Erroneous settlement-scheme dismissal requires fresh merits adjudication after delay is condoned on terms and fair opportunity is provided.

An appeal dismissed as infructuous on an unverified assumption of settlement under the Vivad se Vishwas Scheme requires fresh merits adjudication where the settlement concerned a separate assessment order. The notes state that the National Faceless Appeal Centre relied on incorrect portal information without direct confirmation, and that the assessee must receive an opportunity to be heard before determination. Delay in challenging the dismissal may be condoned on terms where responsibility for the confusion is shared, the assessee's understanding of the applicable transfer arrangement was not unfounded, and the COVID-19 limitation exclusion is material. The matter was restored for adjudication in accordance with law.

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Issues: (i) Whether the delay of 1206 days in filing the appeal should be condoned; (ii) Whether the appeal dismissed as infructuous on the assumption of settlement under the Vivad se Vishwas Scheme required fresh adjudication.

Issue (i): Whether the delay of 1206 days in filing the appeal should be condoned.

Analysis: The explanation for discovering the dismissal only after several years was not wholly satisfactory, particularly given the assessee's professional support and statutory audits. However, the National Faceless Appeal Centre had dismissed the appeal upon incorrect portal information that the dispute was settled under the Vivad se Vishwas Scheme, without direct confirmation. The assessee's belief that the jurisdictional Commissioner (Appeals) would deal with the appeal was also not unfounded under the applicable CBDT transfer arrangement. The exclusion of limitation during the COVID-19 period was material. Both the assessee and the National Faceless Appeal Centre were responsible for the delay and confusion.

Conclusion: The delay was condoned upon payment of Rs.50,000 to the Prime Minister's Relief Fund, in favour of the assessee.

Issue (ii): Whether the appeal dismissed as infructuous on the assumption of settlement under the Vivad se Vishwas Scheme required fresh adjudication.

Analysis: The dismissal proceeded on an erroneous factual premise that the issues arising from the assessment order under Section 143(3) read with Section 144C had been settled under the Scheme, whereas the settlement related to a separate assessment order under Section 143(3) read with Section 263. A merits determination after affording the assessee an opportunity was therefore required.

Conclusion: The matter was remanded to the National Faceless Appeal Centre for fresh adjudication in accordance with law, in favour of the assessee.

Final Conclusion: The erroneous treatment of a distinct appeal as settled could not deprive the assessee of adjudication on merits; the dispute must be reconsidered after granting a fair opportunity.

Ratio Decidendi: Where an appeal is dismissed on an unverified and erroneous assumption that the underlying dispute stands settled under a settlement scheme, and the delay is partly attributable to that error and the excluded COVID-19 limitation period, delay may be condoned on terms and the matter restored for merits adjudication.

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