Pagadala Velugonda Reddy Vs ACIT (ITAT Raipur)
VSVS for Penalty ≠ VSVS for Quantum— CIT(A)’s Mistaken Assumption on VSVS Leads to Full Remand
Assessee, a senior citizen deriving agricultural income & not originally required to file return for AY 2013-14, faced reassessment completed ex-parte u/s 147 r.w.s.144 with addition of Rs.19,20,000 treating entire cash deposits as unexplained investment u/s 69. Before CIT(A)-NFAC, Assessee filed detailed submissions & evidence; however, CIT(A) dismissed appeal presuming Assessee had opted for settlement of quantum dispute under Vivad Se Vishwas Scheme (VSVS) 2020. Assessee clarified before Tribunal that VSVS application (Form-1 & Form-3 dated 12.11.2020 & 22.12.2020 ) pertained only to penalty u/s 271F & 271(1)(b) & not to quantum addition. Tribunal noted the identical mistake had been addressed earlier in Srinivas Rachiraju Vs ITO, ITA 361/RPR/2025, where CIT(A) had similarly misread VSVS for penalty as VSVS for quantum. Tribunal held that CIT(A) mis-appreciated facts, dismissed appeal under mistaken belief & failed to adjudicate merits. In the interest of justice, Tribunal set aside CIT(A)’s order & remanded matter for de-novo adjudication, directing verification of whether VSVS applied only to penalty & thereafter deciding quantum grounds as per law. Appeal allowed for statistical purposes.
FULL TEXT OF THE ORDER OF ITAT RAIPUR
