The Chennai bench of the Income Tax Appellate Tribunal (ITAT) has directed the National Faceless Appeal Centre (NFAC) to decide appeals on merits since the same cannot be dismissed merely because the Assessee opted VSVS and Form 5 is Issued.
The appeals against the assessee, Shri Poosabban Thangaraju was dismissed on the ground that the assessee has already opted for VSVS scheme and Form No. 5 dated 25.03.2020 has already been issued to the assessee.
The assessee contended that t Form No. 5 has been issued in respect of penalty levied under section 271A of the Act alone and therefore, the ld. CIT(A) [NFAC] was not correct in dismissing the appeals of the assessee.
Allowing the above contention, Shri V. Durga Rao, Judicial Member & Shri Manoj Kumar Aggarwal, Accountant Member has observed that “on perusal of the Form 5 dated 25.03.2021 issued under VSVS by the Designated Authority for both the assessment years, we find that the Form 5 has been issued for full and final payment of ₹.6,250/- as taxes in terms of VSVS order under section 5(2) dated 05.02.2021 pertains to disputed penalty levied under section 271A of the Act, against which, vide order dated 31.03.2021 for the AY 2007-08 and dated 01.04.2021 for AY 2008-09, the CIT(A) [NFAC] has passed separate orders by referring to the same Form 5, whereas, the present appeals were preferred by the assessee against the assessment order under section 143(3) r.w.s. 147 of the Act.”
“In view of the above facts, we are of the considered opinion that the ld. CIT(A) [NFAC] was not correct in dismissing the appeals for both the assessment years on the ground that the assessee has already opted for VSVS and Form 5 has been issued. In view of the above, the order passed by ld. CIT(A) [NFAC] is set aside for both the assessment years and remit the matter back to the file of the ld. CIT(A) [NFAC] to adjudicate the appeals on merits in accordance with law,” the Tribunal said.
Shri S. Sridhar, Advocate appeared for the assessee.
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