishwas Scheme was opted by the assessee by the assessee in relation to appeal filed against penalty in relation to appeal filed against penalty order u/s 271F of the Act and not in relation to appeal filed against order u/s 271F of the Act and not in relation to appeal filed against order u/s 271F of the Act and not in relation to appeal filed against order u/s 147 of the Act, the Ld. CIT(A) rectified its order dated order u/s 147 of the Act, the Ld. CIT(A) rectified its order dated order u/s 147 of the Act, the Ld. CIT(A) rectified its order dated 30.03.2021 and treated the appeal against penalty order u/s 271F 03.2021 and treated the appeal against penalty order u/s 271F 03.2021 and treated the appeal against penalty order u/s 271F of the Act as dismissed. The relevant finding of the Ld. CIT(A)’s of the Act as dismissed. The relevant finding of the Ld. CIT(A) of the Act as dismissed. The relevant finding of the Ld. CIT(A) order dated 30/06/2021 order dated 30/06/2021 is reproduced as under:
“In this case, an order u/s 250 of the IT Act, 1961 was passed on In this case, an order u/s 250 of the IT Act, 1961 was passed on In this case, an order u/s 250 of the IT Act, 1961 was passed on 30.03.2021, as 30.03.2021, as the appellant opted for the Vivad Se Vishwas Scheme and the appellant opted for the Vivad Se Vishwas Scheme and the concerned PCIT, Mumbai the concerned PCIT, Mumbai-27 also issued Form No. 5 u/s 5(2) r.w.s. 6 of 27 also issued Form No. 5 u/s 5(2) r.w.s. 6 of the Direct Taxes Vivad Se Vishwas Scheme 2020 dated 25/01/2021. the Direct Taxes Vivad Se Vishwas Scheme 2020 dated 25/01/2021. the Direct Taxes Vivad Se Vishwas Scheme 2020 dated 25/01/2021. Now it has come to the notice of this office that the section Now it has come to the notice of this office that the section under which the under which the order appealed against was passed had wrongly been mentioned section order appealed against was passed had wrongly been mentioned section order appealed against was passed had wrongly been mentioned section 147 r.w.s. 144 of the IT Act instead of section 271F of the IT Act, 1961 in 147 r.w.s. 144 of the IT Act instead of section 271F of the IT Act, 1961 in 147 r.w.s. 144 of the IT Act instead of section 271F of the IT Act, 1961 in the aforesaid appellate order, as the appellant opted the Vivad Se Vishwas the aforesaid appellate order, as the appellant opted the Vivad Se Vishwas the aforesaid appellate order, as the appellant opted the Vivad Se Vishwas Scheme only in resp Scheme only in respect of penalty order u/s 271F passed by the AO on ect of penalty order u/s 271F passed by the AO on 26.06.2018 and not in respect of assessment order passed by the AO u/s 26.06.2018 and not in respect of assessment order passed by the AO u/s 26.06.2018 and not in respect of assessment order passed by the AO u/s 147 r.w.s. 144 of the IT Act on 20.12.2017. The mistake apparent from the 147 r.w.s. 144 of the IT Act on 20.12.2017. The mistake apparent from the 147 r.w.s. 144 of the IT Act on 20.12.2017. The mistake apparent from the record is required to be rectified within the meaning of u/s record is required to be rectified within the meaning of u/s record is required to be rectified within the meaning of u/s 154 of the IT Act 1961. In the light of above mentioned Act 1961. In the light of above mentioned facts an opportunity notice of facts an opportunity notice of hearing for the proceedings u/s 154 of the hearing for the proceedings u/s 154 of the IT Act 1961 was issued to the Appallent on 25/05/2021 for submission of IT Act 1961 was issued to the Appallent on 25/05/2021 for submission of IT Act 1961 was issued to the Appallent on 25/05/2021 for submission of his reply in the matter on or before 31/05/2021. In re his reply in the matter on or before 31/05/2021. In response to the notice, sponse to the notice, the assessee has submitted as under : the assessee has submitted as under :- " This appeal is wrongly dismissed under VSV. Assessee had opted for " This appeal is wrongly dismissed under VSV. Assessee had opted for " This appeal is wrongly dismissed under VSV. Assessee had opted for VSV for Penalty under section 271F and paid Rs.1250. But instead of VSV for Penalty under section 271F and paid Rs.1250. But instead of VSV for Penalty under section 271F and paid Rs.1250. But instead of closing that appeal your goodself has closed this appeal w closing that appeal your goodself has closed this appeal w closing that appeal your goodself has closed this appeal which is filed against order under section 144 r.w. 147 of income tax act. Therefore, we against order under section 144 r.w. 147 of income tax act. Therefore, we against order under section 144 r.w. 147 of income tax act. Therefore, we request your honour to kindly restore this appeal and close appeal which request your honour to kindly restore this appeal and close appeal which request your honour to kindly restore this appeal and close appeal which is filed against order under section 271F of Income Tax Act 1961." is filed against order under section 271F of Income Tax Act 1961." is filed against order under section 271F of Income Tax Act 1961." In view the above facts, the In view the above facts, the mistake apparent form the record is hereby mistake apparent form the record is hereby rectified now. The section under which the order appealed against was rectified now. The section under which the order appealed against was rectified now. The section under which the order appealed against was passed may be read as section 271F vide order dated 26.06.2018 instead passed may be read as section 271F vide order dated 26.06.2018 instead passed may be read as section 271F vide order dated 26.06.2018 instead of section 147 r.w.s. 144 of the Act vide order dated of section 147 r.w.s. 144 of the Act vide order dated 20.12.2017 as mentioned in the order passed u/s 250 of the IT Act on 30.03.2021. tioned in the order passed u/s 250 of the IT Act on 30.03.2021.” tioned in the order passed u/s 250 of the IT Act on 30.03.2021. 2.2 In view of the above situation, the assessee In view of the above situation, the assessee vide letter dated vide letter dated 9/9/2023 requested for revival of the appeal against the order u/s requested for revival of the appeal against the order u/s requested for revival of the appeal against the order u/s 147 Act for deciding on the merit but t for deciding on the merit but the Ld. CIT(A) he Ld. CIT(A) vide impugned order dated 22/07/2024 order dated 22/07/2024 declined the request on the ground that declined the request on the ground that revival was beyond his purview. The relevant finding of the Ld. revival was beyond his purview. The relevant finding of the Ld. revival was beyond his purview. The relevant finding of the Ld. CIT(A) is reproduced as under: CIT(A) is reproduced as under:
“2. Decision It is seen that the appellant had opted for VsV scheme for penalty levied It is seen that the appellant had opted for VsV scheme for penalty levied It is seen that the appellant had opted for VsV scheme for penalty levied u/s 271F of the Act and had sought to withdraw the appeal filed against u/s 271F of the Act and had sought to withdraw the appeal filed against u/s 271F of the Act and had sought to withdraw the appeal filed against the above penalty. Inadvertently, appeal order was passed on 30.06.2021 the above penalty. Inadvertently, appeal order was passed on 30.06.2021 the above penalty. Inadvertently, appeal order was passed on 30.06.2021 against the order passed u/s 147 r.w.s. 144 of the Act. However, a against the order passed u/s 147 r.w.s. 144 of the Act. However, a against the order passed u/s 147 r.w.s. 144 of the Act. However, a rectification order was passed on the same da rectification order was passed on the same date rectifying the above te rectifying the above mistake. However, as per appellant, the appeal filed against the mistake. However, as per appellant, the appeal filed against the mistake. However, as per appellant, the appeal filed against the assessment order has been closed in the system and in his rectification assessment order has been closed in the system and in his rectification assessment order has been closed in the system and in his rectification application, the appellant has sought to revive the appeal against the application, the appellant has sought to revive the appeal against the application, the appellant has sought to revive the appeal against the original assessment orde original assessment order. However, it is made clear that the action of reviving a closed appeal is However, it is made clear that the action of reviving a closed appeal is However, it is made clear that the action of reviving a closed appeal is does not falls within the purview of rectification process and therefore, the does not falls within the purview of rectification process and therefore, the does not falls within the purview of rectification process and therefore, the application is not within the jurisdiction of the undersigned to adjudicate. application is not within the jurisdiction of the undersigned to adjudicate. application is not within the jurisdiction of the undersigned to adjudicate. The appellant may approac The appellant may approach the appropriate authority for the same. h the appropriate authority for the same. Therefore, the rectification application is hereby dismissed. Therefore, the rectification application is hereby dismissed.” ”
Aggrieved with the above finding of the Ld. CIT(A), the assessee Aggrieved with the above finding of the Ld. CIT(A), the assessee Aggrieved with the above finding of the Ld. CIT(A), the assessee is in appeal before the Tribunal by way of raising grounds as is in appeal before the Tribunal by way of raising grounds as is in appeal before the Tribunal by way of raising grounds as reproduced above.
We have heard rival submission of the parties and perused the We have heard rival submission of the parties and perused the We have heard rival submission of the parties and perused the relevant material on record. In view of the above facts, it is evident relevant material on record. In view of the above facts relevant material on record. In view of the above facts that the Ld. CIT(A) by inadvertent mistake adjudicated the appeal of that the Ld. CIT(A) by inadvertent mistake adjudicated the appeal of that the Ld. CIT(A) by inadvertent mistake adjudicated the appeal of against the order u/s 147 of the Act. the assessee , which was filed , which was filed against the order u/s However, he rectified the However, he rectified the said mistake occurred in order dated occurred in order dated 30/03/2021 and substituted and substituted word ‘the appeal against the appeal against the order levy of the penalty u/s 271F of under section 147’ by way of word ‘ under section 147’ by way of word ‘levy of the penalty u/s 271F of the Act’ . In our opinion, once, the Ld. CIT(A) . In our opinion, once, the Ld. CIT(A) has rectified his has rectified his order u/s 147 of the Act’ with mistake and substituted the mistake and substituted the word ‘order u/s 147 of the Act the word ‘order u/s 271F word ‘order u/s 271F of the Act’, then, the appeal against the the appeal against the order u/s 147 which was inadvertently dismissed order u/s 147 which was inadvertently dismissed, got revived and thus the Ld. CIT(A) was required to adju the Ld. CIT(A) was required to adjudicate the appeal of the dicate the appeal of the assessee in relation to order u/s 147 of the Act on merit. The Ld. assessee in relation to order u/s 147 of the Act on merit. The Ld. assessee in relation to order u/s 147 of the Act on merit. The Ld. CIT(A) has expressed his in ability for the reason that window CIT(A) has expressed his in ability for the reason that window CIT(A) has expressed his in ability for the reason that window available on the system of the Department was already closed. In available on the system of the Department was already closed. In available on the system of the Department was already closed. In our opinion, this could not be a val our opinion, this could not be a valid ground for not deciding appeal id ground for not deciding appeal of the assessee. The mistake was on the part of the Ld. CIT(A) and of the assessee. The mistake was on the part of the Ld. CIT(A) and of the assessee. The mistake was on the part of the Ld. CIT(A) and once he has rectified the mistake, in principle, the appeal against ectified the mistake, in principle, the appeal against ectified the mistake, in principle, the appeal against order passed u/s 147 automatically go order passed u/s 147 automatically got revived. If the system does t revived. If the system does not permit the Ld. C not permit the Ld. CIT(A) was required to take appropriate action IT(A) was required to take appropriate action with the system authorities for with the system authorities for making required modification in making required modification in system for revival of the appeal system for revival of the appeal . The assessee cannot be made . The assessee cannot be made remediless against the order passed by the Assessing Officer and it remediless against the order passed by the Assessing Officer and it remediless against the order passed by the Assessing Officer and it is the responsibility of the Ld. CIT(A) to adjudicate the relevant bility of the Ld. CIT(A) to adjudicate the relevant bility of the Ld. CIT(A) to adjudicate the relevant appeal of the assessee on merit and pass a reasoned order. In view appeal of the assessee on merit and pass a reasoned order. In view appeal of the assessee on merit and pass a reasoned order. In view of the above discussion, we set aside the order of the Ld. CIT(A) on of the above discussion, we set aside the order of the Ld. CIT(A) on of the above discussion, we set aside the order of the Ld. CIT(A) on the issue in dispute and restore the matter back to him for deciding the issue in dispute and restore the matter back to him for deciding the issue in dispute and restore the matter back to him for deciding the appeal of the assessee filed against order u/s 147 passed by the the appeal of the assessee filed against order u/s 147 passed by the the appeal of the assessee filed against order u/s 147 passed by the Assessing Officer.
In the result, the appeal of the assessee is allowed. In the result, the appeal of the assessee is allowed. In the result, the appeal of the assessee is allowed.