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Facts
The assessee filed an appeal against an order dismissing their appeal for non-compliance with Section 249(4) of the Income Tax Act. The assessee argued that they had paid the due tax as per their returned income, which was already deducted at source.
Held
The Tribunal held that the assessee had satisfied the conditions laid down in Section 249(4)(a) by filing the return and having the entire tax liability deducted at source. The CIT(A) erred in dismissing the appeal on this ground.
Key Issues
Whether the CIT(A) was justified in dismissing the appeal on grounds of non-compliance with Section 249(4) of the Income Tax Act, when the assessee had paid the tax due on the returned income.
Sections Cited
250, 249(4), 144, 147, 148, 151, 142(1), 144B, 148A
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Income Tax Appellate Tribunal, MUMBAI “K” (SMC
Before: SHRI SANDEEP SINGH KARHAIL, JM & SHRI GIRISH AGRAWAL, AM
(िनधा�रण वष� / Assessment Year :2017-2018) Russel Adrian Rodrigues, Vs. ITO, Ward-23(3)(1), 101, Diiago, “B” Sherly Ranjan Mumbai Road, Bandra West, Mumbai �थायी लेखा सं./PAN No. : ADWPR 7259 P (अपीलाथ� /Appellant) .. (��यथ� / Respondent) िनधा�रती की ओर से /Assessee by : Shri Subhash Chhajed, AR राज�व क� ओर से /Revenue by : Shri Kiran Unavekar, Sr.DR सुनवाई क� तारीख / Date of Hearing : 11/02/2025 घोषणा क� तारीख/Date of Pronouncement : 14/02/2025 आदेश / O R D E R
Per Sandeep Singh Karhail, JM :
The assessee has filed the present appeal against the impugned order dated 28/12/2024, passed under section 250 of the Income Tax Act (“the Act”) by the learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi [“learned CIT(A)”], for the assessment year 2017-18.
In this appeal, the assessee has raised the following grounds:
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1. On the facts and circumstances of the case and in law, Ld. CIT(A) has erred in dismissing the Assessee's Appeal on account of non-compliance of section 249(4)(a) and 249(4)(b) of the IT Act., 1961 completely disregarding the fact that Assessee has filed the Return and paid the due tax thereon as mentioned in the column 8.1 of the Appeal Form No.
35. The Appellant therefore prays to remand back the matter to Hon. CIT(A) for a fresh adjudication on merits.
Russell Adrian Rodrigues 2. On the facts and circumstances of the case and in law the Ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi erred in dismissing the grounds of appeal without disposing off each ground of appeal on merits, without stating the reasons for determination and the decisions thereon in terms of section 250(6) of the Income Tax Act., 1961. The Appellant therefore prays to remand back the matter to Hon. CIT(A) for a fresh adjudication on merits.
3. On the facts and circumstances of the case and in law, Ld. CIT(A) has erred in confirming the impugned assessment order u/s 144 r.w.s 147 of the Act completed by Ld. AO without complying with the jurisdictional and mandatory requirements and conditions envisaged in section 147/148/151 of the IT Act, 1961 and therefore the entire Reassessment proceedings u/s 147/148 of the Act are liable to be quashed as null and void And bad in law.
4. The appellant craves the leave to add, modify, amend or delete any of the grounds of appeal on or before the final hearing and all the above grounds are without prejudice to each other
3. The solitary grievance of the assessee is against the dismissal of its appeal by the learned CIT(A) by invoking the provisions of section 249(4) of the Act.
4. We have considered the submissions of both sides and perused the material available on record. The brief facts of the case are that the assessee is an individual doing service in the corporate sector as a service supervisor. For the year under consideration, the assessee filed its return of income on 10/07/2017, declaring a total income of INR 7,74,560. Subsequently, on the basis of the information received that the assessee has entered into a transaction of immovable property, wherein the transaction value is less than the stamp duty value, proceedings under section 147 of the Act were initiated and notice under section 148 Russell Adrian Rodrigues of the Act was issued on 25/06/2021. Pursuant to the directions of the Hon’ble Supreme Court in U.O.I. v/s Ashish Agarwal, in Civil Appeal No. 3005 of 2022, an order under section 148A(d) of the Act was passed after analysing the details/information available on record. Thereafter, notice under section 148 of the Act was issued on 29/07/2022. However, in response to the notice issued under section 148 of the Act, the assessee did not file his return of income and also did not respond to various statutory notices issued under section 142(1) of the Act as well as the show cause notice issued during the re-assessment proceedings. Accordingly, the Assessing Officer (“AO”) proceeded to complete the assessment on best judgment on the basis of material available on record, and vide order dated 20/05/2023 passed under section 147 read with section 144 read with section 144B of the Act assessed the total income of the assessee at INR 17,23,786, after making an addition of INR 9,49,226.
Being aggrieved, the assessee filed an appeal before the learned CIT(A). Vide impugned order, the learned CIT(A) dismissed the appeal filed by the assessee, in limine, on the basis that the assessee has failed to make the payment of the amount of advance tax which was due on its income, and thus as per the provisions of section 249(4) of the Act the appeal is not maintainable.
During the hearing, the learned Authorised Representative (“learned AR”) submitted that the assessee is a salaried employee and Russell Adrian Rodrigues the entire tax was deducted at source. In this regard, the learned AR referred to the copy of the return of income filed by the assessee on 10/07/2017 and submitted that the total tax and interest payable amounting to INR 82,309 was already deducted at source, and therefore, the entire tax liability as per the return of income was already duly discharged by the assessee. In this regard, the assessee has also placed on record Form No.
Accordingly, the learned AR submitted that the condition as laid down in the provisions of section 249(4)(a) of the Act is duly satisfied in the present case.
Before proceeding further, it is relevant to note the provisions of section 249(4) of the Act, which reads as follows: –
“(4) No appeal under this Chapter shall be admitted unless at the time of filing of the appeal,— where a return has been filed by the assessee, the assessee has paid the tax due on the income returned by him; or where no return has been filed by the assessee, the assessee has paid an amount equal to the amount of advance tax which was payable by him: Provided that, in a case falling under clause (b) and on an application made by the appellant in this behalf, the Commissioner (Appeals) may, for any good and sufficient reason to be recorded in writing, exempt him from the operation of the provisions of that clause.”
Therefore, as per the provisions of section 249(4) of the Act, an appeal before the learned CIT(A) is not admitted unless the assessee has paid the taxes due on the income returned by him or in a case where no Russell Adrian Rodrigues return has been filed by the assessee, the assessee has paid an amount equal to the amount of advance tax which was payable by him. From the perusal of the material available on record, it is evident that the assessee filed its return of income on 10/07/2017, a copy of which forms part of the paper book on page 1. From the perusal of the return of income filed by the assessee, it is further evident that the entire tax payable by the assessee amounting to INR 82,309 was deducted at source, and in respect of same the assessee has also placed on record Form No. 16, forming part of the paper book from pages 2-3. Thus, we are of the considered view that the condition as laid down in the provisions of section 249(4)(a) is duly satisfied by the assessee in the present case.
Further, as regards the conditions laid down in clause (b) of section 249(4) of the Act, the requirement of paying the advance tax can only arise in a situation where the assessee did not file his original return of income. However, we are of the view that such a condition cannot be invoked in the present case as the assessee had duly filed its original return of income and the taxes due had already been deducted from the source. Further, even if it is considered that the assessee did not file its return of income in response to the notice issued under section 148 of the Act, it is pertinent to note that the question of paying the advance tax in the re-assessment proceedings cannot arise. In this regard, reliance is placed upon the decision of the coordinate bench of the Tribunal in M/s Russell Adrian Rodrigues Nine Global Industries Private Limited v/s DCIT, in ITA No. 3889/Mum./2023, vide order dated 16/04/2024.
Before concluding, we may also note that in Form No. 35 filed by the assessee before the learned CIT(A), in Column No. 8.1, the assessee duly provided the date of filing of the return of income and the amount of taxes paid. However, we find that in Column No. 9, in response to the query whether the assessee has paid the advance tax if no return has been filed, the assessee responded as “No”, which in light of the documents placed on record and analysis of the provisions of section 249(4) of the Act appears to be merely an inadvertent error. Therefore, we are of the considered view that the learned CIT(A) laid undue emphasis on the same for dismissal of the assessee’s appeal, at the very threshold, without adjudicating the appeal on merits.
Thus, in view of the facts and circumstances of the present case, legal position and judicial pronouncements as noted above, we are of the considered view that the assessee has duly satisfied the conditions laid down in the provisions of section 294(4) of the Act and the impugned order dismissing the appeal on the ground of non-compliance of the aforesaid provisions cannot be sustained. Accordingly, the impugned order passed by the learned CIT(A) is set aside and the assessee’s appeal is restored to the file of the learned CIT(A) for adjudication on merits as per law, after providing adequate and reasonable opportunity of Russell Adrian Rodrigues hearing to the parties. With the above directions, grounds raised
by the assessee in the present appeal are allowed.
12. In the result, the appeal by the assessee is allowed. Order pronounced in the open court on 14/02/2025.