ASHOK,DELHI V. COMMISSION OF INCOME TAX (APPEALS), DELHI

ITA 4255/DEL/2024

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The case involves an appeal by the assessee, Ashok, against the order of the CIT(A), National Faceless Appeal Centre, which dismissed his appeal for non-payment of advance tax. The assessee had not filed a return for the assessment year 2017-18 but was identified due to substantial cash deposits during the demonetization period. The Assessing Officer (AO) completed the assessment under section 144, making significant additions to the assessee's income. The CIT(A) dismissed the appeal in limine, citing non-compliance with section 249(4)(b) of the Income Tax Act, which requires payment of advance tax for maintainability of the appeal. The ITAT found that the CIT(A) should have considered the merits of the case despite the non-payment of advance tax, as the assessee was not liable to pay any advance tax due to lack of taxable income.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 23546 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-02-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2017-2018
• Other Referred Cases: Collector, Land Acquisition Vs Mst. Katiji and others, Shamama Reddy Vs. ITO, Vikram Singh Vs. ITO
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ASHISH TRIPATHI
• Keywords: Set aside; Opportunity of being heard
• Section: 144; 142(1); 139

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘A’: NEW DELHI BEFORE SHRI MAHAVIR SINGH, VICE PRESIDENT AND SHRI MANISH AGARWAL, ACCOUNTANT MEMBER ITA No.4255/Del/2024 (ASSESSMENT YEAR - 2017-18) Ashok 72/1, Ground Floor, Yusuf Sarai, Delhi-110016. PAN-BDOPA5083M Vs. CIT(A), Delhi (Appellant) (Respondent) Assessee by None Department by Shri Ashish Tripathi, Sr. DR Date of Hearing 18/02/2025 Date of Pronouncement 18/02/2025 O R D E R PER MANISH AGARWAL, AM: This is an appeal filed by the assessee against the order of the ld. CIT(A), National Faceless Appeal Centre (NFAC), dated 21.12.2023 in Appeal No. CIT (A), Delhi-15/11206/2019 for AY 2017-18. 2. None appeared for the assessee. 3. From the records it is found that the present appeal is delayed by 210 days. Assessee has filed an application for condonation of delay supported by an affidavit on stamp. From the perusal of the application, we observe that the assessee has stated that he is preoccupied in personal legal matters of divorce etc. and could not 2 ITA No.4255 /Del/2024 Ashok vs. CIT(A) look into the income tax matters which caused the delay in filing the appeal. These facts are confirmed in the affidavit filed by the assessee. 4. Ld. DR for Revenue left the matter to the wisdom of Bench. 5. We have considered the explanation advanced by assessee and in absence of any contrary fact or material on record, the assessee is found to have a sufficient cause for delay in filing present appeal. We find that section 253(5) of the Income Tax Act, 1961 (the Act, in short) empowers the ITAT to admit an appeal after expiry of prescribed time, if there is a sufficient cause for not presenting appeal within prescribed time. Hon’ble Supreme Court in Collector, Land Acquisition Vs Mst. Katiji and others reported in 1987 AIR 1353, 1987 2 SCC 387 has held that whenever substantial justice and technical considerations are opposed to each other, the cause of substantial justice must be preferred by adopting a justice-oriented approach. Thus, taking into account the provision of section 253(5) and the decision of Hon’ble Supreme Court, we condone the delay in filing of appeal by 210 days and admit the appeal for adjudication on merits. 6. Now coming to the merits, from the perusal of grounds appeal, it is seen that besides challenging the additions made by AO, assessee challenged the appellate order where the appeal of the assessee is not admitted for non-payment of advance tax though the assessee is not having taxable income. Since the ld. CIT(A) has 3 ITA No.4255 /Del/2024 Ashok vs. CIT(A) dismissed the appeal of the assessee in limine thus we first decide the issue of maintainability of the appeal of the assessee. 7. Brief facts are that the AO had the information that the assessee had deposited Cash of Rs.24,15,000/- in bank during demonetization period. Since no return was filed by assessee for the year under appeal, the assessee was identified as “Non-Filer” and a notice u/s 142(1) of the Act was issued however, no return was filed by the assessee either in compliance to notice u/s 142(1) or within the time permitted u/s 139 of the Act. Assessee neither participated in the assessment proceedings thus the AO has completed the assessment u/s 144 dt. 23-12-2019 by making addition of Rs.2,80,18,186/- towards the deposits both in cash and credit clearing entries appearing in both the bank accounts of the assessee. Aggrieved, the assessee carried matter in first-appeal. The CIT(A) has dismissed the appeal of the assessee in limine for want of payment of advance tax as per the provisions of Section 249(4)(b) of the Act. Against this order of ld. CIT(A), assessee is in appeal before Tribunal. So far as the non-maintainability of assessee’s appeal on account of non-payment of advance tax we find that the ld. CIT(A) invoked the provisions of section 249(4) of the Act which reads as under: “(4) No appeal under this Chapter shall be admitted unless at the time of filing of the appeal, (a) where a return has been filed by the assessee, the assessee has paid the tax due on the income returned by him; or (b) where no return has been filed by the assessee, the assessee has paid an amount equal to the amount of advance tax which was payable by him: Provided that, in a case falling under clause (b) and on an application made by the appellant in this behalf, the Commissioner (Appeals) may, for any good and 4 ITA No.4255 /Del/2024 Ashok vs. CIT(A) sufficient reason to be recorded in writing, exempt him from the operation of the provisions of that clause.” Admittedly, as per section 249(4)(b) of the Act, in a case where no return of income has been filed by the assessee, then his appeal shall be maintainable before the CIT(Appeals) only if he had paid an amount equal to the amount of advance tax which was payable by him. At the same time, the legislature had carved out an exception to the applicability of the aforesaid statutory requirement by way of a “proviso” to Section 249(4) of the Act, as per which, on an application made by the appellant, the CIT(Appeals) may, for any good and sufficient reason to be recorded in writing exempt him from the operation of the aforesaid statutory provision. The statutory requirement contemplated in Clause (b) of sub-section (4) of Section 249 of the Act would stand triggered only where any obligation was cast upon the assessee to pay “advance tax”. As per the statement of facts and grounds of appeal filed by assessee alongwith the appeal memo, it is claimed that assessee is not having total income exceeding the maximum amount not chargeable to tax and thus in absence of any taxable income for the year under consideration, he was not under any obligation to compute and pay any advance tax. In view of these facts, we are of the opinion that the view taken by the CIT(Appeals) while dismissing the appeal of the assessee as not maintainable for the sole reason of non-compliance of the mandatory condition contemplated in Clause (b) of sub-section (4) of Section 240 the Act is not maintainable. This view is supported by the orders of the ITAT, Bengaluru in the case of Shamama Reddy Vs. ITO in ITA 5 ITA No.4255 /Del/2024 Ashok vs. CIT(A) No.1120/Bang/2023 dt. 20.02.2024 and also of the ITAT, Delhi in the case of Vikram Singh Vs. ITO in ITA No.6559/Del/2019, dt. 21.02.2023. 8. Accordingly, in view of above discussion, we set aside the order of the CIT(Appeals) and restore the same to his file with a direction to dispose appeal after considering the merits of the case. Needless to say, the CIT(Appeals) shall in the course of the set-aside proceedings afford a reasonable opportunity of being heard to the assessee. 9. In the result, appeal filed by the assessee is allowed for statistical purposes. Order pronounced in the open Court on 18/02/2025. Sd/- Sd/- (MAHAVIR SINGH) (MANISH AGARWAL) VICE PRESIDENT ACCOUNTANT MEMBER Dated: 18/02/2025 PK/Sr. Ps Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI "