Venkata Reddy Sathi Vs ITO (ITAT Visakhapatnam)
The Visakhapatnam Bench of the Income Tax Appellate Tribunal (ITAT) allowed the assessee’s appeal after holding that a bona fide mistake in withdrawing the wrong appeal did not defeat settlement under the Direct Tax Vivad Se Vishwas Scheme, 2020.
The assessee had filed the return of income for AY 2016-17 declaring total income of Rs. 4,75,040. Subsequently, reassessment proceedings were initiated under Section 148, and a reassessment order was passed on 23.05.2023. The assessee challenged the reassessment order before the CIT(A) on 06.06.2023. Separately, a penalty order under Section 271(1)(c) dated 01.01.2024 was also challenged before the CIT(A) on 20.01.2024. Both appeals remained pending.
During the pendency of these appeals, the assessee filed a declaration under the Direct Tax Vivad Se Vishwas Scheme, 2020 on 22.07.2024. The Designated Authority subsequently issued Form-1 on 31.01.2025, Form-2 on 13.02.2025, Form-3 on 25.02.2025, and Form-4 on 01.04.2025.
After receiving Form-2, the assessee applied before the CIT(A) to withdraw the appeal. However, due to a bona fide and inadvertent mistake, the withdrawal application was filed in the penalty appeal instead of the quantum appeal. Meanwhile, the CIT(A) passed the impugned order dated 05.02.2025 in the quantum appeal. The assessee believed that the appeal had been dismissed as withdrawn in view of settlement under the Vivad Se Vishwas Scheme.
