DILIP DINESH PATEL (HUF),MUMBAI V. INCOME TAX OFFICER WARD 1(1), THANE

ITA 1368/MUM/2025

AI Insights

The case involves an appeal by Dilip Dinesh Patel (HUF) against the order of the Commissioner of Income-Tax (Appeals), which dismissed the appeal on the grounds that the assessee had opted for the Direct Tax Vivad se Vishwas Scheme, 2020 (DTVSVS-20) and had received Form-3 from the Designated Authority. The CIT(A) dismissed the appeal without considering the assessee's submission that the tax liability was not paid in time, rendering the DTVSVS-20 application infructuous. The Tribunal found that the CIT(A) did not take cognizance of the assessee's failure to settle the tax liability and thus restored the matter for a decision on the merits.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 126313 (ITAT-MUMBAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-04-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Laws Referred To: Income-Tax Act, 1961, DTVSV Act, 2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIJAY KR. G. SUBRAMANYAM
• Assessee Lawyers: DHWANI SHAH
• Keywords: Opportunity of cross examination; Grounds of appeal; Dismissed; National Faceless Appeal; Commissioner; VSVS; A.Y. 2011-12; Restored; Exempt; Deleted; VsV; Order under section 254; VSV Act, 2020
• Section: 250

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL, ‘SMC’ BENCH MUMBAI BEFORE: SHRI PAWAN SINGH, JUDICIAL MEMBER ITA No. 1368/MUM/2025(AY: 2011–12) (Physical hearing) Dilip Dinesh Patel (HUF) 402, Neelkanth Pooja, M.G. Road, Hindu Colony, Naupada, Thane (W)-400602. Vs. Income Tax Officer Ward-1(1), Qureshi Mansion, Gokhale Road, Thane-400602. PAN/GIR No. AAAHD0978G (Appellant) .. (Respondent) Assessee by Ms. Dhwani Shah CA Revenue by Shri. Vijay Kr. G. Subramanyam, Sr. DR Date of institution of appeal 27.02.2025 Date of Hearing 23/04/2025 Date of Pronouncement 23/04/2025 Order Under Section 254(1) of Income Tax Act PER PAWAN SINGH ,JUDICIAL MEMBER; 1. This appeal by assesses is preferred against the order dated 31.12.2024 passed in Appeal no. CIT(A), Thane-1/10794/2018-19 by the Ld. Commissioner of Income–tax(Appeals)/ National Faceless Appeal Centre (NFAC) [hereinafter referred to as the “CIT(A)”] under section 250 of the Income-Tax Act, 1961 [hereinafter referred to as \"Act\"] for the Assessment year [A.Y.] 2011-12. The assessee has taken the following grounds: “ 1 On the facts and circumstances of the case and in law, the JCIT (A) has erred in dismissing the appeal on the ground that the appellant had opted for DTVSV Scheme, 2020 and Form-3 was also issued by the Designated Authority without appreciating the fact that the appellant had not made paid the amount which he was required to pay under that Scheme and, therefore, it was required to be presumed that the declaration was never been made by the appellant as per the provisions of Section 4 (6) of the DTVSV Act, 2020. ITA no. 1368/MUM/2025 Dilip Dinesh Patel (HUF) 2 2 On the facts and circumstances of the case and in law, the JCIT (A) ought to have decided the issues raised vide Grounds of Appeal filed along with Form No. 35 on merits instead of dismissing the appeal. 3. On the facts and circumstances of the case and in law, the JCIT (A) ought to have deleted the addition of ₹ 16,54,659 which was assessed as income under the head income from other sources and ought to have granted the exemption with respect to that amount as claimed by the appellant under Section 10(38). 4. On the facts and circumstances of the case and in law, the JCIT (A) ought to have deleted the addition of ₹ 37,346 as made by the Assessing Officer by alleging that the appellant had paid the commission @2% of the transaction amount in respect of which the exemption was claimed under Section 10(38). 5. On the facts and circumstances of the case and in law, the JCIT (A) ought to have quashed the assessment made by the Assessing Officer by relying upon the statements and other evidences without providing the copies thereof to the appellant and without providing the opportunity of cross examination to the appellant. The Appellant craves leave to add, alter, amend, vary and/ or withdraw any or all the above grounds of appeal.” 2. The rival submissions of both the parties have been heard and record perused. At the outset of hearing, the learned authorized representative (Ld. AR) of the assessee submits that during the pendency of appeal before Ld. CIT(A), the assessee applied for availing benefit under direct tax Vivad se Vishwas 2020 (VSVS-20). On making application under VSVS-2020, Form no. 3 was issued to the assessee determining tax liability. However, the assessee could not deposit tax liability in time. Thus, as per Section 4 and 5 of VSVS-20, the application of assessee has become infructuous. The assessee made such submission in his in his submission uploaded on ITBA portal on 05.12.2024. However, the Ld. CIT(A) has not taken cognizance of such submission and dismissed the appeal by taking view that assessee has settled the dispute and the appeal has become ITA no. 1368/MUM/2025 Dilip Dinesh Patel (HUF) 3 infructuous. In fact the application filed by assessee for seeking beneficial VSVS- 2020 was failed due to non-payment of tax liability in time. Thus, the Ld. CIT(A) was required to decide appeal on merit. The Ld. CIT(A) wrongly dismissed the appeal without taking cognizance of other submissions of assessee. The ld. AR of the assessee prayed that matter may be restored back to the eyes of Ld. CIT(A) for adjudication of appeal on merit as per manadate of section 250(6). 3. On the other hand, the Ld. DR for the revenue submits that perhaps the assessee has not provided information to the office of ld CIT(A) that application filed for availing benefit under VSVS-2020 has failed due to non-payment of tax liability. Therefore, he has no objection if the matter is restored back to the file of CIT(A) for adjudication of appeal on merit. 4. I have considered the submission for the parties and perused the orders of lower authority carefully. It is an admitted fact that initially during the pendency of Ld. CIT(A), the assessee tried to avail benefit of VSVS 2020. However, the assessee could not pay the tax liability determined by designated authority. The Ld. CIT(A) on the basis of information in his record and by taking cognizance of fact that assessee applied for VSVS-2020 and treated the appeal as infructuous. Now, before me the Ld. AR of the assessee fairly accepted that admitted tax liability was not paid by assessee, thus, her appeal may be restored back to the file of Ld. CIT(A) for adjudication on merit. Considering the fact that Ld. CIT(A) has not taken into cognizance of the facts that tax liability qua A.Y. 2011-12 has not been settled finally in VSVS-2020 due to failure in the part of assessee in making tax liability. Therefore, the matter is restored back to the file of Ld. CIT(A) to adjudicate the various ground of appeal raised by the assessee on ITA no. 1368/MUM/2025 Dilip Dinesh Patel (HUF) 4 merit. Needless to direct that before passing the order, Ld. CIT(A) shall allow reasonable opportunity to the assessee. The assessee is also directed to be vigilant in future and to make timely compliance and to bring all the facts in the notice of Ld. CIT(A). In the result, the grounds raised by the assessee are allowed for statistical purpose. 5. In the result, appeal of the assessee is allowed for statistical purpose. Order pronounced in open court on 23.04.2025 at the time of hearing. Sd/- (PAWAN SINGH) JUDICIAL MEMBER Mumbai; Dated 23/04/2025 Anandi Nambi, Steno Copy of the Order forwarded to: BY ORDER, (Asstt. Registrar) ITAT, Mumbai 1. The Appellant 2. The Respondent. 3. CIT 4. DR, ITAT, Mumbai 5. Guard file. "