HARSH PATEL, GRAM PADLIYA TEHSIL DEPALPURDI V. ITO, Ward-1(2), Indore, Indore

ITA 171/Ind/2024

• Counselvise Citation: [2024] 101 COUNSELVISE.COM (IT) 6205 (ITAT-INDORE)
• Duration Of Justice: 4 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-06-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 26-06-2024
• Assessment Year: 2017-2018
• Appeal Filed On: 26-02-2024
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: AVINASH MANDOVARA
• Keywords: Opportunity of being heard; Rule of consistency
• Section: 147; 144; 139; 142(1); 208

Judgement Text

आयकर अपील य अ धकरण, इंदौर यायपीठ, इंदौर IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI VIJAY PAL RAO, JUDICIAL MEMBER AND SHRI B.M. BIYANI, ACCOUNTANT MEMBER ITA No.171/Ind/2024 (Assessment Year: 2017-18) Harsh Patel Gram -Padliya Tehsil- Depalpur Indore Vs. ITO -1(1) Indore (Appellant / Assessee) (Respondent/ Revenue) PAN: BMFPP8078K Assessee by Shri Avinash Mandovara, AR Revenue by Shri Ashish Porwal, Sr. DR Date of Hearing 27.06.2024 Date of Pronouncement 28 .06.2024 O R D E R Per Vijay Pal Rao, JM : This appeal by assessee is directed against the order dated 12.01.2024 of the Commissioner of Income Tax (Appeal), National Faceless Appeal Centre, Delhi for A.Y.2017-18. The assesse has raised following grounds of appeal: “1 That the learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi has grossly erred in not admitting the appeal. 2 That order of non-admission of the appeal is unjust, arbitrary and unlawful and be quashed.” ITANo.171/Ind/2024 Harsh Patel Page 2 of 7 2. We have heard Ld. AR as well as Ld. DR and careful perused order of the AO as well as impugned order of the CIT(A). The CIT(A) has dismissed the appeal of the assesse as not maintainable for want of payment of advance tax u/s 249(4)(b) of the Act in para 3 of the impugned order as under: “3. Decision: As per the provisions of the section 249(4)(b) of the Act, the appeal shall not be admitted, unless the appellant has paid an amount equal to the amount of advance tax which was payable by him if no return of income has been filed. In the present case, the appellant did not file return of income. The AO determined total income of Rs. 13,34,450/- and tax liability of Rs. 16,49,343/- which included the advance tax payable by the appellant. On or before filing the present appeal, the appellant has failed to make the required payment of the amount equal to the amount of advance tax which was payable by him. Further, the appellant neither provided any satisfactory clarification/ explanation in response to the deficiency letter issued by this office nor did he offer any reason, leave alone any good and sufficient reasons, for seeking exemption from the operation of the sec. 249(4)(b) even though sufficient opportunities were provided to him. On careful consideration of the above facts and circumstances, as the appellant has failed to fulfill the necessary conditions for admission of appeal before CIT(A) as per sec. 249(4)(b), the present appeal is liable to be held as not eligible for admission and hence, the appeal is not admitted. In the result, the appeal is treated as dismissed for statistical purposes.” 2.1 Thus, it is a case of non-filing of return of income by the assesse and the AO has framed the assessment u/s 144 of the Act ITANo.171/Ind/2024 Harsh Patel Page 3 of 7 whereby an addition of Rs.13,34,450/- was made on account of unexplained cash deposit in the bank account of the assesse. Before the CIT(A) the assesse has submitted that the income for A.Y.2017-18 is far below the minimum taxable limit hence, no income tax return was filed and as such no tax was either payable or paid by the assesse. In view of the fact that the assesse did not file any return of income and stated that his income for the year under consideration is below the minimum taxable limit therefore, the question of filing the advance tax does not arise. An identical issue has been considered by this Tribunal in case of case of Shri Pushpendra Singh Chouhan vs. ITO in ITANo.122/Ind/2024 vide order dated 24.06.2024 in para 7 & 8 as under: “7. We have considered the rival submissions as well as relevant material on record. The Assessing Officer initiated proceedings u/s 147 on the basis of the AR information regarding the cash deposit of Rs.36,03,600/- in the savings bank account of the assessee. Since there was no response on behalf of the assessee to the notices issued by the Assessing Officer, therefore, the assessment was framed ex-parte as best judgment assessment thereby the Assessing Officer has assessed total income of the assessee at Rs.36,03,600/-. The assessee has explained the reasons for non appearance before the Assessing Officer as the assessee belongs to a rural area and having no computer or internet facility in the village and therefore, the assessee was not having access to the notice issued by the Assessing Officer and consequently could not furnish any reply or submissions as well as evidence during the assessment proceedings. Further the CIT(A) has dismissed the appeal of the assessee in limine for want of payment of tax as per the provisions of Section 249(4)(b) of the Act. This is a case of reassessment framed by Assessing Officer u/s 147 r.w.s. 144 of the ACT and therefore, there is no obligation of payment ITANo.171/Ind/2024 Harsh Patel Page 4 of 7 of advance tax as per Clause(b) of Section 249(4) as held by the Mumbai Benches of the Tribunal in case of M/s. Nine Globe Industries Pvt. Ltd Vs. ACIT (supra) in para 4 to 6 as under: “4. In that view of the matter, the appeal came to be dismissed on the ground that the appellant has not filed Rol as well as not paid an amount equal to the amount of advance tax, which was payable by it. It can thus be seen that the CIT(A) had no occasion to examine the merits of the impugned additions. 5. We have heard parties. Perused record. It can be seen that the case was Initially selected for scrutiny, which was completed on 29.03.2015, and there was no change in the returned income of Rs.51.80.800/- in the absence of any additions being made. It is a matter of record that originally the return was filed for the relevant year under consideration on 29.09.2012. It was not disputed during the course of hearing that the advance tax has per the assessed income of Rs. 51,80,800/- has been paid. Here is the case of reassessment which is done for the benefit of Revenue. Hence, in our view, clause (b) of Section 249(4) of the Act will not apply as there is no question of paying advance tax in reassessment proceedings, even though assessee did not file Rol. 6. In the said circumstances, we find that the impugned order dismissing the appeal on the ground of non-compliance of Section 249(4) of the Act cannot be sustained and deserves to be set-aside”. In the case in hand the assessee has filed return of income and thereafter, the Assessing Officer has initiated reassessment proceedings and passed reassessment order. Therefore, for filing the appeal before CIT(A) the question of payment of advance tax by the assessee as per clause(b) of Sub Section 4 of Section 249 does not arise. Similarly the Raipur Bench of the Tribunal in case of Vishnusharan Chandravanshi Vs. ITO in ITA No.73/RPR/2024 order dated 10.04.2024 has also considered the identical issue in para No.10 to 15 as under: 10. Admittedly, it is a matter of fact borne from record that the assessee had neither filed his return of income u/s 139 of the Act nor in compliance to notice issued to him u/s. 142(1) of the Act, dated 10.03.2018. As the assessee had failed to file his return of income, the CIT(Appeals) had brought his case within the meaning of Clause (b) of sub-section (4) of Section 249 of the Act. For the sake of clarity, Section 249(4) of the Act is culled out as under: ITANo.171/Ind/2024 Harsh Patel Page 5 of 7 "(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 sufficient reason to be recorded in writing, exempt him from the operation of the provisions of that clause." The CIT(Appeals) observed that as the assessee who had not filed his return of income had neither paid an amount equal to the amount of advance tax which was payable by him; nor filed any application seeking exemption from operation of the aforesaid statutory provision for any good and sufficient reason, therefore, he had failed to comply with the statutory requirements contemplated u/s 249(4)(b) of the Act. Accordingly, the CIT(Appeals) dismissed the appeal on the said count itself. 11. Controversy involved in the present appeal lies in a narrow compass, i.e. sustainability of the view taken by the CIT(Appeals) that the appeal of the assessee who had not filed his return of income for the subject year was not maintainable for the reason that he had failed to satisfy the conditions contemplated in Section 249(4) of the Act. 12. 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. 13. At this stage, I may herein observe that 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 stated by the Ld. AR, and rightly so, in absence of any taxable income for the year under consideration [as was stated by him in the "SOF" filed before the CIT(Appeals)] no obligation was cast upon him to compute and pay any advance tax u/ss. 208 & 209 of the Act. Considering the fact that as no obligation was cast upon the ITANo.171/Ind/2024 Harsh Patel Page 6 of 7 assessee to compute/deposit any amount towards "advance tax' for the subject year, I am unable to concur with the view taken by the CIT(Appeals) who dismissed the appeal as not maintainable for the reason of non-compliance off mandatory condition contemplated in Clause (b) of sub-section (4) of Section 240 the Act. Although, at the first blush, I was of the view that the amount assesse the A.O vide his order u/s. 144 of the Act dated 23.11.2019 of Rs. 10 lacs would saddle the assessee with an obligation to pay "advance tax", but stood corrected a careful perusal of Section 208 and Section 209(1)(a) of the Act, which contemplates determination of the said tax liability at the behest of the assessee. 14. As in the present case, the assessee had not only before me but had in the "Statement of facts" stated before the CIT(Appeals) that he had no taxa income, therefore, in my view in absence of any obligation cast upon the ass to compute/pay "advance tax" u/ss. 208 and 209 of the Act for the subject year first appellate authority could not have held that he had failed to comply with statutory conditions contemplated in Sec. 249(4)(b) of the Act. My aforesaid we fortified by the orders of the ITAT, Bengaluru in the case of Shamama Reddy Vs. ITO, ITA No.1120/Bang/2023 dated 20.02.2024 and that of ITAT, Deih in the of Vikram Singh Vs. ITO, ITA No.6559/Del/2019, dated 21.02.2023 15. I, thus, in terms of my aforesaid observations, 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. Needles to say, the CIT( Appeals) shall in the course of the set-aside proceedings afford a reasonable opportunity of being heard to the assessee.” 8. Accordingly, to maintain the rule of consistency we follow the earlier decisions of the Tribunal cited above and consequently the impugned order of CIT(A) is set aside being contrary to the provisions of law. 2.2 Thus, the Tribunal has held that for filing the appeal before the CIT(A) against the reassessment order passed by the AO the question for payment of advance tax by the assessee as per clause (b) of sub-section (4) of section 249 of the Act does not arise. Accordingly this issue is now covered by the earlier decisions of this tribunal and consequently the impugned order of the CIT(A) is set aside being contrary to the provisions of law. Since the assessment order was also passed ex-parte due to non-appearance as well as ITANo.171/Ind/2024 Harsh Patel Page 7 of 7 non filing of return of income on behalf of the assesse therefore, in the facts and circumstances of the case and in the interest of justice the matter is remanded to the record of the jurisdictional AO for fresh adjudication after considering relevant details/evidences as well as explanation of the assesse. Needless to say the assessee be given an appropriate opportunity of hearing before passing fresh order 3. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open court on 28.06.2024. Sd/- Sd/- (B.M. BIYANI) (VIJAY PAL RAO) Accountant Member Judicial Member Indore,_ 28 .06.2024 Patel/Sr. PS Copies to: (1) The appellant (2) The respondent (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File By order UE COPY Sr. Private Secretary Income Tax Appellate Tribunal Indore Bench, Indore