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Facts
The assessment was completed with additions for unexplained investment and money. The assessee challenged the assessment order before the CIT(A), but the appeal was not admitted due to non-payment of advance tax as required by Section 249(4)(b) of the Act.
Held
The Tribunal condoned the delay in filing the appeal and admitted it. The Tribunal held that the assessee should be given an opportunity to present their claim for exemption under Section 249(4) of the Act before the CIT(A).
Key Issues
Whether the CIT(A) was justified in not admitting the appeal for non-compliance with Section 249(4)(b) without considering the assessee's right to claim exemption under the proviso.
Sections Cited
147, 144, 144B, 69, 69A, 249(4), 249(4)(a), 249(4)(b), 207
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Income Tax Appellate Tribunal, ‘C’ BENCH, CHENNAI
Before: HON’BLE SHRI MANOJ KUMAR AGGARWAL & HON’BLE SHRI MANU KUMAR GIRI
(िनधा�रणवष� / Assessment Year: 2017-2018) Senniappan Mani, Vs. The Income Tax Officer, No.7, Sivasakthi Nagar, Ward 2(1) 1st Street, K T C Main Road, Tirupur. Parappalayam, Tirupur 641 604. [PAN: BBNPM 7005C] (अपीलाथ�/Appellant) (��यथ�/Respondent) अपीलाथ� क� ओर से/ Appellant by : Shri. Senthil Kumar, Advocate Virtual, Erode ��यथ� क� ओर से /Respondent by : Ms. V. Aswathy, JCIT सुनवाई क� तार�ख/Date of Hearing : 25.02.2025 घोषणा क� तार�ख /Date of Pronouncement : 25.03.2025 आदेश / O R D E R PER MANU KUMAR GIRI (Judicial Member) This appeal filed by the assessee is directed against the order of the Ld. Commissioner of Income Tax (Appeals) NFAC, Delhi [CIT(A)] dated 01.02.2024 for Assessment Year 2017-18.
The registry has noted delay of 232 days in filing the appeal. Considering the period of delay and reasons stated in condonation affidavit given by the Assessee, we condone the delay and admit the appeal for adjudication.
Brief facts of the case are that the assessment was completed u/s 147 r.w.s 144 r.w.s 144B of the Act wherein AO had made addition of Rs.1,00,98,950/- u/s 69 on account of unexplained Investment and Rs.1,11,66,838/- u/s 69A on account of unexplained money. Assessee further challenged the order of assessment u/s 147 r.w.s 144 r.w.s 144B of the Act before the ld.CIT(A) who did not admit the appeal of the assessee for the reason that the assessee has not paid an amount equal to the amount of advance tax which was payable in the light of the mandatory provision of section 249(4)(b) of the Act. The Assessee is now in appeal before the tribunal with the following grounds:-
‘’1) The Impugned Order is bad, erroneous and unsustainable in law. 2) The learned First Appellate Authority erred in not considering the fact that the letter dt.22/12/2023-copy attached- did not mention about sec.249(4)(b), while the said letter did mention about sec.249(4)(a). 3) Without prejudice, the learned First Appellate Authority erred in violating the principles of natural justice, by not allowing the appellant to file application, as contemplated under the proviso to sec.249(4)(b). And, for other reasons that may be adduced later, the Appellant humbly prays that the present appeal may be admitted, duly considered and justice be rendered. Aggrieved, assessee is in further appeal before us’’.
Heard and perused the record.
Before the ld. Counsel for assessee submitted that the ld.CIT(A) has only issued deficiency letter u/s 249(4)(a) and not u/s 249(4)(b) of the Act. Hence, he prayed for an opportunity before the ld.CIT(A) to explain the deficiency, if any, raised by the ld.CIT(A). The ld. Counsel for the assessee also took shelter of section 207 of the Act.
The ld DR however, relied on the order of the ld AO to submit that AO has passed a reasoned order holding that the Assessee was liable to file income tax return for Assessment Year 2017-18 and therefore as per section 249(4)(b) the Assessee was required to pay the amount equal to amount of advance tax, which was payable by him.
We have given thoughtful consideration to the matter on record and the rival submissions. The relevant section 249(4) and section 207 are reproduced below:-
“Section 249(4) in The Income- Tax Act, 1995 (4) 1 No appeal under this Chapter shall be admitted unless at the time of filing of the appeal,- (a) where a return has been filed by the assessee, the assessee has paid the tax due on the income returned by him; or (b) 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, 2 in a case falling under clause (b) and] on an application made by the appellant in this behalf, the 3 Deputy Commissioner (Appeals)] 4 or, as the case may be, the Commissioner (Appeals)] may, for any good and sufficient reason to be recorded in writing, exempt him from the operation of the provisions of 5 that clause].” “Liability for payment of advance tax. 207. (1) Tax shall be payable in advance during any financial year, in accordance with the provisions of sections 208 to 219 (both inclusive), in respect of the total income of the assessee which would be chargeable to tax for the assessment year immediately following that financial year, such income being hereafter in this Chapter referred to as "current income". (2) The provisions of sub-section (1) shall not apply to an individual resident in India, who— (a) does not have any income chargeable under the head "Profits and gains of business or profession"; and (b) is of the age of sixty years or more at any time during the previous year.”
Perusal of the aforesaid provisions of section 207 of the Act show that it talks about payment of advance tax in regard to total income which would be chargeable to tax. However, an individual resident of 60 years or more who, any time during the previous year, was not having any income chargeable under the head “profit and gains” of business or profession, is not required to pay the advance tax. When read in context of section 249(4)(b) it has to be observed that where no return has been filed by the assessee, then in that case at time of appeal before the CIT(A), the assessee has to pay an amount equal to the amount of advance tax which was “ayable by him”. However, in this case nothing record suggest that the assessee is over 60 years of age and not having any income from profit and gains. Further, the proviso to the Section 249(4) of the Act provides that if sufficient reason are brought on record in writing the CIT(A) may exempt the Assessee from the operation of provision of clause 249(4)(b) of the Act.
The record does not show if the Assessee has claimed before the ld CIT(A) that it was entitled to any exemption by virtue of section 207. The impugned order was passed in the absence of Assessee and therefore, there was no representation of the Assessee before the ld CIT(A) and who proceeded to dismiss the appeal by invoking provision of section 249(4)(b) of the Act without giving taking into consideration the facts which assessee claims made him not liable to pay the advance tax.
In the light of the aforesaid circumstances, the Bench is of considered opinion that the Assessee should be given an opportunity to put across its claim of exemption from the application of section 249(4) of the Act before the ld CIT(A). We also rely on the Tribunal orders in in case of Late Smt Raful Ghani Vs. Asstt. CIT and in the case of Vikram Singh Vs ITO dated 21.02.2023 wherein, the both the Benches were confronted with similar situation.
The Hyderabad Bench held in para 7 as under:-
“7. Having regard to the rival contentions and the material on record, we find that the provisions of section 249 (4) (b) are applicable to the case on hand since the assessee has not filed the return of income, nor has paid the advance tax payable by her. Therefore, she ought to have filed an application under the proviso to section 249 (4) (b) of the Act for exemption from the application of section 249(4)(b) of the Act. In such circumstances, The CIT (A) had no choice but to dismiss the appeal as it was defective. However, purely in the interest of justice and taking the prayer of the assessee into consideration, we set aside the issue to the file of the CIT (A) with a direction to the assessee to file the application under the proviso to section 249(4)(b) of the Act within a period of one month from the date of receipt of this order and thereafter, the CIT (A) shall dispose of such application of the assessee and decide on the issue of exemption from the application of the provisions of section 249(4)(b) and thereafter, the CIT (A) shall also decide the appeal on merits. Needless to mention that the assessee shall be given a fair opportunity of hearing.”
In the light of the aforesaid orders of the Tribunal, the impugned order is set aside and the issue is restored to the file of the ld CIT(A) to decide the question of applicability of section 249(4) of the Act on merits of claim of the assessee, after giving an opportunity of hearing to the Assessee.
In the result, the appeal is allowed for statistical purposes. Order pronounced in the open court on 25th day of March, 2025 at Chennai.