Sumeet Jagdishprasad Pareek , Surat V. Income Tax Officer, Ward-1(2)(6), Surat

ITA 350/SRT/2024

• Counselvise Citation: [2024] 101 COUNSELVISE.COM (IT) 6024 (ITAT-SURAT)
• Duration Of Justice: 3 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-07-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 30-06-2024
• Assessment Year: 2012-2013
• Appeal Filed On: 31-03-2024
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: SURESH K. KABRA
• Keywords: Opportunity of being heard; Competent authority; Set aside
• Section: 147; 148; 144; 133(6); 250; 69A; 13

Judgement Text

IN THE INCOME-TAX APPELLATE TRIBUNAL, SURAT BENCH, SURAT BEFORE SHRI PAWAN SINGH, JUDICIAL MEMBER & SHRI BIJAYANANDA PRUSETH, ACCOUNTANT MEMBER आयकर अपील सं./ITA No.350/SRT/2024 AY: (2012-13) (Physical court hearing) Sumeeet Jagdishprasad Pareek C-42, Chandanvan Society, Nr. South Zone, Udhana, Surat- 394210 Vs. Income Tax Officer Ward-1(2)(6), Surat, Room No.# 303, Income Tax Office, Anavil Business Centre, Pal- Hazira Road, Adajan, Surat- 395009 èथायीलेखासं./जीआइआरसं./PAN/GIR No: AIEPK 8428 J (अपीलाथŎ/Appellant) (ŮȑथŎ /Respondent) िनधाŊįरती की ओर से /Assessee by Shri Suresh K. Kabra, CA राजˢ की ओर से /Revenue by Shri Vinod Kumar, Sr-DR अपील पंजीकरण/Appeals instituted on 01.04.2024 सुनवाई की तारीख/Date of Hearing 01.07.2024 उद्घोषणा की तारीख/Date of Pronouncement 04.07.2024 आदेश / O R D E R PER BIJAYANANDA PRUSETH, AM: This appeal by the assessee emanate from the order passed under section 250 of the Income-tax Act, 1961 (in short, ‘the Act’) by the Learned Commissioner of Income Tax (Appeals)/ National Faceless Appeal Centre, Delhi [in short, ‘CIT(A)’], vide order dated 31.01.2024 for assessment year (AY) 2012- 13. Grounds of appeal raised by the assessee are as under: “1. The Ld CIT(A) has erred and was not just and proper on the facts of the case and in law in not admitting the appeal citing violation of section249(4) of the Act. 2. Prayer 2.1 The addition may kindly be deleted. 2 ITA No. 350/SRT/2024 /AY 12-13 Sumeet J Pareek 2.2 Personal hearing may be granted. 2.3 Any other relief that your honours may deem fit maybe granted. 3. The assessee craves leave to add, amend, modify alter or delete any of the grounds at the time of hearing.” 2. Facts of the case in brief are that assessee had not filed his return of income for AY 2012-13. On the basis of information available in the ITD system and AIR information, it was found that assessee has deposited cash of Rs.10,97,400/- in his bank account maintained with Oriental Bank of Commerce, Surat. In view of the above facts, the case was reopened u/s 147 of the Act after recording the reasons and after obtaining prior approval of the Competent Authority. Notice u/s 148 of the Act was issued on 11.03.2019 but assessee did not file any return of income. Subsequently, AO issued notices u/s 142(1) on 14.08.2019, 24.10.2019 and show cause notice dated 08.11.2019. However, assessee did not respond to these notices. The details of the notices have been given in para-3 of the assessment order. Thereafter AO called for information u/s 133(6) of the Act from Oriental Bank of Commerce, Surat and found that the aggregate amount credited to the account in cash as well as other credit was at Rs.12,47,029/-. Due to non-compliance on the part of assessee, AO invoked provision of Sectino144 of the Act and completed assessment by making addition of Rs.12,47,029/- u/s 69A of the Act. He also added Rs.87,004/- being commission / brokerage received by assessee from Kaushal Prabhudal Sharda (HUF) and Jivrajbhai Dharmshibhai Patel. Accordingly, total income of the assessee was assessed at Rs.13,34,033/- u/s 3 ITA No. 350/SRT/2024 /AY 12-13 Sumeet J Pareek 144 r.w.s. 147 of the Act. Aggrieved by the order of AO, the assessee filed appeal before Ld.CIT(A). The Ld.CIT(A) passed his order u/s 250 of the Act on 31.01.2024. In the order, he has mentioned that a deficiency was pointed out to the assessee on the ground that tax on the returned of income was not paid and particulars of payments are not mentioned. However, there was non- compliance from the assessee. Thereafter, the Ld.CIT(A) has reproduced provision of Section 249(4) of the Act and stated that AO has determined total income at Rs.13,34,033/- and computed the tax payable at Rs.7,27,390/- which includes advance tax payable by appellant as well as interest on account of delayed payment of advance tax. Since appellant has not filed the return of income, provision of Section 249(4)(b) are applicable. However, the appellant had not furnished any documentary evidence that he had paid an amount equal to the amount of advance tax which was payable by him as required u/s 249(4)(b) of the Act. The appellant has also not made any application as per proviso to Section 249(4)(b) of the Act to exempt him from operation of the above provisions. In view of the facts, the Ld.CIT(A) has not admitted the appeal of the assessee and dismissed it for statistical purposes. Aggrieved, the assessee has filed present appeal before the Tribunal. 3. Before us Ld.AR of the assessee submitted that since the income of the assessee was below the taxable limit, the assessee was not required to file income tax return. Hence, question of payment of advance tax does not arise. 4 ITA No. 350/SRT/2024 /AY 12-13 Sumeet J Pareek He has filed computation of total income of assessee. He has also relied on the decisions in following cases:  Prathmika Krushi Pattina Sahakari Sangh Niyamitha vs. ITO [ITA No.850/Bang/2024]  Dineshbhai Vallabhbhai Kabariya vs. ITO [ITA No.179/SRT/2024]  Vishnusharan Chandravanshi vs. ITO [2024] 161 taxmann.com 803 (Raipur –Trib.)  Balwinder Singh vs. ITO [2024] 163 taxmann.com 599 (Amritsar- Trib.) He further stated that AO has passed ex parte order because non-compliance on the part of assessee. The Ld.AR of the assessee has stated that father of assessee died by suicide in January, 2008. The assessee was very young and his father was handling the income tax matter. Since the assessee was ignorant about the financial transaction entered into by his father, it took sometime to recover from the mental shock and with the help of friends, he prepared the books of account for FY 2011-12. As taxable income was below limit, the assessee did not file return of income u/s139(1) of the Act. The AO sent notices to the assessee at the old address but due to non-receipt of the notice assesse could not make compliance of the same. In view of the above, the Ld. AR submits that the appeal may be set aside directing the Ld.CIT(A) not to invoke Section 249(4)(b) of the Act and matter may be sent back to AO for fresh assessment. He promised that assessee would co-operate with AO for early disposal of the assessment order. 5 ITA No. 350/SRT/2024 /AY 12-13 Sumeet J Pareek 4. On the other hand, Ld. Senior Departmental-Representative (Ld.Sr-DR) for the Revenue has strongly relied on the orders of authorities below. He submitted that the explanation given by the assessee cannot be accepted. 5. We have heard both the parties and perused the materials available on record. We have also deliberated on the decisions relied upon by Ld.AR of the assessee. Since the assessee has not filed ROI as well as not paid an amount equal to the advance tax which was payable by it, the appeal was not admitted by the Ld.CIT(A). It may be stated that if tax is being paid for same financial year based on estimated income, it would be advance tax. If tax is being paid after end of financial year, it would be self-assessment tax. When Department finds that there has been under-assessment of income and resultant tax is due, it computes the actual amount that ought to have been paid. This demand raised on the person is called tax on “regular assessment”. Tax on “regular assessment” is the tax which the taxpayer is required to pay against of notice of demand from the Income-tax Department, normally u/s 156 of the Act. The Ld.CIT(A) dismissed appeal of assessee as non-maintainable because the assessee had not paid an amount equal to the advance tax, which was payable by it. The Ld.AR has contended that the assessee did not pay any advance tax as the income was below taxable income as per its books of account. When total income is below taxable income during the year, question of payment of advance tax does not arise and provisions of Section 249(4)(b) of the Act are 6 ITA No. 350/SRT/2024 /AY 12-13 Sumeet J Pareek not applicable. We find that similar issue had come up for consideration before this Bench in ITA No.646/SRT/2023 in the case of Ranajitbhai B Patel vs. ITO dated 28.11.2023, where following the decision of co-ordinate Benches of Pune in the case of Hotel Sai Siddi (P.) Ltd. vs. DCIT (2011) 13 taxmann.com 155 (Pune), it was held that when the assessee had incurred loss while filing ROI and was not liable to pay tax an amount equal to amount of advance tax as required u/s 249(4)(b), the assessee’s appeal was liable to be admitted. Following the ratio of the decision cited above and keeping in view that assessee was claiming that it had no taxable income, the Tribunal restored the case back to the file of Ld.CIT(A) with a direction to admit the appeal of the assessee and pass an order on merit. Facts of the present case of the assessee are similar to the fact of the case cited above. In this case, assessee has shown total income which is below taxable limit. Therefore, he was not liable to pay any advance tax. The demand u/s 156 of the Act was in case of the assessee for regular assessment tax. Therefore, following the above decision, we hold that the Ld.CIT(A) should have decided the issue on merits of the case. Since the AO has completed the assessment u/s 144 of the Act, considering the facts of the case and in the interest of justice, we are remitting the matter back to the file of AO for making fresh assessment order. He shall grant adequate opportunity of being heard to assessee. The assessee is also directed to comply with the notices issued by the AO and not to seek any adjournment without 7 ITA No. 350/SRT/2024 /AY 12-13 Sumeet J Pareek valid reason. For statistical purposes, the appeal of the assessee is treated as allowed. 6. In the result, appeal filed by the assessee is allowed for statistical purposes. Order is pronounced on 04/07/2024 in the open court. Sd/- Sd/- (PAWAN SINGH) (BIJAYANANDA PRUSETH) JUDICIAL MEMBER ACCOUNTANT MEMBER स ू रत /Surat Ǒदनांक/ Date: 04/07/2024 Dkp Outsourcing Sr.PS Copy of the Order forwarded to 1. The Assessee 2. The Respondent 3. The CIT(A) 4. CIT 5. DR/AR, ITAT, Surat 6. Guard File By Order // True Copy // Assistant Registrar/Sr. PS/PS ITAT, Surat