ABHISHEK RAI,VIDISHA vs. ITO, VIDISHA

Learned Counsel for the assessee, at the outset, argued that order passed by the Ld. CIT(A) is an ex-parte order, as the assessee could not file the relevant documents and details before the Ld. CIT(A). The Ld. CIT(A) dismissed the appeal of the assessee on the grounds that assessee has not paid the advance tax. The findings of the Ld. CIT(A) is reproduced below: In Form-35, the appellant has offered 'Not applicable' comments at sl. No. 9 of Form-35 whereas it was supposed to make payment of tax equal to the amount of advance tax payable on its income which in the present case is the income assessed by the AO as no ITR was filed by it. It is, therefore, clear that information, given at sl. no. 9 of Form-35 is not correct and the appellant has not made payment of amount equal to the advance tax which was due on its income. A plain reading of provisions of section 249(4)(b) of the Act makes it clear that the appellants are required to pay an amount equal to the advance tax which was due on their income irrespective of the situation whether the addition(s) was/were disputed in appeal or not. The statute has differentiated between the assessee who filed ITR and paid taxes on admitted income and the assessee who though failed to ITR but have paid an amount equal to the advance tax which was due on their income. In the former situation, provisions of section 249(4)(b) of the Act are not applicable and those assesses are in advantageous position. In the latter situation, since the assessees had failed to file ITR, the amount of tax equal to the advance tax which was due on their income would mean the income assessed by the AO. Those assessees cannot claim later on that they are not liable to pay an amount of tax equal to the advance tax which was due on their income as they are challenging the additions in appeal and that their income was below taxable limit. The appellant has also not requested for exemption from operation of the provisions of clause (b) of sub-section (4) of section 249 of the Act.

On the other hand, the Ld. DR for the Revenue did not raise any objection if the matter is restored back to the file of the Ld. CIT(A) for fresh adjudication on merit.

We have heard, both the parties. We note that Ld. CIT(A) has dismissed the appeal of the assessee mainly stating that assessee has not paid advance tax which was due on their income and assessee also not filed the income tax return therefore Ld. CIT(A) has dismissed the appeal of the assessee. We note that as per the assessee, he was not required to pay the advance tax therefore of the assessee should not have been dismissed on this technical issue and the appeal should be heard on merit. The assessee would now explain before Ld. CIT(A) that why he did not pay advance tax and reasons of not filing the income tax return. Considering the above facts, we note that assessee has not given sufficient opportunity of being heard and could not plead his case successfully before the ld. CIT(A). We note that the ld. CIT(A) did not discuss the assessee’s case on merits based on the material available before him hence it is a violation of principle of natural justice. We note that it is settled law that principles of natural justice and fair play require that the affected party is granted sufficient opportunity of being heard to contest his case. Therefore, without delving much deeper into the merits of the case, in the interest of justice, We restore the matter back to the file of Ld. CIT(A) for de novo adjudication and pass a speaking order after affording sufficient opportunity of being heard to the assessee, who in turn, is also directed to contest his stand forthwith. We hold and direct accordingly. The Ld. CIT(A) will afford opportunity of being heard to the Assessee before deciding the issue. The Assessee will also be at liberty to let in further evidence to substantiate its case. Therefore, we deem it fit and proper to set aside the order of the ld. CIT(A) and remit the matter back to the file of the Ld.

In the result, the appeal of the assessee is allowed for statistical purposes.