RAJ PAL SINGH SANDHU, KOHAR WALA,KOTKAPURA,FARIDKOT V. THE INCOME TAX OFFICER, WARD-1, FARIDKOT, FARIDKOT

ITA 87/ASR/2024

• Counselvise Citation: [2024] 101 COUNSELVISE.COM (IT) 7051 (ITAT-AMRITSAR)
• Duration Of Justice: 3 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-05-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 30-04-2024
• Assessment Year: 2015-2016
• Appeal Filed On: 22-02-2024
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Gift; Principle of natural justice; Set aside
• Section: 147; 148; 56; 144; 142(1); 250; 207; 208

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH, AMRITSAR. BEFORE DR. M. L. MEENA, ACCOUNTANT MEMBER AND SH. UDAYAN DASGUPTA, JUDICIAL MEMBER I.T.A. No. 87/Asr/2024 Assessment Years: 2015-16 Rajpal Singh Sandhu, Kohar Wala, Kotkapura, Faridkot, Punjab. [PAN:-FSCPS9917R] (Appellant) Vs. Income Tax Officer, Ward-1, Faridkot. (Respondent) Appellant by Sh. Sudhir Sehgal, Adv. Respondent by Sh. Rajiv Wadhera, Date of Hearing 01/05/2024 Date of Pronouncement 28.05.2024 ORDER Per: Udayan Dasgupta, J.M.: This appeal has been filed by the assessee against the order of the Ld Commissioner of Income Tax (Appeals)-NFAC dated 17 th January, 2024, for the Assessment Year 2015-16, which in turn has arisen out of the order of the AO passed u/s 147 rws 144 /144B of the Act, 1961, dated 14/03/2023. 2. The CIT (A) has refused to admit the appeal for hearing, for nonpayment of advance tax as per provisions of section 249(4)(b) of the Act 61. I.T.A. No.87/Asr/2024 Assessment Years: 2015-16 2 3. The grounds of appeal filed by the assessee before the Tribunal are as follows: “1. The denial of admission of appeal filed by the assessee against the order 147 r.w.s. 144 r.w.s. 144B of the Act Dt. 14.03.2023 by the CIT(A) NFAC, vide order u/s 250 of the Act Dt. 17.01.2024, while invoking the provisions of section 249(4)(b) of the Act as the assessee has not paid the amount equal to advance tax without providing proper opportunity of hearing is against the principles of natural justice as laid down by the Hon’ble Apex Court in the case of Rajesh Kumar vs. Deputy Commissioner of Income Tax [2006] 157 Taxmann 168 (SC) & Sahara India (Firm) vs. Commissioner of Income Tax, Central-I [2008] 169 Taxmann 328 (SC). 2. The denial of admission of appeal filed by the assessee against the order 147 r.w.s. 144 r.w.s. 144B of the Act Dt. 14.03.2023 by the CIT(A) NFAC, vide order u/s 250 of the Act Dt. 17.01.2024, while invoking the provisions of section 249(4)(b) of the Act as the assessee has not paid the amount equal to advance tax, without providing proper opportunity of hearing is against the principles of natural justice as the assessee has submitted in writing, in response to the query raised by the CIT(A) during the course of appellate proceedings, the reasons for non-payment of advance tax. I.T.A. No.87/Asr/2024 Assessment Years: 2015-16 3 3. That the appellant craves leave to add or amend the grounds of appeal before the appeal is finally heard or disposed of.” 4. Facts of the case in brief are that, the assessee during the year under appeal derived income from agriculture, and no return has been filed in normal course. Cash has been deposited in bank by the assessee, amounting to Rs. 58,49,000/-, during the year under appeal. In absence of any return on record, notice u/s 148 of the Act 61, issued on 31/03/2022, (as per provisions of law laid down under new regime). Subsequent notices u/s 142(1) of the Act 61, also remained unanswered. However, the assessee filed written submission to the final SCN dated 25/01/2023 along with documentary evidence on 30/01/2023, as under: “With due respect it is here by submitted that the said Sh. Rajpal Singh Sandhu is an agriculturist and has no knowledge of Accounts and Income Tax Law. The reply as per your questionnaire is an under: - 1. The copy of bank statement of the period under assessment is here by uploaded. He having 4 accounts only. 2. The detail of cash deposited is from agriculture receipts and a gift of Rs. l2,00,000/-(twelve lakh) from his real aunt, they had sold a part of their agricultural land and given Rs.12,00,000/- out of that to her nephew Rajpal Singh. The copy of sale deed along with self-declaration of their family I.T.A. No.87/Asr/2024 Assessment Years: 2015-16 4 (who gifted the said amount) is here by uploaded. I had 15 Acres of Land the copies of Some J-forms are also uploaded. 3. Sir the cash flow statement is here by uploaded. 4. Sir I am an agriculture and having no other source except the milk selling from the cows we have in our house. No books are required as no Taxable Income.” 5. Apart from the above the assessee has also filed J forms attested by local market committee, confirmation from commission agent regarding sales of wheat, affidavit for confirmation of gift from relative (aunt), copies of sale deed of agricultural land, claimed to be the source of the above gift (all recorded in the assessment order para 9.4 and 9.5, page 11 of order). However, the AO completed the assessment on a total income of Rs. 34,55,000/-, against which the appeal was filed before the first appellate authority. 6. The issue before the CIT (A) was that the memorandum of appeal (filed in Form 35, clause no 9), was incorrectly filed, because in the instant case, the assessee, has neither paid any advance tax as per provisions of Chapter XVII of the Act 61, nor has he filed any return of income for the year under appeal, and as such the admission of the appeal is hit by the provisions of section 249(4)(b) of the Act 61. I.T.A. No.87/Asr/2024 Assessment Years: 2015-16 5 6.1 In response to the deficiency letter issued by the CIT(A) dated 03/01/2024, the appellant filed a short reply, which is reproduced as under: “1. That the assessee, Sh. Raj Pal Singh Sandhu, is purely an agriculturist having no taxable income in F.Y. 2014-15 relevant to A.Y. 2015-16 and was not liable to file any return of income. 2. That since the assessee was not required to file any return of income, no taxes were paid”. 6.2 It is also stated by the CIT(A), that the assessee has not made any application as per proviso to section 249(4)(b) of the Act 61, along with the memorandum of appeal in Form 35, praying for exemption from operation of the said provision of that clause. As such, the CIT(A), dismissed the appeal for statistical purpose as not admitted. 7. In course of hearing of the appeal the Ld AR, argued that in the instant case, the assessee being an agriculturist, has agricultural income during the year amounting to Rs. 14.50 lakhs, the documentary evidence of which has already been submitted before the AO in course of assessment proceeding as narrated by the AO in the assessment order and apart from agricultural income, the assessee has also received gift of Rs. 12 lakhs, from his relative, and evidence of gift deed is also on record, and both together has formed the source of bank deposits. I.T.A. No.87/Asr/2024 Assessment Years: 2015-16 6 7.1 The AR, also filed a computation of taxable income for the year ended 31/03/2015, disclosing taxable income at NIL. He further argued that this being the case, the assessee never had any taxable income during the year and had no liability to pay advance tax, as per provisions of section 210 of the Act 61, (which is expected to be paid by the assessee of his own accord), and as per computation of advance tax u/s 209, the advance tax payable is NIL. In other words, as per the assessee own computation, the advance tax payable is NIL as per provisions of section 249(4)(b) of the Act 61, and correspondingly, his admitted tax liability, for the purpose of Form 35 is also NIL, and that is the reason, why the assessee has stated “NOT APPLICABLE” against column - 9 of Form 35. 7.2 He further argued that , the proviso to section 249(4)(b) of the Act 61, applies in a case where advance tax ( or admitted tax ) liability exists as per section 210 , by the appellants own calculation u/s 209, and the appellant is prevented by some reasons from making payment thereof, then in such cases the appellant is allowed a window to make an application of waiver quoting good and sufficient reasons before the first appellate authority, to exempt him from the operation of the provision of that clause. I.T.A. No.87/Asr/2024 Assessment Years: 2015-16 7 In other words, in the instant case since the amount of advance tax payable by the assessee was NIL as per clause (b) of sub sec (4) of Sec 249, as per assessee own computation the proviso to the said clause (b) itself is not triggered in this case. 7.3 The AR in support of his arguments relied upon the decision of the ITAT , Raipur Bench in ITA No: 73/ RPR/ 2024, in the case of Vishnusharan Chandravanshi vs ITO , 161 taxman.com 803 ( Raipur ), and prayed that the appeal before the first appellate authority is legally valid and should not be rejected for nonpayment of advance tax because in the instant case no advance tax is actually payable because the assessee has no taxable income and the appeal should be admitted to be decided on merits. 8. The ld. DR, relied on the order of the CIT (A) and argued that the appeal before the CIT (A) is not maintainable, for nonpayment of advance tax and is hit by the provisions of section 249(4) (b) of the Act 61. 9. We have heard the submissions of the rival counsels, and considered the materials on record. The documentary evidences filed by the assessee, of course, needs further verification and scrutiny, and we are not expressing any opinion on the same because we are not adjudicating on the merits of the case and our opinion are only restricted to the applicability of section 249(4)(b) of the Act 61. 9.1 We find that the assessee has taken a stance from the very first stage itself , before the AO that he has no taxable income for the year under appeal and his I.T.A. No.87/Asr/2024 Assessment Years: 2015-16 8 income is only agricultural income which is exempted income under the Act 61 and the gift received from relative ( within the meaning of explanation (e) of clause (vii) of sec 56 of the Act ) is also nontaxable, and has filed documentary evidence of the same before the AO , as evident from the assessment order, and in the computation of income filed by the assessee before the Tribunal , he has declared NIL taxable income , thereby indicating that he is not liable to pay any advance tax as per provisions of section 207 of the Act 61 because he has no total income which would be chargeable to tax and computation of advance tax , as per sec 209 of the Act is NIL, and according to the assessee the payment of advance tax u/s 210 of the Act , of his own accord , does not arise in this case. We also note that the assessee has filed a reply before the first appellate authority to the deficiency letter, dated 03/01/2024, stating that he has no taxable income. 9.2 As such, considering all materials on record, we are of the opinion, that the assessee has presented a prima facie case, of no obligation, to make payment of advance tax u/s 208 of the Act 61, for the year under appeal, and we hold that the CIT(A) should have admitted the appeal for adjudication on merits, and the amount of advance tax payable by the assessee, for the purpose of presenting the appeal, as per provisions of section 249(4)(b), should be taken as NIL. 10. Accordingly, we set aside the order of the CIT(A) and restore the same to his file for adjudication on merits, after causing all necessary verification of all I.T.A. No.87/Asr/2024 Assessment Years: 2015-16 9 documentary evidences he deems fit and proper, as per procedure of law, (un influenced by any observation we might have made in the above paragraphs), and after allowing proper opportunity to the assessee of being heard. 11. In the result, all the appeals of the assessee bearing ITA No. 87/Asr/2024, is allowed for statistical purposes. Order pronounced in the open court on 28.05.2024 Sd/- Sd/- (Dr. M. L. Meena) (UDAYAN DASGUPTA) Accountant Member Judicial Member AKV Copy of the order forwarded to: (1)The Appellant (2) The Respondent (3) The CIT (4) The CIT (Appeals) (5) The DR, I.T.A.T. True Copy By order