GOLI PICHAIAH,GUNTUR V. .INCOME TAX OFFICER, WARD-2(3), GUNTUR

ITA 443/VIZ/2024

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The case involves Goli Pichaiah, the appellant, who challenged an order by the CIT(A) dismissing his appeal for non-compliance with section 249(4)(b) of the Income Tax Act, 1961. The original addition of Rs. 20,00,000 as 'Unexplained Money' was made by the Assessing Officer during the demonetization period, alleging it was a deposit in the appellant's bank account. The appellant argued that he had no taxable income during the relevant period, and thus, the provisions of section 249(4)(b) should not apply, citing a similar case (Sree Sai Sameera Pharmacy v. ITO). The Department distinguished this case by noting that the assessee in that case had filed a return showing taxable income as NIL and had produced a Profit and Loss Account to substantiate the claim. The Tribunal, referencing the decision in Sree Sai Sameera Pharmacy, agreed that if there was no taxable income, the question of advance tax does not arise, and thus section 249(4)(b) would not be applicable.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 46546 (ITAT-VISAKHAPATNAM)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-12-2024
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2017-2018
• Other Referred Cases: Sree Sai Sameera Pharmacy v. ITO, Ward-1(1), Vijayawada
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Section: 69A

Judgement Text

"आयकर अपीलीय अधिकरण, धिशाखापटणम पीठ, धिशाखापटणम IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM “SMC” BENCH, VISAKHAPATNAM न्यायमूर्ति (सेवा र्िवृत्त) सी.वी. भडंग, माििीय अध्यक्ष एिं श्री एस बालाक ृष्णन, लेखा सदस्य क े समक्ष BEFORE JUSTICE (RETD.) C.V. BHADANG, HON’BLE PRESIDENT & SHRI S BALAKRISHNAN, HON’BLE ACCOUNTANT MEMBER आयकर अपीलसं./I.T.A.No.443/VIZ/2024 (निर्धारण वर्ा/ Assessment Year: 2017-18) Goli Pichaiah D.No. 11-9-45/30 Plot No. 17, Bhagat Singh Nagar Mangalagiri, Guntur – 522008 Andhra Pradesh [PAN: BBDPG9796C] v. ITO – Ward – 2(3) Income Tax office C.R. Buildings, Kannavarithota Guntur – 522004 Andhra Pradesh (अपीलार्थी/ Appellant) (प्रत्यर्थी/ Respondent) करदाता का प्रतततितित्व/ Assessee Represented by : Shri GVN Hari, AR राजस्व का प्रतततितित्व/ Department Represented by : Dr. Aparna Villuri, Sr.AR सुिवाई समाप्त होिे की ततति/ Date of Conclusion of Hearing : 20.12.2024 घोर्णध की तधरीख/Date of Pronouncement : 20.12.2024 आदेश /O R D E R PER JUSTICE (RETD.) C.V. BHADANG, PRESIDENT 1. By this appeal the Appellant–Assessee is challenging the order dated 25.09.2024 passed by the Ld.CIT(A)/NFAC, Delhi thereby dismissing the appeal, for non-compliance with the provisions of section 249(4)(b) of the Income Tax Act, 1961 (“Act” for short). The appeal relates to A.Y. 2017-18. 2. The brief facts are that, the Assessing Officer (“AO” for short) vide order dated 07.12.2019 had made an addition of Rs. 20,00,000/- under section 69A of I.T.A.No.443/VIZ/2024 Goli Pichaiah Page No. 2 the said Act as “Unexplained Money” which was the deposit allegedly made by the Appellant in his bank account, during the demonetization period. The Appellant is a non-filer for the relevant assessment year. The Appellant challenged the said order of the AO before the Ld.CIT(A). The Ld.CIT(A) has noticed that the appeal could not be admitted unless there is a compliance of section 249(4)(b) of the Act as the Appellant having failed to deposit the advance tax which was payable on the assessed income. 3. We have heard the Ld. AR for the Appellant and Ld.DR for the respondent, with their assistance we have gone through the record. 4. It is submitted by the Ld.AR that the Appellant had no income during the relevant period and as such the provisions of section 249(4)(b) of the Act cannot be called into aid. Reliance in this regard is placed on the decision of the Coordinate Bench of this Tribunal in ITA No. 103/VIZ/2024 decided on 10.09.2024 (Sree Sai Sameera Pharmacy v. ITO, Ward-1(1), Vijayawada). It is submitted that in similar circumstances this Tribunal has found that the provisions of section 249(4)(b) of the Act would not be applicable. 5. Ld. Sr. AR on behalf of the Revenue, submitted that the decision in Sree Sai Sameera Pharmacy v. ITO (supra) is distinguishable on the facts in as-much-as in that case, subsequently the assessee had filed the return of income showing taxable income as NIL and had also produced the Profit and Loss Account in order to ascertain that there was no taxable income. I.T.A.No.443/VIZ/2024 Goli Pichaiah Page No. 3 6. We have considered the submissions made. Section 249(4)(b) of the Act, read as under: - “S.249(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 Joint Commissioner (Appeals) or the Commissioner (Appeals) may, for any good and sufficient reason to be recorded in writing, exempt him from the operation of the provisions of that clause.” 7. It can thus be seen that Clause (b) of sub-section 4 of section 249 of the Act would apply where no return has been filed by the assessee. However, at the same time the payment of advance tax would also always be subject to there being a taxable income which according to the assessee he had not earned any taxable income. It is true that in the case of Sree Sai Sameera Pharmacy v. ITO (supra) subsequently the return was filed. However, what essentially Coordinate Bench has held that when the assessee had no taxable income, the question of being the advance tax does not arise and in such case the provisions of section 249(4)(b) of the Act would not be applicable. In the given circumstances, it would be appropriate if the Ld.CIT(A) decides the appeal on its own merits and in accordance with law. The appeal is therefore partly allowed, the impugned order is set-aside. The appeal is restored back to the file of the Ld.CIT(A) for disposal according to law and on merits of the challenged I.T.A.No.443/VIZ/2024 Goli Pichaiah Page No. 4 impugned addition made under section 69A of the Act by providing one more opportunity to the assessee. The assessee shall cooperate for appropriate disposal of the appeal. The Appeal is disposed off in the aforesaid terms. 8. In the result, appeal of the assessee is partly allowed in the aforesaid terms. Order pronounced in the open court on 20th December, 2024. Sd/- (एस बालाक ृष्णन) (S. BALAKRISHNAN) लेखा सदस्य/ACCOUNTANT MEMBER Sd/- (न्यायमूर्ति (सेवार्िवृत्त) सी.वी. भडंग) (JUSTICE (RETD.) C.V. BHADANG) अध्यक्ष /PRESIDENT Dated: 20.12.2024 Giridhar, Sr.PS आदेशकीप्रनतनलनपअग्रेनर्त/ Copy of the order forwarded to:- 1. निर्धाररती/ The Assessee : Goli Pichaiah D.No. 11-9-45/30 Plot No. 17, Bhagat Singh Nagar Mangalagiri, Guntur – 522008 Andhra Pradesh 2. रधजस्व/ The Revenue : ITO – Ward – 2(3) Income Tax office C.R. Buildings, Kannavarithota Guntur – 522004 Andhra Pradesh 3. The Principal Commissioner of Income Tax 4. नवभधगीयप्रनतनिनर्, आयकरअपीलीयअनर्करण, नवशधखधपटणम /DR,ITAT, Visakhapatnam 5. The Commissioner of Income Tax 6. गधर्ाफ़धईल / Guard file //True Copy// आदेशधिुसधर / BY ORDER Sr. Private Secretary ITAT, Visakhapatnam "