MR HARILAL SANTHOSH,MUMBAI vs. INCOME TAX OFFICER WARD 33(1)(5), MUMBAI

Rival Submissions of both the parties have been heard and record perused. The Ld. Authorized Representative (AR) of the assessee submits that assessment was completed u/s 144 on 20.11.2019 u/s 144. The Assessing Officer while passing the assessment order made addition of Rs.11,30,949/- on account of unexplained money u/s 69A and tax the same u/s 115BBE. The Assessing Officer made such addition on account of cash deposit during demonetization period, other cash deposit during other period and other credit in bank account of assessee. No return of income was filed by the assessee as the assessee was Mr. Harilal Santhosh not having taxable income. Thus, there was no occasion for payment of self- assessment tax. The Ld. CIT(A) dismissed the appeal of assessee for the want of deposit of self-assessment tax. The appeal of the assessee was dismissed and un-admitted in a non-speaking order. The Ld. AR of the assessee submits that matter may be restored back to the file of the Ld. CIT(A) for adjudicating the appeal on merit. To support his submission, the ld AR of the assessee relied on the decision of Madhya Pradesh high Court in Shyam Electric Works Vs CIT (2005) 149 TAXMAN 588(MP).

On the other hand, the Ld. Sr. DR of the Revenue supported the order of CIT(A). On our specific query for restoring the appeal to First Appellate Authority for deciding the appeal on merit, the Ld. Sr. DR submits that he has no objection if the matter is restored back to the file of CIT(A) on merit.

We have considered the submissions of both the parties and have perused the orders of the lower authorities carefully. We find that the assessee has not filed return of income nor paid equal to the advance tax which was payable by assessee. The assessment was completed by Assessing Officer (AO) under Section 144. The ld CIT(A) dismissed the appeal in limine for non-compliance of section 249(4)(b) of the Act. We find that on similar set of facts, the Surat Bench in Sumeet Jagdish Prasad Pareek Vs ITO in dated 04/07/2024 by following decision of other Coordinate Bench, passed the following order: “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 Mr. Harilal Santhosh 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 underassessment 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 not applicable. We find that similar issue had come up for consideration before this Bench in 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 valid reason. For statistical purposes, the appeal of the assessee is treated as allowed.”