Case Law Details
Sundararajan Raghunathan Vs ITO (ITAT Chennai)
Vivad-Se-Vishwas Didn’t Mature — Appeal Can’t Die by Assumption
The ITAT Chennai condoned a 168-day delay and set aside the CIT(A)’s order which had dismissed the appeal as “withdrawn” merely because the assessee had opted for Vivad-Se-Vishwas, 2020.
The assessee had filed Form-3 under the Scheme, which the CIT(A) himself acknowledged, but the assessee could not make payment by 31.03.2021 due to financial distress. Consequently, the dispute was never settled under the Scheme. Despite this, the CIT(A) dismissed the appeal without adjudicating the merits, treating it as withdrawn.
The Tribunal held that mere opting for VSV does not extinguish the statutory appeal unless the scheme actually culminates in settlement. Where the declaration fails or is not carried through, the original appeal revives automatically and must be decided on merits u/s 250(6).
In the interest of justice and fair play, the ITAT restored the appeal to the file of the CIT(A) with a clear direction to adjudicate the grounds on merits after granting opportunity. The appeal was allowed for statistical purposes.
FULL TEXT OF THE ORDER OF ITAT CHENNAI
This is an appeal preferred by the assessee against the order of the Learned Commissioner of Income Tax (Appeals)/Addl./JCIT(A), (hereinafter referred to as “the Ld.CIT(A)”), Kochi, dated 14.02.2025 for the Assessment Year (hereinafter referred to as “AY”) 2017-18.
2. At the outset, the Ld.AR of the assessee brought to our notice that the appeal has been filed belatedly by ‘168’ days and for condoning the delay, the assessee has filed an affidavit explaining the cause for the delay. Having gone through the contents of the same, we find that cause for delay to be reasonable, so we excuse the same and proceed to hear the assessee’s appeal.
3. The main grievance of the assessee is against the action of the Ld.CIT(A) dismissing the appeal of the assessee without going into the merits of the grounds of appeal raised by the assessee.
4. The brief facts of the case are that the assessee filed return of income (RoI) on 24.10.2017 by declaring income of ₹11,15,500/- in ITR-4 Sugam viz., presumptive business income offering 50% of the income for taxation. Later, the case of the assessee was selected for scrutiny through CASS to verify the credit-card payments. The AO noted that the assessee had made payments by credit-card to the tune of ₹38,37,072/-which assessee explained as payments made for expenses reimbursed by clients. Since the assessee didn’t file any proof for the aforesaid claim of the assessee, the AO made addition of ₹38,37,072/- by passing the assessment order on 19.12.2019. The assessee is noted to have filed appeal before Ld CIT(A) against the action of AOP and also opted for settlement of Tax dispute through Direct Tax Vivad-Se-Vishwas Scheme-2020 (hereinafter referred to as ‘the Scheme‘) and filed Form-3 dated 05.02.2021 issued by the Ld.PCIT, Chennai-1, which fact the Ld.CIT(A) acknowledged [refer Page No.3 of the impugned order] and thereafter, he dismissed the appeal by holding as under:
4. In view of the above, the appeal is treated as withdrawn by the appellant in terms of the Direct Tax Vivad Se Vishwas Scheme, 2020. However, the aforesaid is subject to a caveat that in case the dispute relating to tax arrears for the captioned assessment year is not ultimately resolved in terms of the afore stated Act, the appellant shall be at liberty to approach the Appellate Authority for re-institution of the Appeal and the Appellate Authority shall consider such application appropriately as per law.
5. Accordingly, the appeal is treated as dismissed.
5. Aggrieved, the assessee preferred this appeal before this Tribunal and brought to our notice that due to financial distress, the assessee couldn’t make the payment as per the Scheme before 31.03.2021 and therefore couldn’t settle the matter as per the Scheme. And therefore, the assessee has preferred this appeal before this Tribunal praying for restoration of appeal back to file of the Ld.CIT(A), so that he can adjudicate the grounds of appeal raised by the assessee on merits. The aforesaid facts stated supra are not disputed. In such a scenario, for the interest of justice and fair play, we set aside the impugned order of the Ld.CIT(A) and restore the appeal back to his file with a direction to adjudicate the grounds of appeal raised by the assessee as per subsection (6) of Section 250 of the Income Tax Act, 1961 in accordance to law after hearing the assessee. The assessee to be diligent and file all the relevant documents/written submissions in support of its grounds of appeal. The Ld.CIT(A) to decide the grounds of appeal in accordance to law after hearing the assessee.
6. In the result, appeal filed by the assessee is allowed for statistical purposes.
Order pronounced on the 04th day of February, 2026, in Chennai.
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