PRIYANKA MANDADI,HYDERABAD. V. INCOME TAX OFFICE, WARD-9(1), HYDERABAD

ITA 1184/HYD/2024

AI Insights

The case involves Ms. Priyanka Mandadi, who appealed against the order of the CIT (A) which had dismissed her appeal as non-admissible due to non-payment of advance tax as required under section 249(4)(b) of the Income Tax Act, 1961. The primary contention was that the assessee had not filed any return of income for the assessment year 2017-18, nor had she any taxable income, yet the Assessing Officer had reopened her assessment based on substantial cash deposits in her bank account. The Tribunal noted that the CIT (A) had dismissed the appeal without considering the circumstances under which the cash deposits were made, specifically that they were related to transactions from bank auctions of old cars, which resulted in losses.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 26877 (ITAT-HYDERABAD)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-01-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB-A
• Assessment Year: 2017-2018
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: K.S.SAI PRASAD
• Keywords: Set aside; Opportunity of being heard
• Section: 147; 148; 144; 142(1); 271B; 9(1); 9(1); 9(1)

Judgement Text

" ITA No 1184 of 2024 Priyanka Mandadi Page 1 of 6 आयकर अपीलȣय अͬधकरण, हैदराबाद पीठ IN THE INCOME TAX APPELLATE TRIBUNAL Hyderabad ‘ A ‘ Bench, Hyderabad Before Shri Vijay Pal Rao, Vice-President A N D Shri Manjunatha, G. Accountant Member आ.अपी.सं /ITA No.1184/Hyd/2024 (िनधाŊरण वषŊ/Assessment Year: 2017-18) Ms. Priyanka Mandadi Hyderabad PAN:CSWPM1029D Vs. Income Tax Officer Ward 9(1) Hyderabad (Appellant) (Respondent) िनधाŊįरती Ȫारा/Assessee by: Shri, K.S. Sai Prasad, CA राज̾ व Ȫारा/Revenue by:: Shri Srinath Sadanala, DR सुनवाई की तारीख/Date of hearing: 08/01/2025 घोषणा की तारीख/Pronouncement: 09/01/2025 आदेश/ORDER Per Vijay Pal Rao, Vice President. This appeal by the assessee is directed against the order dated, 19/09/2024 of the learned CIT (A)-NFAC Delhi, relating to A.Y.2017-18. 2. The assessee has raised the following grounds: ITA No 1184 of 2024 Priyanka Mandadi Page 2 of 6 3. At the time of hearing, the learned AR of the assessee has submitted that, the learned CIT (A) has dismissed the appeal of the assessee as non-admissible for want of advance tax payment u/s 249(4)(b) of the I.T. Act, 1961. He has pointed out that, the assessee has not filed any return of income for the year under consideration, as there was no income assessable to tax. The Assessing Officer has reopened the assessment by issuing notice u/s 148 of the Act, on the basis of the information that, during the year under consideration, the assessee has made cash deposits of more than Rs.1.00 crore in her bank account. The ITA No 1184 of 2024 Priyanka Mandadi Page 3 of 6 learned AR has submitted that, the assessee has purchased the old cars in the bank auctions, which were subsequently sold and incurred loss in those transactions and therefore, there was no taxable income for the year under consideration. The notice issued by the Assessing Officer were sent to the email registered with the ITBA Portal and did not come to the knowledge of the assessee, therefore, there was no response to the notices issued by the Assessing Officer. He has further submitted that the learned CIT (A) has issued a notice, dated 11/09/2024 allowing the assessee to furnish written submission on or before 18/09/2024. In response to the said notice, the assessee has filed the reply, vide letter dated 16/09/2024 and requested some more time. However, the learned CIT (A) has passed the impugned order, dated 19/09/2024 without considering the request of the assessee as well as other record filed by the assessee before the learned CIT (A). The learned AR has submitted that the dismissal of the appeal of the assessee on the ground of non-payment of advance tax is not sustainable, when there was no return of income filed by the assessee, nor any taxable income was earned by the assessee during the year. Thus, he has pleaded that, the impugned order of the learned CIT (A) may be set aside and the matter may be remanded to the record of the Assessing Officer for fresh adjudication after considering the relevant details and evidences to be filed by the assessee. 4. On the other hand, the learned DR has submitted that, despite repeated notices issued by the Assessing Officer as ITA No 1184 of 2024 Priyanka Mandadi Page 4 of 6 well as the learned CIT (A), the assessee did not respond and file the relevant details. Therefore, it is a case of gross negligence on the part of the assessee, of non-compliance of the notices issued by the authorities below. He has relied upon the orders of the authorities below. 5. We have considered the rival submissions as well as the relevant material available on record. The Assessing Officer has noted that, the assessee has not filed any return of income. However, as per the information, the assessee has made cash deposits of Rs.1,07,37,700/- in her bank account during the year under consideration and accordingly, notice u/s 148 of the Act was issued on 31/03/2021. In response to the statutory notices issued by the Assessing Officer u/s 142(1) and 148 of the I.T. Act, 1961, there was no compliance on behalf of the assessee. Even no return of income was filed by the assessee. The assessment was then completed u/s 147 r.w.s. 144 of the I.T. Act, 1961 on 9/3/2022 whereby the Assessing Officer has assessed the total income at Rs.1,07,37,700/- by taking the entire cash deposits in the bank account as income of the assessee. The assessee challenged the action of the Assessing Officer before the learned CIT (A). However, the appeal of the assessee was dismissed in limine by the learned CIT (A) vide his order in para 4.2 and 4.3 as under: “4.2 Facts of the Case: In this case, it is noted that the appellant has not filed any return of income and has not paid any form of tax. This fact was brought to the notice of appellant vide a notice dated 11.09.2024 and she was asked to comment on the specific requirement of Section 249(4)(b). The appellant did not file any submission with respect to it. ITA No 1184 of 2024 Priyanka Mandadi Page 5 of 6 As per the provisions of Section 249(4)(b), the appellant is required to pay the tax due on the income returned before the appeal can be admitted. On examination of the records and submissions made, it is observed that the appellant has failed to file the return of Income. Appellant has failed to pay an amount equal to the amount of advance tax that was payable by him. The appellant has not furnished any substantial cause or valid reason for the non-compliance with the mandatory requirement under Section 249(4)(b). Further, it is noted that the A.O in his assessment order has also initiated penalty proceedings u/s. 271F and 271B of the Act against the appellant. 4.3 In view of the aforementioned facts and provisions, and considering the mandatory nature of the requirement under Section 249(4)(b) of the Income Tax Act, 1961, the appeal filed by the appellant, is hereby dismissed as non- admissible.” 6. The learned CIT (A) was of the view that, the assessee has not furnished any substantial cause or filed reasons, for non- compliance of the mandatory requirements u/s 249(4)(b) of the I.T. Act, 1961. It is pertinent to note that, the requirement of payment of advance tax, as per section 249(4)(b) of the Act for filing appeal before the learned CIT (A) is mandatory, only when there is a liability on the assessee for payment of advance tax. In the case in hand, the Assessing Officer has assessed the income of the assessee on account of deposits of cash in the bank account for which the assessee has explained that the said cash was deposited for participation in the auction conducted by the Bank for sale of old cars, which were subsequently sold by the assessee resulting loss. Without considering the fact that, the deposit of cash in the Bank Account does not ipso facto fasten the liability of advance tax payment on the assessee, the learned CIT (A) has dismissed the appeal of the assessee in limine. ITA No 1184 of 2024 Priyanka Mandadi Page 6 of 6 Accordingly, in the facts and circumstances of the case, the impugned order of the learned CIT (A) is set aside and the matter is remanded to the record of the Assessing Officer for fresh adjudication after considering the relevant details as well as evidences to be filed by the assessee in support of her claim. Needless to say, the assessee shall be given a reasonable opportunity of being heard, before passing the fresh order. 7. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the Open Court on 9th January, 2025. Sd/- Sd/- (MANJUNATHA, G) ACCOUNTANT MEMBER (VIJAY PAL RAO) VICE-PRESIDENT Hyderabad, dated 9th January, 2025 Vinodan/sps Copy to: S.No Addresses 1 Smt. Priyanka Mandadi, c/o Katrapati & Associates, 1-1-298/2/B/3 Sowbhagya Avenue Apts, 1st Floor, Ashoknagar, Street No.1 Secunderabad 500020& 2 Income Tax Officer, Ward 9(1) IT Towers, Masab Tank, Hyderabad 3 Pr. CIT – Hyderabad 4 DR, ITAT Hyderabad Benches 5 Guard File By Order "