NIHAL DANGAYACH,JAIPUR vs. INCOME TAX OFFICER WARD 7(2), JAIPUR, JAIPUR

ITA 1809/JPR/2025Status: DisposedITAT Jaipur06 October 2026AY 2017-186 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the CIT(A) had wrongly invoked the proviso of Section 249(4)(b) of the Act before dismissing the appeal in limine. The Tribunal noted that it is an undisputed fact that the assessment was completed ex-parte under Section 144 and the entire addition of Rs. 26,78,000/- was disputed by the assessee. Relying on the decision of the Coordinate Pune Bench in Kishor Dattatray Mohite (supra), the Tribunal found that since the assessee disputed the entire addition and no other admitted income was determined by the AO, the question of payment of advance tax did not arise. Furthermore, as the assessment order was ex-parte, the Tribunal, in the interest of justice and in accordance with the amended Section 251(A) of the Act, deemed it fit to set aside the matter back to the file of the jurisdictional AO. The AO was directed to provide one more opportunity of hearing to the assessee and then pass a fresh order on merits. The assessee was directed to cooperate by filing all required documents. The appeal was allowed for statistical purposes.

What were the facts?

The assessee, Nihal Dangayach, failed to file his return of income for Assessment Year 2017-18. The Assessing Officer (AO) noted cash deposits of Rs. 12,50,000/- during demonetization and Rs. 14,28,000/- post-demonetization, totaling Rs. 26,78,000/-. Despite notices, the assessee did not provide explanations. Consequently, the AO passed an ex-parte assessment order under Section 144, treating the entire Rs. 26,78,000/- as unexplained money under Section 69A and taxing it under Section 115BBE. The assessee appealed to the CIT(A)-NFAC, which dismissed the appeal as not maintainable under Section 249(4)(b) of the Income Tax Act, 1961, citing non-payment of advance tax on the assessed income.

What were the issues?

1. Whether the learned CIT(A)-NFAC erred in law by summarily dismissing the assessee's appeal by mechanically invoking Section 249(4)(b) of the Act without providing adequate opportunity, thereby violating principles of natural justice, especially when the entire tax demand is disputed and the assessee contends that non-payment of tax on a disputed demand should not lead to dismissal. 2. Whether the learned CIT(A)-NFAC erred in law and facts by dismissing the appeal in limine under Section 249(4)(b) without appreciating that the condition of paying advance tax under Section 208 of the Act applies only when there is an obligation to pay, and since the entire assessed income was disputed, there was no 'admitted income' or 'undisputed taxable income' exceeding the maximum amount not chargeable to tax, thus no advance tax liability arose. 3. Whether the learned CIT(A) erred in not considering the request to remand the matter back to the Assessing Officer for a fresh decision, as provided under the proviso to Section 251(1)(a) of the Act, given that the assessment was made ex-parte under Section 144. Assessee's Contentions: The assessee argued that the appeal was dismissed on a technicality without adjudicating the merits of the addition. Since the entire assessed income was disputed, there was no admitted income, and consequently, no liability to pay advance tax arose. The assessee relied on judicial precedents such as Gopinath Sivaraman vs. ITO, Kishor Dattatray Mohite vs. ACIT, and Fakhruddin Bhura v. ITO, which held that the requirement under Section 249(4)(b) pertains only to admitted income and that dismissal without examining the legal obligation to pay advance tax or providing an opportunity is contrary to law and natural justice. The assessee requested the matter be restored to the CIT(A) for adjudication on merits. Revenue's Contentions: The Revenue's representative supported the orders passed by the lower authorities and requested confirmation of the addition.

Which sections of the Income-tax Act were involved?

Section 144,Section 69A,Section 115BBE,Section 249(4)(b),Section 208,Section 251(1)(a)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘SMC’ BENCH, JAIPUR

Before: Smt. Annapurna Gupta & Shri T. R. Senthil Kumar

For Appellant: Shri Surendra Shah, CA

PER : T. R. SENTHIL KUMAR, JUDICIAL MEMBER:- This appeal is filed by the assessee as against the appellate order dated 21.10.2025 passed by Commissioner of Income Tax (Appeal), National Faceless Appeal Centre (NFAC), Delhi, arising out of ex-parte assessment order passed u/s. 144 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) relating to A.Y. 2017-18. 2. Brief facts of the case are that the assessee did not file his return of income for the Assessment Year 2017-18. On the basis of I.T.A No. 1809/JPR/2025 Page No 2 Nihal Dangayach

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